---
title: "The Army's first production laser pays AeroVironment $464.8 million and keeps the profit contestable"
description: "The Army's $464.8 million award, signed September 2, makes AeroVironment's LOCUST X3 the first high-energy laser contracted for production in United States history. The same terms open 12 subsystem interfaces to rival suppliers and schedule a 2031 variant decision, while the average analyst target sits 77 percent above a $121.79 close."
publisher: "The Inference"
section: "Hardware"
published: 2026-10-17T16:12:38.185Z
modified: 2026-10-17T16:12:38.185Z
canonical: https://theinference.org/article/the-army-s-first-production-laser-pays-aerovironment-464-8-million-and-keeps-the-profit-contestable
language: en
keywords: "AeroVironment, Defense, Directed Energy, Army, Defense Stocks"
---

# The Army's first production laser pays AeroVironment $464.8 million and keeps the profit contestable

> The Army's $464.8 million award, signed September 2, makes AeroVironment's LOCUST X3 the first high-energy laser contracted for production in United States history. The same terms open 12 subsystem interfaces to rival suppliers and schedule a 2031 variant decision, while the average analyst target sits 77 percent above a $121.79 close.

The United States Army finally bought a laser, and it wrote the winner's monopoly out of the purchase. On September 2, 2026, the service [signed a $464.8 million agreement](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) with [AeroVironment](https://theinference.org/markets/companies/aerovironment) (NASDAQ: AVAV) for the Enduring High Energy Laser program, E-HEL, whose 30-kilowatt LOCUST X3 becomes the first high-energy laser weapon system contracted for production in United States history [1][2].

At this week's Association of the U.S. Army meeting in Washington, the service [put the terms on the record](https://aviationweek.com/defense/missile-defense-weapons/us-army-defines-goals-e-hel-upgrade-plan): [open interfaces across 12 subsystem categories](https://theinference.org/article/aerovironment-keeps-the-464-8-million-army-laser-while-the-army-opens-its-parts-to-rival-bidders), meant to admit what the Army's own solicitation called "third-party suppliers beyond AeroVironment as the system integrator" [3]. The openness is deliberate, and it decides who keeps the profit as the program matures.

## The order was earned in the field, not the laboratory

Directed energy spent 50 years dying between the laboratory and the motor pool [2]. The previous 50-kilowatt attempt, bolted to a [Stryker](https://theinference.org/markets/companies/stryker) vehicle, ended its days in Fort Sill's museum after a 2024 Middle East deployment left soldiers unconvinced [2].

LOCUST X3 answered the real failure, maintenance: less power, and a sled that moves between any truck in the motor pool, so the weapon no longer goes down when its host vehicle needs an oil change [2][4]. The proof came at the Rio Grande, where a soldier engaged cartel drones on August 25 and eleven were down within two weeks, each shot a few dollars of electricity [5]. First delivery is due in late fiscal 2027, with [soldiers fielding the system by early 2028](https://www.defensenews.com/industry/techwatch/2026/10/13/us-army-targets-2028-for-first-high-energy-laser-counter-drone-weapons/) [4]. The builder that closed the gap got the order, as it should.

## The openness that fixes the weapon caps the reward

The categories the Army will fund as contestable prototype subsystems include the laser source, the beam director, power generation and software [3]. Software matters most here: the AI-assisted aim-point layer is what holds the beam on target and sets the cycle rate against drone swarms, and it is now an open interface [3][2]. A decision due around fiscal 2031 on a new variant sized for the Infantry Squad Vehicle is the scheduled moment to re-shop the work [3].

![A US Army M1301 Infantry Squad Vehicle fitted with a LOCUST laser weapon system, parked outside a hangar at Fort Sill.](https://storage.googleapis.com/theinference-public/img/844df1b3809782c8.jpg)

*A LOCUST laser weapon system aboard the M1301 Infantry Squad Vehicle at Fort Sill in April 2025. The E-HEL plan schedules a decision around fiscal 2031 on a variant sized for the ISV. (US Army photo by Venetia Gonzales)*

## The component tier already has its winner

The tier above is already held by a component maker: [nLIGHT](https://theinference.org/markets/companies/nlight) (NASDAQ: LASR) [won a Joint Laser Weapon System agreement in July](https://www.nasdaq.com/press-release/nlight-awarded-627-million-joint-laser-weapon-system-jlws-contract-2026-07-09) that started at $44 million [6]. Its ceiling is $627 million, and [Lockheed Martin](https://theinference.org/markets/companies/lockheed-martin)'s Aculight holds the companion award [2][6]. AeroVironment's uncontestable ground is export, where [a first international LOCUST order above $50 million](https://www.businesswire.com/news/home/20260908106462/en/AV-Secures-First-International-Order-for-LOCUST-Directed-Energy-CounterDrone-Systems) landed in September [7]. In plain terms, the open interfaces keep the weapon maintainable in the field, and the same openness means any subsystem AeroVironment integrates today can be bid away later.

