What Happened?
Shares of aerospace and defense company Mercury Systems (NASDAQ: MRCY) jumped 24.9% in the afternoon session after the company reported second-quarter 2025 results that significantly beat Wall Street's expectations for both revenue and profitability. The aerospace and defense firm announced revenue of $273.1 million, a 9.9% year-on-year increase that surpassed analyst estimates of $244.2 million. The company's bottom line was even more impressive, with adjusted earnings per share of $0.47, more than double the consensus forecast of $0.22. This strong performance was also reflected in its operational efficiency, as its operating margin improved to 8.6% from a negative 3.2% in the same period last year. Additionally, Mercury Systems reported a healthy backlog of $1.4 billion, indicating a solid pipeline of future business.
Is now the time to buy Mercury Systems? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Mercury Systems’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for Mercury Systems and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 27 days ago when the stock gained 3.6% on the news that the company announced it signed two agreements with a major European defense prime contractor to expand and accelerate the production of critical technology for radar and electronic warfare missions. The deal strengthens Mercury's foothold in the European defense market and provides improved revenue visibility. The first agreement is a five-year contract to increase the production of sensor processing subsystems for various radar systems. The second expands an existing deal for Monolithic Microwave Integrated Circuit (MMIC) products, which are essential components for electronic warfare sensors that capture and convert radio frequency signals. These agreements build on a long-standing relationship with the unnamed European contractor and underscore the growing demand for advanced, secure processing capabilities in the defense sector.
Mercury Systems is up 59.9% since the beginning of the year, and at $67.67 per share, has set a new 52-week high. Investors who bought $1,000 worth of Mercury Systems’s shares 5 years ago would now be looking at an investment worth $849.09.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.