---
title: "AeroVironment keeps the $464.8 million Army laser while the Army opens its parts to rival bidders"
description: "Six weeks after the US Army handed AeroVironment the first production contract for a laser weapon in American military history, it is opening that weapon's internals to rival bidders. AeroVironment's shares touched a 52-week low of $131.50 this week, even after a quarter that beat estimates."
publisher: "The Inference"
section: "Deals"
published: 2026-10-13T13:15:40.372Z
modified: 2026-10-13T13:15:40.372Z
canonical: https://theinference.org/article/aerovironment-keeps-the-464-8-million-army-laser-while-the-army-opens-its-parts-to-rival-bidders
language: en
keywords: "AeroVironment, Directed Energy, Defense, US Army, Stocks"
---

# AeroVironment keeps the $464.8 million Army laser while the Army opens its parts to rival bidders

> Six weeks after the US Army handed AeroVironment the first production contract for a laser weapon in American military history, it is opening that weapon's internals to rival bidders. AeroVironment's shares touched a 52-week low of $131.50 this week, even after a quarter that beat estimates.

The US Army is reopening the supply chain inside its new counter-drone laser to competition. At the Association of the United States Army's annual meeting on October 12, Army and company officials said components and subsystems of the Enduring-High Energy Laser (E-HEL) program will be re-bid, with [a supplier industry day at the end of October](https://aviationweek.com/defense/missile-defense-weapons/new-suppliers-will-be-sought-us-army-laser-weapon) [1]. The trade is plain: [AeroVironment](https://theinference.org/markets/companies/aerovironment) (NASDAQ: AVAV), the defense-technology company that [won the prime contract on September 2](https://theinference.org/article/aerovironment-is-down-43-despite-a-record-1-5-billion-backlog-and-a-464-8-million-army-laser-win), keeps the production ramp, and the Army gets rival bidders for the parts [2].

## The Army's first laser production contract went to a 30-kilowatt design

The September award is a $464.8 million agreement and [the first production contract for a directed-energy weapon in US military history](https://www.defensenews.com/industry/techwatch/2026/09/03/us-army-launches-laser-production-with-465m-contract-award/) [2][3]. The winning design, LOCUST X3, is a 30-kilowatt laser that mounts on trucks or pallets and reloads from its own power supply instead of expending missiles [2][3]. It is aimed by AV_Halo, the company's AI-driven targeting software [3].

![AeroVironment's LOCUST laser turret on a mount beside its control panels](https://storage.googleapis.com/theinference-public/img/c6974170e41df7c6.jpg)

*The LOCUST laser in AeroVironment product imagery. The Army's production award covers the 30-kilowatt LOCUST X3, which mounts on trucks or pallets and reloads from its own power supply. (Courtesy of AeroVironment)*

## Eleven interface documents turn the internals into an open standard

The new part this month is the mechanism. John Garrity, [AeroVironment](https://www.nasdaq.com/press-release/aerovironment-announces-fiscal-2027-first-quarter-results-2026-09-09)'s vice-president of directed energy systems, says the company is writing 11 interface control documents and handing them to the Army [1][3]. Those documents are the specs for how each subsystem connects; once they are Army property they become a reference architecture, a standard any qualified supplier can build compatible hardware against [1]. Standardize the seams, and the parts behind them become replaceable.

Rivals read the invitation immediately. KBR, which offered a competing 20-kilowatt system for the same program, is already describing the chance to on-ramp its own components into the platform [1]. The Pentagon is widening the vendor base on every track: on October 5 it named AeroVironment, the rival counter-drone makers [Epirus](https://theinference.org/markets/companies/epirus) and Kord, and Boeing to [a homeland directed-energy pilot](https://breakingdefense.com/2026/10/pentagon-picks-4-vendors-for-counter-drone-directed-energy-pilot-program/) [4].

## The market has already priced the margin question

AVAV [touched a 52-week low of $131.50 this week](https://www.marketbeat.com/instant-alerts/price-aerovironment-nasdaq-avav-sets-new-52-week-low-should-you-sell-2026-10-13/) [5][6]. The shares have fallen from a $411.16 high over the past year [6]. A September 9 quarter that beat estimates, with [adjusted earnings of $0.59 against a $0.22 consensus](https://www.nasdaq.com/press-release/aerovironment-announces-fiscal-2027-first-quarter-results-2026-09-09), did not slow the fall [5][7]. Revenue was a first-quarter record of $480.5 million [7]. The street still carries a consensus target of $228.80 [5].

