ASX drone stock jumps 9% to record high on US news

Elsight Ltd (ASX: ELS) shares are starting the year with a bang.

In morning trade, the ASX drone stock is up 9% to a new record high of $3.36.

Why is this ASX drone stock jumping?

Investors have been fighting to get hold of the uncrewed systems connectivity platform provider’s shares following the release of an update on its strategic development program with a leading defence prime contractor.

According to the release, in addition to its uncrewed systems applications, the company’s strategic development program has led to the development of a communications device (Aura), which has been designed with the flexibility to support dismounted and soldier-level communications use cases.

Management notes that this significantly expands the potential addressable market beyond Elsight’s current core unmanned systems markets and opens additional defence and security application pathways.

It highlights that the strategic development program was structured to progress through defined development, validation, and delivery milestones.

Following the completion of the development and qualification process, it is now transitioning from development into production. This has seen the ASX drone stock commence the delivery of the initial batch of Aura units ordered under the first phase of the program.

US expansion

In addition, Elsight revealed that as part of its ongoing strategy to expand its on-the-ground presence in the United States, it has signed two senior sales and business development executives. They will begin working this month.

It highlights that both appointments bring extensive experience and working contacts with U.S. Department of Defence programs. This includes backgrounds in special forces units and proven track records in supporting U.S. government and defence procurement processes.

Management expects these executives to accelerate the conversion of existing U.S. opportunities that are already in the pipeline, while also generating new opportunities across defence and government channels.

Commenting on the news, the ASX drone stock’s CEO, Yoav Amitai, said:

Completing the development phase of Aura and moving into delivery is an important execution milestone for this program. In parallel, we are investing deliberately in the U.S. market, both through senior hires and through close engagement with government and OEM partners. We are confident in our alignment with U.S. regulatory frameworks and remain focused on executing against the growing opportunity set in this market.

Following today’s gain, Elsight shares are now up approximately 330% since this time last year.

The post ASX drone stock jumps 9% to record high on US news appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.