NEW YORK, June 5, 2026, 07:02 (EDT)
Merlin Inc (MRLN) shares were up sharply before the bell Friday after the autonomous-flight software maker announced its C-130J project with U.S. Special Operations Command passed a major engineering milestone, advancing the aircraft work closer to integration and formal tests. Premarket quotes put the stock at $9.14 at 6:47 a.m. EDT, a 25.7% gain.
Merlin is still fresh as a public defense-tech name and early on revenue, so investors are watching for proof its military autonomy work is turning into real hardware. The stock stood out on a weaker day, with Reuters saying Nasdaq and S&P 500 futures dipped Friday before U.S. payrolls numbers.
Merlin said late Thursday it’s wrapped up a Critical Design Review for its C-130J autonomy effort. The CDR is a step that shows the design can go forward to integration and ground and flight tests.
Merlin’s chief executive and founder Matt George said in a company statement, “Completing the Critical Design Review validates the architecture we’ve built for safe, scalable autonomy.” George said Merlin now moves to integration, ground testing and then aims for flight demos. GlobeNewswire
Merlin shares jumped 22% to $8.79 in after-hours trading Thursday, according to Dow Jones, reversing a year-to-date loss of 33% at the close. MarketScreener’s Cboe BZX data pegged the shares at $9.16, up 27.6%, at 6:37 a.m. EDT Friday.
Contract structure matters here. Merlin calls the C-130J work an IDIQ, or indefinite-delivery/indefinite-quantity contract. That means the government can issue orders up to a fixed cap, without locking in the whole amount up front. Merlin puts the C-130J IDIQ ceiling above $100 million.
Merlin started trading on Nasdaq as MRLN on March 17 following a business combination, according to an SEC filing. With only a short run as a public company, the stock has swung sharply. There’s not much trading history, the stock moves on a few program milestones, and investors are focused more on future contract wins than reported earnings.
Merlin’s latest balance sheet shows it has some room left but leaves little leeway. The company posted first-quarter revenue of $1.0 million, a GAAP net loss of $90.4 million, and an adjusted EBITDA loss of $23.3 million. After the equity financing on May 1, Merlin said it held $183 million in cash, cash equivalents and short-term investments, with no debt.
TD Cowen started coverage of Merlin this week with a buy rating and set an $11 target, citing the company’s autonomy software for the C-130J and KC-135 military aircraft, according to Investing.com. Wall Street is beginning to track the post-listing story.
The competitor field remains unsettled. CB Insights puts Shield AI, Skyryse, and Daedalean in the same space as Merlin Labs, according to its listings. Reuters on Friday said Shield AI, a private defense autonomy outfit, was hit with safety and operational complaints involving its V-BAT drone system. Shield AI rejected those claims, pointing to user error as the cause of a recent injury.
The review isn’t a fielded system or a big revenue contract yet. Merlin still faces aircraft integration, testing, getting customer acceptance, and, if it goes commercial, certification. The company warned that comments on test timing, performance, and expansion are forward-looking and carry risks.
Friday’s stock setup is straightforward. There’s a new military program milestone, a brief history as a public company, and a big premarket jump that draws traders in. Now the question is if the CDR opens the door to flight demos that investors can see, or if shares lose ground when regular trading picks up and more volume comes in.