The discomfort has a basis. The segment that houses the laser, Space, Cyber and Directed Energy, posted negative adjusted EBITDA in that quarter while the autonomous-systems arm earned the profit [7]. Gross margin tells the same story: compressed since AeroVironment [bought BlueHalo in May 2025](https://en.wikipedia.org/wiki/AeroVironment), an all-stock purchase of the defense business that brought the LOCUST laser line and roughly doubled revenue [8][9]. It is still dragged by purchase-accounting amortization [7].

*Chart: **Revenue more than doubled after the BlueHalo purchase in May 2025** Line chart of AeroVironment quarterly revenue by calendar quarter from the third quarter of 2023 to the second quarter of 2026, rising from about $181 million to a peak of $642 million, with a step change beginning in mid-2025.*

*Quarterly revenue, US$ millions, by calendar quarter. AeroVironment closed its all-stock purchase of BlueHalo in May 2025; the second calendar quarter of 2025 was the first full quarter with BlueHalo included. Source: AeroVironment quarterly figures from its SEC filings. [10]*

*Chart: **Gross margin has yet to recover from the scale-up** AeroVironment quarterly gross margin from the third quarter of 2023 to the second quarter of 2026, running around 36 to 43 percent before mid-2025 and 21 to 32 percent after.*

*GAAP gross margin, percent of revenue, by calendar quarter; purchase-accounting amortization weighs on reported figures. Source: AeroVironment SEC filings. [9]*

## Who shows up at the October supplier day is the tell

The industry day at the end of October will show how real the competition is. Whoever owns the interfaces allocates the margin, and the Army now owns the interfaces. AeroVironment's durable claim is the prime seat, the integration and the software that aims the beam; the parts behind the seams go to bid. The laser gets fielded either way, and faster with more suppliers. What the stock is deciding is how much of that ramp AeroVironment keeps.

## Takeaway

The Army keeps AeroVironment as laser prime but takes ownership of the interface documents, so rivals such as KBR can bid the parts; a stock at a 52-week low is pricing how much of the ramp the company keeps.

## Sources

1. [Aviation Week Network, "New Suppliers Will Be Sought For U.S. Army Laser Weapon," 12 October 2026](https://aviationweek.com/defense/missile-defense-weapons/new-suppliers-will-be-sought-us-army-laser-weapon)
2. [Defense News, "US Army launches laser production with $465M contract award," 3 September 2026](https://www.defensenews.com/industry/techwatch/2026/09/03/us-army-launches-laser-production-with-465m-contract-award/)
3. [AeroVironment press release via Business Wire/Morningstar, "AV's LOCUST Selected for Nearly $500 million Army Counter-UAS Contract for Enduring-High Energy Laser (E-HEL) Program," 2 September 2026](https://www.morningstar.com/news/business-wire/20260818921666/avs-locust-selected-for-nearly-500-million-army-counter-uas-contract-for-enduring-high-energy-laser-e-hel-program)
4. [Breaking Defense, "Pentagon picks 4 vendors for counter-drone directed energy pilot program," 5 October 2026](https://breakingdefense.com/2026/10/pentagon-picks-4-vendors-for-counter-drone-directed-energy-pilot-program/)
5. [MarketBeat, "AeroVironment (NASDAQ:AVAV) Sets New 52-Week Low - Should You Sell?" 13 October 2026](https://www.marketbeat.com/instant-alerts/price-aerovironment-nasdaq-avav-sets-new-52-week-low-should-you-sell-2026-10-13/)
6. [GuruFocus, "A Look at AeroVironment Inc (AVAV) After 4.1% Decline -- GF Value $256.88 vs Price $131.51," 12 October 2026](https://www.gurufocus.com/news/9120056/a-look-at-aerovironment-inc-avav-after-41-decline-gf-value-25688-vs-price-13151)
7. [AeroVironment, "AeroVironment Announces Fiscal 2027 First Quarter Results," Business Wire via Nasdaq, 9 September 2026](https://www.nasdaq.com/press-release/aerovironment-announces-fiscal-2027-first-quarter-results-2026-09-09)
8. [Wikipedia, "AeroVironment," retrieved 13 October 2026](https://en.wikipedia.org/wiki/AeroVironment)
9. [AeroVironment quarterly figures from its SEC filings, retrieved 13 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001368622)
10. [AeroVironment, quarterly figures from its SEC filings, retrieved 13 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001368622)


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AeroVironment keeps the $464.8 million Army laser while the Army opens its parts to rival bidders — The Inference. Canonical: https://theinference.org/article/aerovironment-keeps-the-464-8-million-army-laser-while-the-army-opens-its-parts-to-rival-bidders