Army Awards AeroVironment $500M Counter-Drone Contract — LOCUST Laser to Down Threats at $3 a Shot

The US Army awarded AeroVironment Inc. a $500 million firm-fixed-price contract on July 1, 2026, for commercial counter-unmanned aerial systems, accelerating the service's effort to field layered defenses against the drone threat that has come to define modern warfare. The contract — awarded by Army Contracting Command at Detroit Arsenal, Michigan, under contract number W912CH-26-D-A073 — runs through June 29, 2029, giving the Army a three-year path to procure Group 1, 2, and 3 counter-drone capabilities across fixed sites and forward positions.

The award encompasses both counter-UAS and counter-small-UAS capabilities, spanning the full range of aerial threats from commercially available quadcopters and FPV attack drones to larger one-way attack and reconnaissance unmanned aircraft. AeroVironment's key system in the mix is the LOCUST (Laser Operation Counter UAS System-Terrestrial) directed-energy laser, which the company says can engage small drones at a cost as low as $3 per shot — compared with the millions it costs to fire a Patriot or similar interceptor against the same threat. That math, brutally exposed by Iran's use of cheap Shahed drones during the 2026 conflict, is precisely what the Army is paying to fix.

AeroVironment had already delivered four LOCUST prototype systems to the Army under the AMP-HEL (Army Multi-Purpose High Energy Laser) prototyping program — two on Infantry Squad Vehicles and two on Joint Light Tactical Vehicles — before the contract was announced. The LOCUST X3 variant is rated at 20–35+ kW and uses AV_Halo Pinpoint software for precision tracking. A competing system, General Dynamics' Leonidas AGV microwave-based counter-drone platform, was unveiled the same day AeroVironment unveiled LOCUST X3 in March 2026, keeping competition active for any future program of record.

The contract's announcement came days after AeroVironment reported blowout fiscal year 2026 earnings: full-year revenue of $1.976 billion, up 141% from $820.6 million in FY2025, with Q4 revenue of $641.6 million representing 31% organic growth year-on-year. The company's stock surged nearly 40% in a single week on the combined news. AeroVironment CEO Wahid Nawabi guided FY2027 revenue of $2.125–$2.225 billion. Combined with a $874.26 million foreign military sales IDIQ won in December 2025, AeroVironment has secured more than $1.3 billion in drone-related contract capacity in approximately seven months.

The award also highlights unresolved interagency coordination challenges. In February 2026, a LOCUST system deployed near El Paso International Airport caused a seven-hour airspace shutdown after FAA safety concerns were triggered — and in a separate incident the same month, a Pentagon-loaned laser system operated by US Customs and Border Protection destroyed what turned out to be Mylar balloons near the airport. The Army is scaling up a technology that still lacks a clear interagency protocol for operating in shared civilian airspace — a structural gap the $500 million contract does nothing by itself to close.