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AeroVironment is caught in an unusual split this week: short sellers are adding to positions at the fastest monthly pace in recent memory, yet options traders have stepped back from the defensive extremes that defined the previous note.
The positioning story has shifted in one direction since the September 30 article. Short interest has continued climbing, reaching 10% of the free float as of October 7. That marks a 21% build over the past month and a 5% rise just this week, the highest level in the 30-day window covered by the data. A month ago the conversation was whether shorts would keep pressing after a sharp price drop. The answer has been yes. What has changed is the borrow market's temperature. Availability has actually loosened materially, moving from roughly 31% at the end of September to 47% now, the most room in the lending pool seen in several weeks. Cost to borrow has eased to 0.76%, down about 9% on the week, though it remains about 25% above where it was a month ago. The picture is one of more shorts on the register but slightly less pressure in the borrow market itself: the pool grew, so availability improved even as more shares were lent out.
Options have quieted down considerably. The put/call ratio is now 0.76, virtually in line with its 20-day average of 0.76 and only a tenth of a standard deviation above the mean. Two weeks ago the PCR was the loudest signal in the note, running more than 2.6 standard deviations above average. That defensive excess has unwound. The 52-week range on the PCR runs from 0.44 to 1.08, so the current reading is comfortably mid-range. Options traders appear to have absorbed the September sell-off rather than continuing to hedge against further downside.
The Street picture is mixed and has been moving in one direction. Rothschild initiated coverage this week with a Neutral rating and a $165 target, close to where the stock is trading at $138.86. That target is well below the consensus mean of $216. Jefferies and BofA both cut targets in mid-September, to $204 and $185 respectively, from $229 and $225, while maintaining Buy ratings. JPMorgan raised its target slightly at the same time to $210. The pattern is a Street still broadly constructive on the long-term thesis, but trimming near-term ambitions after weaker price action. The ORTEX short score of 68 places AVAV in the bottom 5% of names by short positioning rank, a persistent feature of this stock this year. The 30-day EPS momentum factor sits in the 80th percentile, suggesting estimate revisions have been running in the right direction recently even as the 90-day picture is weaker at the 10th percentile.
The activist angle remains relevant. Altitude V Holdings, which filed a Schedule 13D in May 2025 and amended it in June 2026, holds 13.5% of the class, down from 14.7% at the prior filing. That reduction is worth noting alongside the broader ownership picture: Vanguard Group disclosed a position of zero in a March 2026 filing, having previously held 7.6%, while BlackRock trimmed from 8.2% to 6.7% in its July filing. As with all 13D/G disclosures, these stakes are as-last-filed and positions can change below the 5% threshold without a further filing. The combination of an activist still on the register at a meaningful weight but trimming, and passive giants reducing exposure, describes a holder base in motion. Arlington Management, with 23.8% of shares, remains the dominant anchor.
The next earnings event is scheduled for December 9. Between now and then, the key dynamic to watch is whether the short interest build continues toward the 52-week availability low of 8.4%, which would mark a meaningfully tighter borrow market than the current 47%, or whether the stock finds enough stabilisation to reverse the monthly trend that has added more than a fifth to the short count.
See the live data behind this article on ORTEX.
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