Palladyne, Red Cat Stocks Soar On Expanded AI Drone Collaboration And Key Defense Contract Win: Retail Optimism Grows

Shares of Palladyne AI Corp. ($PDYN) and Red Cat Holdings Inc. ($RCAT) surged Wednesday after the companies announced an expansion of their partnership, now including joint go-to-market initiatives for self-flying drones. 

PDYN climbed over 11%, while RCAT soared more than 30%, reaching levels not seen in over three years.

PDYN sentiment and message volume on Nov 20 as of 10:30 am ET | source: Stocktwits

On Stocktwits, retail sentiment for PDYN turned 'bullish', while RCAT became one of the top three trending symbols as of mid-morning.

 

 

The partnership builds on an earlier collaboration revealed last month, where Red Cat’s Teal drones were equipped with Palladyne AI’s advanced software for autonomous operations. 

The integrated system enhances surveillance and reconnaissance capabilities for defense, public safety, and commercial applications.

Red Cat also secured a major win with the U.S. Army, receiving a contract to develop short-range reconnaissance (SRR) unmanned aircraft systems. 

The initial award covers nearly 6,000 systems, valued at around $260 million over the next three to five years, with potential additional orders for spare parts and training that could boost the deal’s total value by 30%-50%.

In response to the contract, Ladenburg upgraded Red Cat’s price target to $9 from $4 while maintaining a ‘Buy’ rating. The firm sees “significant opportunity beyond SRR” for the company.

“We are extremely proud to be working with Teal on integrating our Palladyne Pilot artificial intelligence software into Teal's drones,” said Ben Wolff, CEO of Palladyne AI, while congratulating Red Cat on its defense win, calling the SRR contract “well-deserved.”

Year-to-date, PDYN shares have climbed over 180%, while RCAT has soared an astounding 635%, underscoring investor enthusiasm for their cutting-edge drone technology and growing defense presence.