Anduril Industries Aims for IPO with Major U.S. Army Contract

Privately held defense Stock company Anduril Industries is making significant waves in the defense sector. Co-founder Palmer Luckey has stated that it is “important” for Anduril to pursue an IPO, emphasizing that the firm is “on a path to being a publicly traded company” after doubling its 2024 revenue to $1 billion.

Investors are now faced with an intriguing question: If $1 billion in revenue can support an IPO for Anduril Industries, what implications arise if the company were to achieve $22 billion?

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Strategic Alliance with Microsoft

This month, Anduril made headlines by announcing a partnership with Microsoft (NASDAQ: MSFT) to develop an Integrated Visual Augmentation System (IVAS) for the U.S. Army. However, the details suggest this arrangement may resemble a takeover by Anduril rather than a traditional partnership, particularly as the project is valued at $22 billion.

Anduril will take the lead on developing and producing the software and hardware for IVAS, which is a mixed-reality headset. Microsoft, which originally secured the contract in 2021 for $21.9 billion over ten years, will now focus mainly on providing its Azure cloud services to enhance the AI software integral to IVAS.

Understanding the U.S. Army’s IVAS

Anduril’s core mission for IVAS includes enhancing capabilities such as “beyond line-of-sight perception” and improving “combat effectiveness,” particularly concerning “survivability against drones” and boosting command capabilities of unmanned systems. Although these terms are somewhat broad, they indicate a focus on practical applications, such as real-time drone surveillance integration with operator headsets.

For instance, when soldiers deploy surveillance drones, the VIAS technology enables direct information transmission to users’ headsets, allowing battlefield visibility that extends beyond direct sight. Furthermore, the headset could steer kamikaze drones toward their targets. These functionalities align seamlessly with Anduril’s focus on AI-powered military drones.

Thus, Anduril emerges as a natural leader for this contract, enabling it to leverage its strengths while Microsoft returns to optimizing profit from Azure.

Image source: Getty Images.

Implications for Anduril’s Future

The news is proving positive for Anduril, reflecting a step forward toward its IPO ambitions. CNBC reports that Anduril is currently negotiating to raise up to $2.5 billion in new funding, positioning the company at a valuation of $28 billion.

This valuation likely stems from Anduril’s anticipated revenue of $1 billion annually, already demonstrating a strong growth trajectory. However, if the U.S. Army approves Anduril’s expanded role with IVAS, revenue could potentially triple. A $22 billion contract over ten years translates to an additional $2.2 billion per year on top of current revenue.

In summary, if Anduril’s Stock was previously estimated at $28 billion, this new contract could boost the valuation to as much as $90 billion in an IPO.

In short? Finding a way to invest in Anduril Stock before the IPO could yield significant returns.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

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