Why Aerovironment Stock Jumped 57% in 2025

Drone-maker Aerovironment (NASDAQ: AVAV) (AV) was among the winners last year as the company benefited from its acquisition of BlueHalo, increasing interest in drones, and President Trump's promises to increase spending on law enforcement and the military.

Aerovironment also delivered strong growth and expanded its addressable market, securing a major contract with the U.S. Army and seeing a surge in bookings.

According to data from S&P Global Market Intelligence, the stock finished the year up 57%. As you can see from the chart below, the stock was volatile over the year, but still finished with strong gains.

AVAV data by YCharts

What happened with Aerovironment last year

The biggest news last year out of Aerovironment was its acquisition of BlueHalo, which nearly doubled the company's revenue. The deal was announced in November 2024, but didn't close until May 2025, so it didn't start to impact the company's results until last year.

BlueHalo is known for its strength in space, cyber, and directed energy, which complements AV's strength in unmanned drones, robots, and other autonomous systems, significantly broadening the scope of the high-tech defense company.

The acquisition is clearly having an impact on the business. In the second quarter of 2025, which includes all of the BlueHalo acquisition, revenue jumped 151% to $472.5 million. Most of that came from BlueHalo, but organic revenue was up 21%, showing that the core business continues to deliver solid growth. AV also reported bookings of $1.4 billion, a strong indicator of future revenue, as those bookings will convert into revenue as the service is provided. Its backlog, which is defined as orders that have been funded, reached $1.1 billion.

The stock's trend over the year, as you can see above, shows that there's still a lot of risk and much of its performance is linked to future expectations and investor sentiment around drones and emerging technology.

However, unlike other emerging tech stocks, including the electric vertical takeoff and landing (eVTOL) sector, AV has historically been profitable and is expected to generate adjusted earnings per share of $3.40-$3.55.

Image source: Getty Images.

What's next for Aerovironment

The new year has just started, but AeroVironment is already off to a blistering start, up 52.6% through Jan. 15, driven by increasing interest in defense stocks after the U.S. apprehended President Maduro of Venezuela. President Trump also said he wanted to boost the 2027 defense budget from $1 trillion to $1.5 trillion, which should be a boon to the company.

2026 is shaping up to be another strong year for Aerovironment.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.