Defense stocks rally after AeroVironment delivers record quarterly performance

Safe Pro Group Inc. announced preliminary, unaudited revenue expectations for the third quarter ended September 30, 2026, projecting revenue to increase by over 2,300% to more than $2.5 million, compared with $101,422 in the third quarter of 2025. For the nine months ended September 30, 2026, the company expects revenue to increase by over 1,200% to more than $5.0 million compared with $378,977 in the same period of 2025. The growth is driven by multiple U.S. Government subcontract awards supporting the U.S. Army and U.S. Air Force, including a $1.3 million subcontract from a U.S. defense prime contractor to integrate real-time AI threat detection onto autonomous unmanned ground vehicles and a $780,000 U.S. Army award for a package including its NODE AI edge-processing systems and Blue UAS drones. Third quarter 2026 revenue represents an increase of approximately 88% on a sequential basis compared with the second quarter of 2026. Safe Pro continues to deliver against U.S. Army and recent government contract awards for its AI software powering edge-based compute solutions, representing more than $5 million in aggregate awarded contract value year-to-date.

Lantronix President and CEO Saleel Awsare will attend the Association of the U.S. Army 2026 Annual Meeting and Exposition in Washington, D.C., from Oct. 12 to 14, where he will hold meetings with investors, defense customers and partners. The company said its unmanned systems business grew from a minimal contribution in fiscal 2025 to $12.6 million in revenue in fiscal 2026. Lantronix also cited the recent Blue UAS Framework listing of its Open-Q 8550CS System-on-Module, which expands access to U.S. defense and government programs, and demand tied to the Department of War's $1.1 billion Drone Dominance Program as well as European and beyond-visual-line-of-sight markets. The company reported more than 30 active engagements across defense, commercial, public safety and counter-UAS, with customers and partners including Sightline, AVT Australia, Swarmer and Unusual Machines. Awsare said customer demand is moving Lantronix up the value chain toward integrated edge AI for autonomous systems.

Federal Ammunition, Mossberg and Palladyne AI Corp. announced the joint development of SwarmShot, a modular autonomous airborne counter-unmanned aircraft system designed to turn compatible drones into reusable air-to-air interceptors operating as a collaborative kinetic defensive swarm. SwarmShot will combine Federal's specialized counter-UAS shotshell ammunition, a lightweight Mossberg weapon module purpose-engineered for airborne operation, and Palladyne AI's IntelliSwarm autonomy system, which pairs BRAIN avionics with SwarmOS collaborative autonomy software. The system will first be developed as a modular mission add-on for Gremlin-X, Palladyne AI's Group 1 quadcopter mini-bomber, after which the companies plan to offer SwarmShot to other manufacturers as an integration kit for compatible unmanned aircraft. Federal will lead ammunition design and terminal-effect optimization, drawing on its recent U.S. Army counter-UAS ammunition contract, while Mossberg leads the airborne weapon module and Palladyne AI leads UAS integration, fire control, terminal-intercept autonomy and multi-interceptor coordination. The effort is a defensive application of Palladyne AI's predictive autonomy collaborative swarming capability, recently deployed with the U.S. Army at Project Convergence Capstone 6 and other Army exercises. Development schedules, potential customer engagements and financial terms were not disclosed.

Booz Allen Hamilton announced in late September 2026 that Michael D. Brasseur, a 26-year U.S. Navy veteran and former Saab Inc. Chief Strategy Officer, joined the firm as an executive vice president to lead its defense technology business and guide partnership and innovation efforts in robotics, autonomy, and AI. Brasseur was the founding Commodore of the Navy's Task Force 59, and the hire aligns Booz Allen's leadership with operational experience in fielding unmanned and AI-enabled systems for defense missions. The move follows the July 2026 expansion of the Vellox AI powered cyber defense suite, and together the two developments underline the company's ambition to shift more work toward higher margin, tech enabled offerings. Booz Allen Hamilton Holding's narrative projects $12.5 billion revenue and $758.8 million earnings by 2029, requiring 4.1% yearly revenue growth and an earnings decrease of $13.2 million from $772.0 million today, with forecasts yielding a $85.23 fair value, a 27% upside to its current price. Some of the lowest ranked analysts are more cautious, assuming only about US$12.0 billion of revenue and US$782.1 million of earnings by 2029, and worry that heavier contract risk on AI programs could blunt the benefits of hires like Brasseur.