So, AeroVironment (AVAV 5.21%). Dropped 4.6% today. Honestly? Not entirely surprising. It’s like watching someone realise they’ve overpaid for a really good handbag. The initial thrill fades, and then…the cold, hard numbers set in. Yesterday, though? Yesterday was a different story. A $186 million order from the U.S. Army. Switchblade 600 and 300 drones. Very shiny. Very lethal. Investors briefly lost their minds, pushing the stock up 1.7%. Predictable, really. But now? They’re taking the money back. And then some. It’s currently trading lower than it was before the good news. Which, let’s be honest, is always a bit awkward.
The Army Wants Drones, But…
Here’s the thing. That $186 million? It wasn’t exactly a windfall. More of a…reallocation of funds. A pre-approved slice of a larger, $990 million Pentagon deal from earlier this year. Think of it as the Army finally deciding which flavour of drone they wanted. They always had the money set aside. It’s not like someone suddenly found a spare $186 million under the sofa cushions. AeroVironment’s Brian Young, VP of Loitering Munitions (a fantastic job title, by the way), called it a “confirmation of confidence.” Which, translated from corporate-speak, means “we’re still in the running.” It doesn’t actually add anything to the future bottom line. It’s…sustaining, shall we say?
Should You Sell AeroVironment?
That’s the question, isn’t it? And I’ll be brutally honest: I suspect investors are having a little moment of clarity. A valuation check, if you will. At $248 a share, with a market cap of $18 billion, this stock is…ambitious. A price-to-earnings ratio of 150? Seriously? It’s expensive, even for a defense stock. And I’ve said before, defense stocks are rarely shy about their pricing. It’s all about national security, darling. Can’t put a price on that…except apparently, AeroVironment can. And it’s a high one. So, are they selling off AV stock? It’s not about the drones themselves, not really. It’s about the price. It just…costs too much. And when something costs too much, you start to wonder if you actually need it. Don’t you?
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2026-02-27 20:22