AeroVironment Is Down 70% From Its High While Drone Budgets Explode. Here's What Went Wrong -- and Whether It's Fixable.
AeroVironment lost a massive federal contract earlier this year, and the stock plunged. Is the beaten-down stock worth buying?
In 2025, AeroVironment acquired BlueHalo for $4.1 billion, bolstering its portfolio across air, land, sea, and space, as well as high-growth segments like counter-unmanned aerial systems and electronic warfare. The $1.4 billion SCAR contract awarded to BlueHalo in 2022 grew to $1.7 billion, providing AeroVironment with a space-based revenue stream.
However, the U.S. Space Force issued a stop-work order on the contract in January, followed by an open competition that AeroVironment lost. This forced the company to write down its goodwill by $151 million and another $89 million in June. Despite this, AeroVironment remains profitable, with strong demand for its Switchblade loitering munitions, Puma unmanned systems, and BlueHalo's Titan counter-drone hardware.
Management has reaffirmed a $3.5 billion to $4 billion revenue target by 2030, predicting annualized growth of 15% to 20%. Despite the recent setbacks, the company's stock is now more attractively priced.
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