AeroVironment Stock Surges On Unprecedented Defense Demand

AeroVironment Inc (AVAV) is riding a wave of unprecedented defense demand. The company reported better-than-expected fiscal fourth-quarter 2026 earnings, driven by a massive $1.2 billion funded backlog and surging military interest in autonomous drones and laser weapons. CEO Wahid Nawabi projected strong contract wins over the next two years, signaling robust growth for the American defense contractor as global security threats push military budgets higher.

What drove AeroVironment's Q4 2026 earnings beat?

AeroVironment crushed analyst expectations in the fourth quarter of fiscal 2026. The defense contractor earned $1.84 per share, easily beating the $1.47 estimate. Revenue skyrocketed 133 percent year-over-year to $641.6 million, blowing past the Street's view of $559.1 million.

Investors clearly focused on the company's massive backlog rather than softer forward guidance. AVAV stock traded over 19 percent higher overnight. The company secured $572 million in new contracts during the quarter. Over the past 12 months, AeroVironment posted a strong book-to-bill ratio of 1.4. The quarter's ratio sat at 0.9, mainly because robust revenue was partly offset by delays in large contract awards. The firm ended the quarter with a $1.2 billion funded backlog and $1.5 billion in unfunded backlog, excluding a canceled SCAR contract from March.

How are autonomous systems fueling military readiness?

Autonomous Systems remained the backbone of AeroVironment, accounting for 76 percent of Q4 revenue. The company continues to expand its manufacturing capacity and invest in new technologies to meet the needs of the American warfighter.

During the earnings call, Nawabi emphasized the company's strong positioning.