V2X (VVX) is becoming a major defense contractor, while its overall financial results are improving significantly. Importantly, it is using AI to improve its products; Wall Street appears enthused about the company, and its valuation is extremely low. Consequently, growth investors should consider buying the shares.
V2X provides a variety of technical products, including AI systems, data offerings, and training products to militaries, aviation entities, and operations and infrastructure companies.
Becoming a Major Defense Contractor
In 2026, V2X has won many major deals from the U.S. and foreign militaries. For example, on September 23, the firm noted that it had obtained “a contract modification worth up to $231.8M for base support services” for the U.S. Air Force in Iraq.
Even more impressively, V2X disclosed in February that the Pentagon made it eligible to receive a portion of $25 billion it set aside to improve the military’s technological prowess. Among the areas in which V2X can compete for contracts under the designation are systems engineering, automated testing, and microelectronics assurance.
Finally, V2X was awarded a contract last month worth up to $800 million to furnish the Marines with “logistics integration services.” Additionally, it will be one of several firms supporting the production of long-range B-52 cruise missiles under a $46 million contract.
During the company’s second-quarter earnings call, held on August 3, CFO Shawn Mural reported that the firm had generated about $200 million in revenue from national security sources in the first half of the year, while it expects to receive approximately $180 million from the category during the second half of the year.
AI-Powered Improvements and Commendable Overall Financial Results
In February, the company noted that it would partner with Alphabet’s (GOOG) Google to provide “AI and cloud solutions” to the federal government. Additionally, V2X has integrated Amazon’s (AMZN) AI models into its warehouses and is also using IBM’s (IBM) AI capabilities.
On the Q2 call, Mural said V2X was spending funds to boost its own “AI capabilities,” and added that the firm had bid on $8 billion in projects that would involve its AI systems.
And in Q2, V2X’s revenue rose 17% versus Q2 of 2025 to $1.26 billion, and its net income, excluding certain items, advanced an impressive 22% year-over-year to $51.6 million.
Wall Street Appears to Appreciate V2X, and Its Valuation Is Very Attractive
In August, prominent investment banks Morgan Stanley and Stifel were both quite upbeat about V2X. In the wake of the company’s Q2 performance, Morgan Stanley raised its price target on the name to $90 from $80 and kept an Overweight rating on it.
More impressively, Stifel hiked its price target to $102 from $79 and reiterated a Buy rating on the shares.
In the three months ended September 24, the shares climbed 6% despite market volatility, while VVX stock had jumped 40% in 2026 as of September 24.
On the valuation front, the shares are trading at a very low forward P/E of 10.8 times, despite V2X’s strong growth and the Pentagon’s increasing reliance on its offerings.
This article is intended to be informational only; it is not financial advice.
