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An AeroVironment drone. Most of the company’s business is in defense.
Patrick T. Fallon/Bloomberg
Stock in the defense supplier
AeroVironment
is jumping Wednesday as President Joe Biden said the U.S. will send drones to help Ukraine defend against the Russian invasion.
“The American people are answering President Zelensky’s call for more help, more weapons for Ukraine to defend itself,” said Biden on Wednesday. “It includes 800 antiaircraft systems…9,000 anti-armor systems…this will include drones, which demonstrates our commitment to sending our most cutting-edge systems.”
The total incremental support announced this week comes to $1 billion.
AeroVironment
(ticker: AVAV) supplies drones to the U.S. military. Its Switchblade 600 drone, for instance, “represents the next generation of extended-range loitering missiles,” according to the company’s website. A Switchblade is like a flying bomb that can be launched and then aimed at an armored vehicle the operator identifies.
AeroVironment shares closed up 9.8%, at $81.47, on Wednesday. The
S&P 500
and
Dow Jones Industrial Average
closed up 2.2% and 1.6%, respectively.
The impact is large for AeroVironment because it is a small-capitalization stock. Wednesday’s move added roughly $150 million in market value to the company.
“AeroVironment is not in a position to comment on the specifics of the U.S. government’s military aid for Ukraine or the transfer of equipment between governments,” a spokeswoman said.
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