AeroVironment, HPQ Silicon, BAE Systems: It Is All About the Battery

AeroVironment: The US Army Calls

AeroVironment is benefiting directly from the global drone boom. On Wednesday, the US defense contractor received another order from the US Army worth USD 51 million for Switchblade 600 systems. The order is part of the Lethal Unmanned Systems IDIQ contract and underscores the growing demand for precision loitering munitions.

The Switchblade 600 combines reconnaissance and attack capabilities in a single system. The drone can travel more than 90 km, remain airborne for over 40 minutes, and then be deployed against armored targets. The experiences in Ukraine, in particular, have demonstrated the importance of cost-effective unmanned systems today.

AeroVironment has long since diversified its portfolio. The company develops autonomous systems for air, land, sea, and space, as well as counter-UAS, cyber, and electronic warfare technologies. A second recent announcement demonstrates the full extent of its expertise. AeroVironment received a contract to develop and manufacture three autonomous helicopters for NASA's SkyFall mission to Mars. The launch is scheduled for 2028.

These contracts highlight how rapidly autonomous systems are advancing technologically. However, with longer ranges, additional sensors, and increasing payloads, energy requirements are also growing. This is precisely why batteries are becoming an increasingly important component of the drone market.

HPQ Silicon: Now It Is Time for a Breakthrough

HPQ Silicon is taking a decisive step closer to commercializing its battery technology. Together with Novacium, the company has delivered ten specially configured battery packs to each of three European drone manufacturers. The batteries are already in the final planned evaluation phase prior to potential product qualification. What began in late 2025 could thus soon lead to a commercial partnership.

The battery packs were individually adapted to the manufacturers' drone platforms based on their feedback. Novacium's GEN3 and GEN4 technologies rely on silicon anodes, which are expected to enable higher energy densities than traditional graphite anodes. For drones, this can result in a decisive competitive advantage, translating to greater range, higher payload, or a combination of both.

The target market is growing rapidly. The European Commission expects the European market for drone services to grow to around EUR 14.5 billion by 2030. This development is particularly interesting for HPQ, as the company holds a stake in Novacium and possesses the exclusive North American rights to its technologies.

These latest advances did not come out of nowhere. Just last August, the HPQ Endura+ GEN4-21700 platform received UN 38.3 certification. This allows the cells to be shipped internationally for customer qualifications and commercial applications. Step by step, technical development is turning into a market-ready product.

But batteries are only part of the story. HPQ positions itself as a technology platform for advanced materials and industrial processes. In addition to energy storage systems, the company is developing a novel technology for the production of pyrogenic silica (fumed silica). The material produced in the pilot reactor has already achieved independently verified commercial quality. Added to this are technologies for decentralized hydrogen production and for using waste materials for energy generation.

These three European drone manufacturers could now become the decisive game-changer. If product qualification is successful, HPQ would have important proof that the technology not only works in the lab but also meets real-world industrial requirements. This transition could be decisive for the stock's future valuation.

BAE Systems: Rearmament in Full Swing

BAE Systems demonstrates the scale that the rearmament of Western armed forces has now reached. Last week, the first four new ARCHER 8x8 artillery systems were delivered to the Swedish Armed Forces. The delivery is part of the modernization of the Swedish artillery and underscores the high demand for modern weapons systems.

ARCHER is one of the most advanced mobile artillery systems in Europe. The automated 155-mm howitzer can quickly take up a firing position, fire multiple rounds, and then leave the position. The system thus responds to a trend that is also being accelerated by drones.

At the same time, BAE Systems announced another major contract from the US. For USD 149.8 million, the company will modernize and maintain the amphibious assault ship USS Boxer. If all options are exercised, the contract value could rise to USD 180 million.

BAE Systems thus exemplifies the high levels of investment in new and existing defense systems. At the same time, the technological focus is shifting. Autonomous systems, drones, sensors, and electronic warfare are gaining in importance. This also increases the demand for high-performance mobile power supplies. The defense boom is therefore creating new markets far beyond traditional tanks, ships, or artillery.

The drone boom is transforming not only the defense industry but also its supply chains. AeroVironment is already benefiting from rising Switchblade orders, while BAE Systems is generating billions in revenue in a globally expanding defense market. For HPQ Silicon, however, the decisive phase is just beginning. Following the first order for FPV drones, 30 battery packs are now being tested by three additional European manufacturers. If they pass qualification, the silicon-based battery technology could evolve from a development project into a commercial growth driver.