• The company said it would accelerate production of the next-generation Freedom Eagle-1 interceptor missiles using government funds.
• The investment builds on the recent $95.9 million contract award from the U.S. Army 
• The investment also reflects the company’s broader strategy to scale domestic manufacturing capacity.

Shares of AeroVironment, Inc. (AVAV) gained on Tuesday after the company received an additional multi-million-dollar investment from the U.S. government to ramp up production of interceptor missiles amid rising demand in the defense sector, fueled by the global geopolitical crisis.

At the time of writing, AVAV stock was up nearly 6%.

The Government Investment

The company said the government is investing $20.2 million in its Huntsville, Alabama, facility to produce Freedom Eagle-1 missiles, which can neutralize unmanned aerial systems.

The facility expansion will help scale up the interceptor missile production and deliver them more quickly to meet urgent U.S. Army and Combatant Command operational needs, the company said.

“This expansion is a critical step in scaling production of Freedom Eagle-1 and accelerating its delivery to the field,” said Jimmy Jenkins, Executive Vice President of AV’s Precision Strike and Defense Systems Group. “By increasing manufacturing capacity, strengthening integration, and enabling production at volume, we’re delivering a cost-effective interceptor designed to counter increasingly complex and high-volume aerial threats.”

The investment builds on the recent $95.9 million contract award from the U.S. Army and reflects the company’s broader strategy to scale domestic manufacturing capacity, following a $30 million campus expansion in Albuquerque, New Mexico.

The investment also comes in the backdrop of the ongoing U.S.-Israel-led war against Iran, with the U.S. continuing to pour resources into bolstering its attack capabilities against cheaply produced Iranian drones.

What Retail Thinks About AVAV

On Stocktwits, retail sentiment about the AVAV stock remained ‘neutral’ over the last 24 hours. One user on the platform wrote, “they got money from the government...means they are placing BIG BIG orders.”

Another user thinks the continuation of the war is helping drone stocks.

AVAV stock has lost nearly 24% in value so far this year, but has gained nearly 4% over the last 12 months.

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