AeroVironment (NASDAQ: AVAV) stock took off like a rocket Wednesday morning, rising by 16.5% through 10:15 a.m. ET, after the Pentagon announced the company's single biggest contract win ever.

The news led Tuesday night's press release listing the biggest Defense Department contracts awarded that day: $990 million awarded to AeroVironment "to provide an organic, stand-off capability to dismounted infantry formations capable of destroying tanks, light armored vehicles, hardened targets, defilade and personnel targets."

Admittedly, that language is a bit vague. What it probably refers to, though, are Pentagon purchases of Switchblade 600 "loitering munition systems" (aka, kamikaze drones). Featuring "high-precision optics, over 40 minutes of loitering endurance, and an anti-armor warhead for engaging larger, hardened targets at greater distances," this drone seems tailor-made for the mission described in the Pentagon's press release.

Continue reading

Source Fool.com