Why Did AeroVironment Stock Drop Today?

By Rich Smith – Feb 27, 2026 at 12:21PM ESTKey PointsThe U.S. Army awarded AeroVironment a $186 million task order for Switchblade drones yesterday.The order was part of a previously awarded $990 million IDIQ contract.AeroVironment (AVAV 6.07%) stock tumbled 4.6% through noon ET Friday on no obvious bad news. Actually, the contrary: AeroVironment had excellent news just yesterday. For $186 million, the U.S. Army will order an unspecified number of AV's Switchblade 600 Block 2 and Switchblade 300 Block 20 loitering munition systems armed with explosively formed penetrators (EFP). AeroVironment investors made the logical choice and bid up this maker of military drones 1.7% yesterday. But today they're taking that money back -- and more. As of this writing, not only is AeroVironment stock below where it traded the day before the contract was announced; it's actually trading back near levels last seen mid-month. But why? Image source: Getty Images. The U.S. Army is looking for a few good drones Partly, it's probably because yesterday's contract announcement doesn't actually involve AeroVironment getting any "new" money from the Army. As the company advised, the $186 million order is part of a previous $990 million Pentagon indefinite delivery, indefinite quantity (IDIQ) award that AV received in 2024. The award does confirm the Army's "confidence in the next evolution of the Switchblade family and its relevance to modern, contested battlefields," as AV Senior VP of Loitering Munitions Brian Young asserted. But it doesn't really add anything to future revenue or future profit. ExpandNASDAQ: AVAVAeroVironmentToday's Change(-6.07%) $-15.75Current Price$243.87Key Data PointsMarket Cap$13BDay's Range$243.00 - $252.9652wk Range$102.25 - $417.86Volume23KAvg Vol1.4MGross Margin21.66% Is AeroVironment stock a sell? That's one reason investors' enthusiasm for AeroVironment stock may be fading. A second reason is valuation. Priced at $248 a share and with an $18 billion market capitalization, AeroVironment sells for a pricey 150 times trailing earnings right now, and for a price-to-sales ratio of 10.9. That's an extremely expensive valuation for a defense stock -- as I've previously explained -- leading me to conclude that investors are really selling off AV stock for just one reason: It costs too much.Read NextFeb 20, 2026 •By Danny Vena, CPAWhy AeroVironment Stock Took Flight and Climbed 15% This WeekFeb 17, 2026 •By Joe TenebrusoWhy AeroVironment Stock Climbed TodayFeb 8, 2026 •By John BromelsThe Autonomous Robotics Stock Wall Street Insiders Are Quietly Buying (Hint: It's Not Tesla)Jan 27, 2026 •By Rich SmithWhy Shares of AeroVironment Got Crushed Last WeekJan 23, 2026 •By Brett SchaferWhy Shares of AeroVironment Stock Crashed This WeekJan 20, 2026 •By Rich SmithWhy AeroVironment Stock Dropped TodayAbout the AuthorRich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”TMFDittyX@RichSmithFoolStocks MentionedAeroVironmentNASDAQ: AVAV$244.29(-5.91%)-$15.34*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.