Why the Army Just Handed Aerovironment a Half Billion Dollar Laser Deal

Good morning. This is Dylan Jovine here with Behind the Markets. Happy Tuesday.

Today is Tuesday, August 11th, and today I'd like to talk about the military. This is something I haven't really talked about in a while, but there's so many exciting things that are happening in the military in terms of the weaponry that we're using, and a lot of lessons that we're learning from the Iran war, the Ukraine war, etc., etc. And ironically, a lot of these lessons are things that we've talked about here for years.

We made kind of our name and our reputation on geopolitics and defense companies, as you well know, those of you who've been on this. But, you know, what got me to want to talk about this today was one of the companies in our model portfolio, AeroVironment, that we recommended at much lower prices, just got a basically almost a $500 million dollar contract, almost half a billion dollar contract, to come up with counter-drone lasers. So, the US Army is buying at least $400 million worth of counter-drone lasers from AeroVironment.

And, you know, basically what the Army is betting on, and you could see this happening with war, is that AeroVironment's loitering system, which basically tracks, identifies, and helps human operators destroy small to medium-sized drones with a high-energy laser, the Army is betting on that this will be a better solution to dealing with a massive incoming drones than other solutions. And this is something else that I've talked about. There's so much stuff happening here.

By the way, this is the Pentagon's first-ever contract for directed energy counter-drone system. And I don't know, for those of you who've been around for a while, you might remember a couple years back I was saying, "Lasers are going to be the thing.