AML3D Ltd (ASX: AL3) shares are having a strong finish to the week.
In morning trade on Friday, the ASX defence stock is up 14% to 16 cents.
Why is this ASX defence stock rising?
Investors have been buying AML3D shares after the company announced that its first two custom ARCEMY systems are now operational at Newport News Shipbuilding.
Newport News Shipbuilding is a division of HII, which AML3D describes as the largest military shipbuilder in the United States. It delivers nuclear-powered aircraft carriers and submarines, surface ships, and defence technology.
This is an important milestone because it completes AML3D's initial order with the shipbuilder, worth approximately $4.5 million.
It also triggers the final payment of approximately $892,000 to the ASX defence stock.
What is being delivered?
The two ARCEMY X systems are custom, large-scale metal 3D printing systems.
They use a heavy-capacity positioner to create large metal parts for shipbuilding applications.
AML3D said Newport News Shipbuilding plans to use the systems to support advanced additive manufacturing, reduce lead times, and provide alternatives to traditional manufacturing techniques.
This is important because defence shipbuilding often involves long and complex supply chains. If additive manufacturing can shorten production times or provide alternative supply routes, it could become increasingly valuable to military manufacturers.
More systems on the way
Today's update is not just about the first two systems becoming operational.
AML3D also confirmed that a second order from Newport News Shipbuilding is tracking for on-time delivery in early 2027.
That order is worth approximately $9.9 million and covers four additional custom ARCEMY X systems.
Once delivered, Newport News Shipbuilding is expected to have an initial fleet of six custom ARCEMY X systems.
This suggests AML3D's technology is gaining traction with a major player in the US defence sector.
Management commentary
Commenting on the news, the ASX defence stock's CEO, Sean Ebert, said:
The strong and growing demand we are seeing from the US MIB is a ringing endorsement of AML3D's U.S. scale up strategy. We are doubling the capacity at Stow to ensure we are well positioned to maximize the opportunity outlined in the letter of intent we received from the US Navy earlier in the 2026 financial year that indicated a need for up to 100 additive manufacturing systems and 3,400 additively manufactured parts by 2030.
Ebert also spoke positively about its opportunities in Europe. He adds:
It is also pleasing to see the same demand signals that underpinned AML3D's strategic push into the U.S. market are emerging in other globally significant defense markets, in particularly the UK where AML3D has already won UK defense contracts. We are looking to leverage our U.S. strategic playbook in Europe, with plans and funds to establish a European Technology and manufacturing hub as we have done is Stow.
Establishing a European hub will position AML3D with manufacturing capability to support the USA, UK and Australia, the three signatories to the trilateral AUKUS defense partnership. We will also have the capacity to deliver on our strategic growth driver of accessing non-defense industrial manufacturing sectors across the U.S., Europe and Australia.
The post ASX defence stock jumps 14% on US military news appeared first on The Motley Fool Australia.
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