AERG - A Quick Update + Interactive Financial Model
Yesterday, I published a full investment thesis on Applied Energetics (AERG) on Seeking Alpha. Many of you have followed the AERG story here over several posts—this piece brings everything together into one complete overview.
👉 Read the full Seeking Alpha article here
The core idea is straightforward. The Department of Defense has a problem. It knows it has a problem. It is actively spending to solve that problem. And I’m convinced that AERG has the best product-market fit for the urgent challenge the DoD is trying to address. The company is approaching a key inflection point. In July, AERG is scheduled to demonstrate five distinct variants of its ultrashort pulse laser (USPL) platform—each built for a specific battlefield use-case. If those demonstrations succeed, the company should begin moving from lab-stage validation to production-stage deployment.
New: Interactive Financial Model
To supplement the article, I’ve built an interactive financial model:
The model is intentionally simple, because in this case, something more complex isn’t necessary. The assumptions are basic, the structure is straightforward, and that’s the point. When the upside case is this asymmetric, directional accuracy is what matters.
Based on my conversations with management, I believe they would view my assumptions as conservative—some of them extremely so. You can test that for yourself. If AERG delivers successful demos and begins production, even modest scenarios suggest the stock is significantly undervalued.
What’s Not Included in the Model
The model doesn’t include any upside from potential future applications in manufacturing, healthcare, or agriculture—areas like precision micromachining, skin disease detection or crop treatments. These may represent meaningful long-term value, but they’re outside the scope of what’s modeled. The current focus is entirely on a set of DoD use-cases. That framing is intentional.