Redwire Corp (RDW) shares surged 13.9% to $17.49 on Friday, capping a 24% gain for the week as investors reacted to two major defense contract wins. The rally pushed trading volume to over 55 million shares, well above average, as the company continues to expand its footprint from space hardware into unmanned aerial systems.
The buying spree was triggered by a $15 million follow-on order from the U.S. Army's 1st Aviation Brigade for Redwire's Stalker uncrewed aerial systems (UAS), used for reconnaissance and target acquisition. This marks the company's third order from that customer in the past eight months, bringing total recent orders to $24.8 million. Additionally, Redwire announced a multi-year contract in the "high eight-figures" from a NATO ally for its Penguin Mk3 tactical UAS.
Steve Adlich, president of Redwire's Defense Tech division, described the NATO deal as "a forward-looking approach" to tactical drone upgrades among allied nations. The contracts underscore Redwire's strategy to diversify beyond its core space systems business and capitalize on growing military demand for autonomous platforms.
The new orders build on strong first-quarter results. Redwire reported Q1 revenue of $97.0 million, up 57.9% year over year, with a record backlog of $498.1 million. The book-to-bill ratio rose to 1.92, indicating nearly twice the value of new orders relative to revenue booked during the quarter. CEO Peter Cannito highlighted "very strong demand" for the company's products, while CFO Chris Edmunds noted "record total liquidity." Redwire maintained its 2026 revenue outlook of $450 million to $500 million.
In a separate filing, AE Industrial Partners converted its remaining Series A convertible preferred shares into 15,247,586 common shares and subsequently sold them in open-market transactions, reducing its reported stake below 5%. The move leaves no preferred stock outstanding at Redwire.
The rally extended to other defense and space stocks. Rocket Lab (RKLB) rose 8.2% on Friday, AeroVironment (AVAV) gained 6.8%, and Kratos Defense (KTOS) added 2.8%. The broader market, as measured by the SPDR S&P 500 ETF (SPY), rose 0.4%.
Despite the positive momentum, risks remain. Redwire reported a first-quarter net loss of $76.5 million and negative adjusted EBITDA of $9.2 million. Management has flagged potential delays, intense competition, government budget uncertainty, and challenges in converting backlog into revenue as key risks.
U.S. stock markets are closed Monday for Memorial Day, with trading resuming Tuesday. Investors will be watching to see if Friday's high-volume surge is a one-off reaction to the contract headlines or signals a broader re-rating of Redwire as a defense-tech growth play.
