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Diamond or Dud?

The weekly showdown where investors decide if controversial stocks are hidden gems or complete trash

⚡ A few minutes a week to sharpen your market knowledge.

Diamond or Dud is for entertainment purposes only. AssetRoom does not provide financial advice. Figures collected prior to poll publication.

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Why we're voting on AVAV this week

Last week, the US Army handed AeroVironment the first production contract for laser weapons in American history - $465 million to build counter-drone systems that shoot down enemy drones for roughly $5 a shot. A week later, the company posted record revenue of $480.5 million and more than doubled its EPS estimate.

This is a stock that lost two-thirds of its value in nine months. The Space Force canceled a $1.7 billion satellite contract in March, AeroVironment took a $151 million write-down, and a securities fraud lawsuit landed. The stock cratered from $418 to $135.

Now the backlog sits at a record $1.5 billion, up 37% in a year. A single Switchblade 600 costs roughly $100,000 - and can destroy a $2 million tank. Ukraine put that math on the map. Now every military on earth is rethinking what it buys.

Best quarter AeroVironment has ever posted, and the stock is still 64% off its high.

AVAV

AeroVironment, Inc.

View on Google Finance

Poll Ran

Sep 11 – Sep 18, 2026

Market Cap

~$7.5B

Q1 Revenue

$480M

Forward P/E

~50x

Funded Backlog

$1.5B (+37%)

What's your verdict on AVAV?

Here's how the community voted

100%

💎 Diamond 💩 Dud

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Diamond Case

AeroVironment just posted record Q1 revenue of $480.5 million. Adjusted EPS of $0.59 more than doubled the $0.25 consensus. Autonomous systems revenue climbed 21% to $346 million. Bookings hit $683 million - they’re signing new contracts faster than they can fill existing ones. They kept full-year EPS guidance at $3.02 to $3.34.
The $465 million LOCUST X3 contract is the first laser weapons production deal in US history. Iran’s drone swarms are overwhelming air defenses across the Gulf - and AeroVironment’s laser can shoot them down with a nearly unlimited magazine at roughly $5 per shot. The Army is scaling this from prototype to frontline deployment.
Funded backlog hit a record $1.5 billion, up 37% in a year. A $186 million Switchblade order dropped days before Operation Epic Fury launched. At roughly $100,000 per munition, a Switchblade 600 can take out a tank worth 20 times its price. Allied nations are lining up too.

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Dud Case

The Space Force canceled AeroVironment’s $1.7 billion SCAR contract in March after disagreements over the program’s financial framework. The company took a $151 million goodwill impairment and is now facing a securities fraud class action alleging it overstated business prospects while the deal was unraveling.
At ~50x forward earnings, AVAV trades at a steep premium to the aerospace and defense median of ~29x. Integration costs from the BlueHalo acquisition dragged results through most of FY2026, and one monster beat doesn’t guarantee the trend has turned.
The majority of AeroVironment’s revenue comes from the US government. A ceasefire, a budget shift, or a change in drone procurement priorities could hit the top line hard. The SCAR lawsuit also names the CEO and CFO as defendants for allegedly misleading investors, and that’s baggage most defense stocks don’t have.

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Diamond Case

AeroVironment just posted record Q1 revenue of $480.5 million. Adjusted EPS of $0.59 more than doubled the $0.25 consensus. Autonomous systems revenue climbed 21% to $346 million. Bookings hit $683 million - they’re signing new contracts faster than they can fill existing ones. They kept full-year EPS guidance at $3.02 to $3.34.
The $465 million LOCUST X3 contract is the first laser weapons production deal in US history. Iran’s drone swarms are overwhelming air defenses across the Gulf - and AeroVironment’s laser can shoot them down with a nearly unlimited magazine at roughly $5 per shot. The Army is scaling this from prototype to frontline deployment.
Funded backlog hit a record $1.5 billion, up 37% in a year. A $186 million Switchblade order dropped days before Operation Epic Fury launched. At roughly $100,000 per munition, a Switchblade 600 can take out a tank worth 20 times its price. Allied nations are lining up too.

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Dud Case

The Space Force canceled AeroVironment’s $1.7 billion SCAR contract in March after disagreements over the program’s financial framework. The company took a $151 million goodwill impairment and is now facing a securities fraud class action alleging it overstated business prospects while the deal was unraveling.
At ~50x forward earnings, AVAV trades at a steep premium to the aerospace and defense median of ~29x. Integration costs from the BlueHalo acquisition dragged results through most of FY2026, and one monster beat doesn’t guarantee the trend has turned.
The majority of AeroVironment’s revenue comes from the US government. A ceasefire, a budget shift, or a change in drone procurement priorities could hit the top line hard. The SCAR lawsuit also names the CEO and CFO as defendants for allegedly misleading investors, and that’s baggage most defense stocks don’t have.

Read our AI summaries of AVAV's quarterly and annual reports

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Diamond or Dud?

The weekly showdown where investors decide if controversial stocks are hidden gems or complete trash

⚡ A few minutes a week to sharpen your market knowledge.

What's your verdict on AVAV?

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