Let’s dig into the relative performance of AeroVironment (NASDAQ:AVAV) and its peers as we unravel the now-completed Q4 defense contractors earnings season.
Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds.
The 14 defense contractors stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was in line.
While some defense contractors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.1% since the latest earnings results.
Focused on the future of autonomous military combat, AeroVironment (NASDAQ:AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.
AeroVironment reported revenues of $408 million, up 143% year on year. This print fell short of analysts’ expectations by 14.6%. Overall, it was a softer quarter for the company with full-year revenue guidance missing analysts’ expectations significantly and full-year EBITDA guidance missing analysts’ expectations significantly.
AeroVironment Total Revenue
AeroVironment achieved the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Still, the market seems discontent with the results. The stock is down 20.2% since reporting and currently trades at $211.49.
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ:DRS) is a provider of defense systems, electronics, and military support services.
Leonardo DRS reported revenues of $1.06 billion, up 8.1% year on year, outperforming analysts’ expectations by 7%. The business had an exceptional quarter with a solid beat of analysts’ revenue estimates and a solid beat of analysts’ EBITDA estimates.
Leonardo DRS Total Revenue
The market seems happy with the results as the stock is up 20.2% since reporting. It currently trades at $45.85.
Delivering aerospace technology during the Cold War-era, Parsons (NYSE:PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.
Parsons reported revenues of $1.60 billion, down 7.5% year on year, falling short of analysts’ expectations by 4.1%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and a significant miss of analysts’ revenue estimates.
Parsons delivered the weakest full-year guidance update in the group. As expected, the stock is down 28.5% since the results and currently trades at $50.21.
Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.
RTX reported revenues of $24.24 billion, up 12.1% year on year. This print surpassed analysts’ expectations by 7%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 3.4% since reporting and currently trades at $200.79.
Established with a commitment to supporting national security, Kratos (NASDAQ:KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Kratos reported revenues of $345.1 million, up 21.9% year on year. This result beat analysts’ expectations by 6.3%. It was a very strong quarter as it also logged an impressive beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.
The stock is flat since reporting and currently trades at $93.81.
Late in 2025 into early 2026, there was hand wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?
These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.
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