The Army's first laser weapon production contract is for drone defense. Leonardo DRS will provide power and cooling.
Leonardo DRS (DRS) will provide power and cooling systems for AeroVironment's (AVAV) 30-kilowatt LOCUST X3 laser weapon, part of the U.S. Army's Enduring-High Energy Laser (E-HEL) program. The E-HEL is the Army's first production contract for a high-energy laser weapon system, aimed at countering unmanned aircraft threats. DRS's role supports AV's production of the LOCUST X3 for the Army's counter-UAS operations.
How this was made
The 30-second read
Why it matters
The contract signals continued funding for directed‑energy weapons, potentially expanding the market for both companies and their suppliers.
Market read
First‑report contract award to two publicly traded defense firms; may drive short‑term stock moves and longer‑term sector interest.
What to watch
The announcement provides no financial terms; the actual impact depends on execution and future Army funding.
Background
The U.S. Army's Enduring‑High Energy Laser (E‑HEL) program aims to field a mobile 30‑kW laser system to counter drones. Leonardo DRS and AeroVironment are key partners delivering the system.
Ticker impact
Leonardo DRS announced it won a subcontract to provide power and cooling for the U.S. Army's E-HEL laser weapon program.
likely upward pressure as the market prices in the new defense contract
First disclosure of a sizable Army contract; defense spend is a tailwind for DRS.
AeroVironment was selected by the Army for the E-HEL program and named DRS as a subcontractor for its LOCUST X3 laser system.
potential upside as investors view the award as a catalyst for future orders
Primary source announcement of a new production contract; material for AVAV's growth.
Market effects
Strengthens the defense and directed‑energy sector, highlighting growing U.S. investment in counter‑UAS capabilities.
Positive for U.S. defense contractors; may modestly lift related peers.
Shows continued U.S. focus on high‑energy laser weapons, relevant to global defense supply chains.
Counterpoint
If the program faces technical delays, the contract value could be lower than expected, limiting upside.
Key entities
- CompanyLeonardo DRS, Inc.
Defense contractor providing power and thermal‑management subsystems.
- CompanyAeroVironment, Inc.
Prime contractor for the Army's LOCUST X3 laser weapon system.
