Investing.com — Shares of AeroVironment Inc. (NASDAQ:) rose 9.6% following the U.S. Government Accountability Office’s (GAO) decision to deny a protest against the Department of the Army’s contract award to the company for its Switchblade dive-bombing drones.
The denial of the protest, which was filed in September, marks an important step for AeroVironment, allowing the company to continue fulfilling its obligations under the potentially lucrative contract.
The stock’s rise reflects investors’ relief and optimism as the GAO’s ruling removes significant uncertainty that had been looming over the company. The stock rose 9.6% during the trading session after the news was announced.
Noting the positive result for AeroVironment, William Blair analyst Louie DiPalma said, “This ruling reduces stock overhang and clears AeroVironment to receive follow-on orders for the Switchblade-600.”
The approval to proceed with the contract and the opportunity for follow-on orders appears to have boosted investor confidence in the company’s future revenue streams.
AeroVironment has expressed its intention to comply with the obligations under the contract and any delivery orders that may be issued during the term of the contract.
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