AeroVironment bounces jumps 6.5% on Space Force contract talks

Investing.com -- AeroVironment (NASDAQ: AVAV) shares rose 6.5% Tuesday after the company said it remains in active negotiations with the U.S. Space Force regarding a contract amendment for the SCAR program.

The defense technology company said it is working with the Space Force on a firm-fixed-price contract to deliver ground stations for the Satellite Communications Augmentation Resource program. AeroVironment said the contract was temporarily paused while both parties align on a commercialized product solution with an expedited delivery timeline.

The company said it is investing in expanded manufacturing capacity in Albuquerque, New Mexico to support growth in its Space and Directed Energy platforms, including manufacturing for the SCAR program.

Tuesday’s gain follows a 17% decline in shares yesterday after Raymond James analyst Brian Gesuale downgraded the stock from Strong Buy to Underperform. Gesuale noted that Space Force announced it is recompeting the SCAR program, which was the company’s largest program of record at approximately $1.4 billion of value. The analyst said the program may erase $1 billion to $1.4 billion from AeroVironment’s $2.8 billion total backlog.

Jefferies analyst Greg Konrad maintained a Buy rating, suggesting the sell-off was overdone. The Space Force disclosed it is looking to reopen the $1.7 billion SCAR program to introduce new vendors and supply chain resiliency for surge production needs.

AeroVironment is scheduled to report its third quarter fiscal 2026 financial results after the market closes on March 10, 2026.

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