Why Aerovironoment Stock Gained 15% in January

Shares of drone-maker Aerovironment (NASDAQ: AVAV) were on the move last month as the stock soared in the first half of January before giving up most of those gains in the second half of the month.

Early on in January, AV, as the company is also known, benefited from a social media post from President Trump proposing to expand the 2027 military budget from $1 trillion to $1.5 trillion. A proposed ban on Chinese drones from the FCC in December also seemed to give AV a boost heading into January, though the government withdrew those plans later on in the month.

According to data from S&P Global Market Intelligence, the stock finished the month up 15%. As you can see from the chart below, it was a roller coaster month for Aerovironment.

AVAV data by YCharts

What happened with Aerovironment

After soaring through 2025 on broader excitement in the drone sector, Aerovironment got off to a strong start in January.

The stock gained in each of the first seven sessions of the month, and the stock jumped 8% on Trump's post about expanding the military budget, as AV is primarily a defense stock, though drones have a wide range of applications.

After peaking on Jan. 16, the stock began a decline, which was sparked by a stop work order being issued by the U.S. government for the delivery of BADGER phased array antenna systems to support the Satellite Communication Augmentation Resource, or "SCAR" program.

Towards the end of the month, Aerovironment seemed to pull back on a broader sell-off in software and tech stocks.

Image source: Getty Images.

What's next for Aerovironment

For an emerging technology growth company, Aerovironment is an appealing stock because it offers both strong growth and it has a history of profits.

The company reported organic revenue growth of 21% to $227.4 million in its most recent quarter and $472.5 million, including the BlueHalo acquisition. It also recorded bookings of $1.4 billion, which bodes well for the company's future growth.

The company is the leader in providing unmanned aerial systems to the military, and it looks poised to consolidate its leadership following the BlueHalo acquisition.

Drone technology should have a bright future ahead of it as it advances, and it should play a greater role in military operations. At a market cap of $14 billion currently, the stock has a lot of upside potential in front of it if it can execute on the growth opportunity in front of it.

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.