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Palladyne AI Corp. (Nasdaq: PDYN) stock experienced a dramatic surge on January 28, 2026, jumping 26.23% to $8.23 as of 10:07 AM EST after opening at $9.51. The software company’s shares soared following the announcement of a significant contract award from the U.S. Air Force Research Laboratory (AFRL).

Trading volume skyrocketed to over 25.8 million shares, far exceeding the average daily volume of approximately 1.8 million shares, signaling intense investor interest in this defense technology development.

Air Force Contract Expands Palladyne’s Swarming AI Capabilities

Palladyne AI was awarded the “Hierarchical Adaptive Networked Game-Theoretic Integration of Multiple Echelons (HANGTIME)” contract by AFRL to address a critical challenge in modern defense operations, enabling different autonomous systems to work together as a coordinated team.

The project will utilize Palladyne’s patented SwarmOS software platform, the defense variant of its Palladyne Pilot embodied AI software, to bridge communication gaps between autonomous systems across space, air, maritime, and land domains.

This contract represents a significant expansion of Palladyne’s technology capabilities, as it marks the first time the company will integrate satellites into its autonomous systems network. The integration extends Palladyne’s reach from ground-based operations to orbit, enabling faster decision-making and coordinated mission execution across multiple domains.

According to Dr. Denis Garagic, Chief Technology Officer at Palladyne AI, “The HANGTIME project is a breakthrough that unites high-altitude assets and situational unmanned systems into one coordinated sensor network, delivering a major advantage for the defense industry.”

The technology addresses a persistent problem in defense operations where drones, ships, and satellites typically operate independently, limiting how quickly warfighters can respond to threats. By connecting disparate systems so they can share intelligence and adapt to changing conditions in real time, the SwarmOS platform aims to transform tactical commanders into strategic commanders with enhanced cross-domain intelligence, surveillance, and reconnaissance (ISR) capabilities.

PDYN Stock Jumps as Volume Surges on Contract News

As of 10:07 AM EST on January 28, 2026, Palladyne AI stock was trading at $8.23, up $1.71 or 26.23% from the previous close of $6.52. The stock opened at $9.51 and reached an intraday high of $9.56 before settling back.

The company’s market capitalization stood at approximately $372 million, with a 52-week range between $4.14 and $13.00. Year-to-date, PDYN has delivered exceptional returns of 95.19%, significantly outperforming the S&P 500’s 2.21% gain over the same period.

Despite the strong stock performance, Palladyne AI remains in a growth phase with challenging fundamentals. The company reported Q3 FY25 revenue of just $860,000 against earnings of -$3.74 million, with trailing twelve-month revenue of $4.35 million and a net loss of $41.44 million.

The company’s diluted EPS stands at -$1.66, and it maintains no P/E ratio as it continues to operate at a loss. However, with $57.15 million in total cash and relatively low debt-to-equity ratio of 19.66%, the company appears adequately funded to pursue its defense contracts.

Analyst sentiment reflects cautious optimism, with price targets ranging from $7.00 to $11.00 and an average target of $9.00. The latest rating from Jefferies on September 11, 2025, initiated coverage with a “Hold” rating and a price target of $8.00.

Recent company developments include increasing full-year 2026 revenue guidance to $24-27 million and launching Palladyne IQ 2.0, signaling the company’s transition toward operational profitability as it secures additional defense contracts like the AFRL HANGTIME project.

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