AeroVironment Rises 5% on First International LOCUST Laser Order, Unusual Machines Holds Steady, Ondas Slips

AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) stock is up 5% to $147.90 in early Thursday trading after the company reported fiscal Q1 2027 results and announced its first international commercial order for the LOCUST laser weapon system. It’s a company-specific move against a softer backdrop for the rest of the defense-drone complex.

Unusual Machines (NYSEAMERICAN:UMAC) stock is holding steady, up 0.1% to $24.34. Meanwhile, Ondas (NASDAQ:ONDS) stock is slipping, down 1% to $7.21, as the drone group doesn’t catch a broader bid on AeroVironment’s news.

The thematic Defiance Drone and Modern Warfare ETF (NYSEARCA:JEDI) is down 1%, so the sector barometer confirms the drift. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is off 0.46%, which frames AeroVironment’s rally as a company-specific repricing rather than a broad risk-on move.

First International LOCUST Order Fuels the Rally

AeroVironment announced a $50 million first international commercial order for the LOCUST directed-energy counter-UAS laser weapon system, covering an initial delivery of systems and associated support. That deal comes on the heels of AeroVironment’s selection for the U.S. Army’s $464.8 million Enduring High Energy Laser (E-HEL) production contract, which the company describes as the first production award for high-energy laser weapon systems in U.S. history.

The Autonomous Systems segment drove the beat with revenue of $346 million, up 21% year over year (YoY), powered by P550, Jump 20X, and Puma. Q1 bookings of $700 million produced a 1.4x book-to-bill ratio, giving AeroVironment visibility into a second half that management expects to carry the majority of full-year adjusted EBITDA.

AeroVironment reported fiscal Q1 2027 adjusted EPS of $0.59, beating the $0.2479 consensus, on revenue of $480.49 million that grew 5.7% YoY. Funded backlog reached a record $1.5 billion, and management reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion, according to AeroVironment.

AeroVironment CEO Wahid Nawabi stated, “LOCUST gives our customers an affordable, scalable way to defeat drone threats at scale without relying solely on expensive interceptors.” AeroVironment says LOCUST engagements cost less than $10 per shot, a cost profile that differentiates directed energy from interceptor-based counter-UAS systems and removes the reload limits inherent to kinetic defense.

AeroVironment Stands Apart on Directed Energy

Drone-sector peers Red Cat (NASDAQ:RCAT) and Kratos Defense & Security Solutions (NASDAQ:KTOS) sit in the same Department of War Drone Dominance and counter-UAS themes, yet AeroVironment carries a funded, contracted directed-energy franchise that sets it apart from listed rivals today. That’s why one international order reprices AeroVironment while Ondas and Red Cat trade heavy.

Kratos Defense & Security Solutions delivered its own strong quarter in early August, with Q2 2026 revenue of $458.8 million up 30.5% YoY, and raised full-year guidance to $1.75 billion to $1.81 billion. Red Cat reaffirmed its fiscal 2026 revenue target of $150 million to $180 million despite missing consensus on the top line. The theme is intact across the group, yet AeroVironment’s directed-energy production award gives it a category no listed peer currently owns.

The year-to-date picture provides the counterweight. AeroVironment stock is down 39% year to date (YTD), so today’s rally, while meaningful, leaves the broader drawdown largely intact. Kratos Defense & Security Solutions has faced similar pressure this year, and Unusual Machines has climbed sharply on the same policy tailwinds around NDAA-compliant domestic supply chains.

The macro backdrop remains supportive. The FY 2027 Department of War budget request allocates $53.6 billion to autonomous systems and an additional $20.6 billion across counter-drone and one-way attack programs, feeding directly into the pipelines at AeroVironment, Ondas, Red Cat, and Kratos Defense & Security Solutions. That funding envelope explains the sector’s structural bid even on lower-momentum days.

What to Watch

The pivotal question is timing: how quickly AeroVironment’s funded backlog converts to revenue as Congress works through the fiscal 2027 defense budget. Investors can watch for signs that LOCUST production ramps at the Albuquerque facility and that additional international orders follow the initial commercial sale.

Given the size of today’s move against the YTD drawdown, investors may want to size their exposure to the directed-energy theme carefully rather than chase the initial pop. AeroVironment’s conference call commentary and any follow-on LOCUST announcements over the coming quarters could shape the next leg of the story. Management framed LOCUST as a potential half-a-billion-dollar-plus annual franchise over time, which sets a clear yardstick for how the setup evolves.

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