Shares of Palladyne AI Corp. (NASDAQ:PDYN) surged around 15% on Tuesday after the company announced it had won a contract from a leading U.S. defense prime contractor to supply a critical propulsion subsystem for an existing U.S. missile program.
The agreement is expected to generate close to $1 million in revenue in 2026 for the Salt Lake City–based defense and industrial technology group. Under the contract, Palladyne AI will deliver mission-critical hardware tied to missile propulsion, with all deliverables scheduled for completion by the end of the third quarter of 2026.
According to the company, the prime contractor selected Palladyne AI based on its established defense manufacturing capabilities, strong performance on prior defense programs, and its ability to execute on accelerated timelines.
“This contract win represents a meaningful step in scaling our defense manufacturing revenues and reinforces our strategy of embedding Palladyne AI into long-lifecycle weapons programs,” said Ben Wolff, Chief Executive Officer of Palladyne AI. “It also reflects the confidence that another leading defense prime has placed in our ability to deliver mission-critical hardware on demanding timelines.”
Management said the contract could help deepen its relationship with the prime contractor and potentially lead to expanded involvement across long-life-cycle U.S. missile platforms. Palladyne AI added that the award supports its broader strategy of strengthening its role within the U.S. defense industrial base, with an emphasis on domestically produced solutions that support national security systems.
Palladyne AI Corp. focuses on embodied AI-powered collaborative autonomy solutions, advanced avionics, precision-manufactured components, unmanned aerial vehicles, and aerospace engineering services.