Shares of military drone maker Aevex got sucker-punched Thursday following a report that the U.S. Navy has suspended purchases of its speedboats used to launch drones from the sea. Aevex is disputing the report.

Shares of Aevex were down 32.5% on Wednesday to around $10, less than half what they closed at on Aevex’s first day as a public company in April. Shares of other drone makers, including AeroVironment, Kratos, and Karman appeared unaffected by the news.

The move is a huge blow to the up-and-coming drone maker, which was on track to increase its sales from $433 million in 2025 to between $700 million and $720 million in 2026, according to its latest earnings report in August. It gets most of its revenue from contracts with the U.S. government.

The Navy has spent $136.8 million on the boats to date, according to Bloomberg, which reported the suspension. The halt was due to “ongoing performance issues related to limitations to the hardware and the emergence of more suitable alternatives, including cheaper one-way attack drones,” Bloomberg added.

Aevex said it is proud of the boat’s “proven record of service with the U.S. Navy.” It added that “Recent reporting on GARC’s operational performance is inaccurate.” The company went on to deny that any orders for the drone boats had been halted.

The U.S. Navy declined to comment on the report.

The sting is even worse for Aevex because it just completed a $650 million purchase of BlackSea, the company that makes the boats, in September. The 16-feet vessels, known as global autonomous reconnaissance crafts, can hold up to 1,000 pounds of payload and can travel at speeds up to 40 knots, which is the equivalent of around 46 miles an hour.

More broadly, the halt shows the challenges the U.S. military is facing in its billion-dollar “Drone Dominance” program created under President Donald Trump in 2025 and aimed at “unleashing American drone dominance.”

Drone stocks have suffered from so-called “drone malaise” recently over concerns that spending will get throttled after the midterms if Democrats gain control of the House (and possibly the Senate). AeroVironment, Karman, and Kratos are all down around 50% for the year.