## Price targets sit far above a price that keeps falling

Macquarie opened coverage of AeroVironment at Outperform on October 16, the day the shares closed at $121.79 [8]. The average price target among 23 analysts sits 77 percent above that price, even as [Barclays](https://theinference.org/markets/companies/barclays) started at Equalweight, its term for hold, on October 9, Rothschild went Neutral on October 6, and [BofA](https://theinference.org/markets/companies/bank-of-america) cut its own target earlier in the month [8]. The company's answer that week was [four memorandums of understanding on October 13 and 14, none of them an order](https://theinference.org/article/aerovironment-announced-five-deals-in-six-days-none-an-order-against-a-216-average-analyst-target) [8].

*Chart: **Every analyst price target sits far above AeroVironment's closing price** Bar chart of AeroVironment analyst price targets and the October 16 closing price in dollars*

*Published price targets and the October 16, 2026, close, in dollars. Source: MT Newswires via MarketScreener. [8]*

The revenue those price targets must carry more than doubled year over year for four straight quarters, and the latest quarter grew 5.7 percent [9]. The whole five-year award is worth less than a single quarter of the company's revenue [1][9].

*Chart: **Revenue more than doubled year over year for four quarters, then grew 5.7 percent** Line chart of AeroVironment quarterly revenue over twelve quarters in millions of dollars*

*Quarterly revenue in $ millions from AeroVironment's SEC filings; labels are calendar quarters. [9]*

## The capability is proven, the profit pool is rented

The Army's design is right for soldiers and taxpayers: a weapon that improves through competition instead of failing as a closed system, which is what happened last time [2]. AeroVironment earned the order in the field and built the plant to make the laser, a $30 million expansion in Albuquerque [1]. But the documents, not the initiation notes, govern the reward: the interfaces are open, the variant decision is scheduled, and the tier above already belongs to component makers. Holders of that spread are underwriting a durability the contract deliberately withholds.

## Takeaway

LOCUST X3 is the first high-energy laser the United States has contracted for production, but open interfaces on 12 subsystems, component rivals above it and a scheduled 2031 variant decision keep AeroVironment's profit claim temporary.

## Sources

1. [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," September 2, 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)
2. [Tech Times, "AeroVironment's LOCUST X3 Wins Army's First Laser Weapon Contract; Sled Beats Fixed Mount," October 16, 2026](https://www.techtimes.com/articles/329121/20261016/aerovironments-locust-x3-wins-armys-first-laser-weapon-contract-sled-beats-fixed-mount.htm)
3. [Aviation Week, Steve Trimble, "U.S. Army Defines Goals For E-HEL Upgrade Plan," October 13, 2026](https://aviationweek.com/defense/missile-defense-weapons/us-army-defines-goals-e-hel-upgrade-plan)
4. [Defense News, Leandra Bernstein, "US Army targets 2028 for first high-energy laser counter-drone weapons," October 13, 2026](https://www.defensenews.com/industry/techwatch/2026/10/13/us-army-targets-2028-for-first-high-energy-laser-counter-drone-weapons/)
5. [Yahoo News, Nikshep Myle, "The U.S. Army's Laser Weapon Cut Cartel Drone Activity by 75% in Two Weeks," September 8, 2026](https://www.yahoo.com/news/us/articles/u-army-laser-weapon-cut-183435093.html)
6. [nLIGHT press release via Nasdaq, "nLIGHT Awarded $627 Million Joint Laser Weapon System (JLWS) Contract," July 9, 2026](https://www.nasdaq.com/press-release/nlight-awarded-627-million-joint-laser-weapon-system-jlws-contract-2026-07-09)
7. [AeroVironment press release via Business Wire, "AV Secures First International Order for LOCUST Directed Energy Counter-Drone Systems," September 10, 2026](https://www.businesswire.com/news/home/20260908106462/en/AV-Secures-First-International-Order-for-LOCUST-Directed-Energy-CounterDrone-Systems)
8. [MT Newswires via MarketScreener, "Macquarie Initiates AeroVironment at Outperform With $210 Price Target," October 16, 2026](https://www.marketscreener.com/news/macquarie-initiates-aerovironment-at-outperform-with-210-price-target-ce785cdada8bff27)
9. [AeroVironment quarterly figures from its SEC filings, retrieved October 17, 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001368622)


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The Army's first production laser pays AeroVironment $464.8 million and keeps the profit contestable — The Inference. Canonical: https://theinference.org/article/the-army-s-first-production-laser-pays-aerovironment-464-8-million-and-keeps-the-profit-contestable