Yesterday had been a field day for traders dealing with the stock of AgEagle Aerial Systems, Inc. (UAVS). After seeing a general climb of 12.5% during the day, UAVS further climbed by an additional 12.1% in the aftermarket. The growth trajectory continues as a result of heightened attention the stock is gaining, and the growth potential it offers.
UAVS Drone Approval by Defense Innovation Unit
The price hike is primarily a result of a press release issued by AgEagle yesterday, delivering a crucial milestone update. The company’s subsidiary, SenseFly developed a commercial drone that got approval from the Pentagon’s Defense Innovation Unit (DIU). AgEagle acquired its European subsidiary SenseFly earlier in October for $23M. The clearance by the DIU for AgEagle’s developed sky drone signals a massive stride for UAVS. The stock movement observed over the last 24 hours is a clear indicator of this. This event came in the context of the Defense Department’s Blue sUAS 2.0 program.
AgEagle Shift into Defense Industry
The Blue sUAS 2.0 initiative is one that focuses on a short-range non-combat drones for the purposes of reconnaissance, mapping, and observation. The milestone marks AgEagle’s entry into the defense industry, following the commercial usage of its simple drone devices. Being a vendor to the US government for procurement of critical defense equipment drastically enhances financial sustainability for UAVS. Moreover, the defense industry is one that has seen heightened interest, following Russia’s invasion of Ukraine. As tensions mount, both NATO and non-NATO states are likely to see a significant increase in their overall defense budgets. These developments directly lead to the defense industry seeing significant financial gains. The sudden expansion in AgEagle’s growth caused a huge driving up of the company’s stock.
Enhanced Market Credibility
SenseFly’s sky drone is the first to be categorized under the ‘Blue UAS Cleared List’, holding significant implications for UAVS. The drone would no longer require a Defense Department policy exception for operation or procurement. It further adds credibility to the company’s fleet of products, having undergone cybersecurity evaluations and compliance checks.
Conclusion
The sudden climb in UAVS share price is related to its subsidiary’s drone gaining approval from the Pentagon’s DIU. Gaining entry into the defense industry as a vendor to the US government vastly boosts AgEagle’s financial sustainability. It also gains significant market credibility, enhancing prospects of growth and expansion
