AeroVironment Rebounds 6.5% as Space Force Contract Talks Continue
March 3, 2026 11:04 AM
IH Market News
AeroVironment (NASDAQ:AVAV) shares jumped 6.5% on Tuesday after the defense contractor said it remains in ongoing discussions with the U.S. Space Force over a potential amendment to its SCAR program contract.
The company confirmed it is negotiating a firm-fixed-price agreement tied to the Satellite Communications Augmentation Resource (SCAR) program, which involves delivering ground stations. AeroVironment said the contract was temporarily paused as both sides work to align on a more commercialized product configuration and a faster delivery schedule.
The drone and defense technology maker also noted it is expanding manufacturing capacity in Albuquerque, New Mexico, to support anticipated growth across its Space and Directed Energy platforms, including production related to the SCAR program.
Tuesday’s rebound follows a sharp 17% drop in the stock the previous session after Raymond James analyst Brian Gesuale downgraded AeroVironment from Strong Buy to Underperform. Gesuale cited uncertainty surrounding the SCAR program, which had been valued at roughly $1.4 billion and represented the company’s largest program of record. According to the analyst, potential changes to the program could remove between $1 billion and $1.4 billion from AeroVironment’s $2.8 billion backlog.
In contrast, Jefferies analyst Greg Konrad maintained a Buy rating, arguing that the recent sell-off may have been excessive. The Space Force has indicated it plans to reopen the $1.7 billion SCAR program to invite additional vendors and strengthen supply chain resiliency for potential surge production.
AeroVironment is set to report its fiscal third-quarter 2026 results after the market closes on March 10, 2026, with investors likely to seek further clarity on the status of the SCAR contract and backlog outlook.
AeroVironment stock price
Original: AeroVironment Rebounds 6.5% as Space Force Contract Talks Continue
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