AeroVironment Gains 6.5% on $1.7B SCAR Contract Talks, Expands Manufacturing
AeroVironment shares jumped 6.5% after confirming active negotiations on a firm-fixed-price amendment for the U.S. Space Force’s $1.7 billion SCAR contract, paused while both parties align on an expedited delivery solution. The company is investing in Albuquerque manufacturing capacity to support Space and Directed Energy platforms, including SCAR ground station production.
1. Active SCAR Contract Negotiations
AeroVironment remains in active negotiations with the U.S. Space Force to amend the SCAR program contract under a firm-fixed-price structure. The program, valued at $1.7 billion, was paused while both parties refine a commercialized product solution and establish an expedited delivery timeline for ground stations.
2. Albuquerque Manufacturing Expansion
The company is investing in expanded manufacturing capacity at its Albuquerque, New Mexico facility to support anticipated growth in its Space and Directed Energy platforms. This expansion will include dedicated production lines for SCAR ground stations to meet potential surge requirements.
3. Analyst Downgrades and Backlog Implications
A 17% share decline followed an analyst downgrade to Underperform, citing the Space Force's decision to reopen the $1.7 billion SCAR program and potential erosion of $1.0–1.4 billion from the company’s $2.8 billion backlog. A separate firm maintained a Buy rating, suggesting the stock sell-off was overdone.
4. Upcoming Fiscal Q3 Financial Report
AeroVironment is scheduled to report its third quarter fiscal 2026 results on March 10, 2026, which will provide further insight into the company’s revenue trajectory and the financial impact of the SCAR program negotiations.