diff --git a/hive/daemon/daemon.go b/hive/daemon/daemon.go
index afc892592..3cc374019 100644
--- a/hive/daemon/daemon.go
+++ b/hive/daemon/daemon.go
@@ -1109,6 +1109,34 @@ func (d *Daemon) handleEC2Events(msg *nats.Msg) {
 
 	}
 
+	// If a stop command, clean up resources but keep instance state
+	if command.Attributes.StopInstance && command.QMPCommand.Execute == "system_powerdown" {
+		slog.Info("Stopping instance", "id", command.ID)
+
+		// Update status to stopping
+		d.Instances.Mu.Lock()
+		instance.Status = "stopping"
+		d.Instances.Mu.Unlock()
+
+		// Stop the instance (keep volumes)
+		stopInstance := make(map[string]*vm.VM)
+		stopInstance[instance.ID] = instance
+		err = d.stopInstance(stopInstance, false)
+
+		if err != nil {
+			slog.Error("Failed to stop instance", "err", err)
+			return
+		}
+
+		// Update status to stopped
+		d.Instances.Mu.Lock()
+		instance.Status = "stopped"
+		instance.Attributes = command.Attributes
+		d.Instances.Mu.Unlock()
+
+		slog.Info("Instance stopped", "id", command.ID)
+	}
+
 	// If a terminate command, clean up resources
 	if command.Attributes.TerminateInstance {
 		slog.Info("Terminating instance", "id", command.ID)
diff --git a/hive/gateway/ec2/instance/StopInstances.go b/hive/gateway/ec2/instance/StopInstances.go
index bac5669ec..799db7643 100644
--- a/hive/gateway/ec2/instance/StopInstances.go
+++ b/hive/gateway/ec2/instance/StopInstances.go
@@ -12,7 +12,7 @@ import (
 )
 
 // StopInstances sends stop commands to specified instances via NATS
-// Uses system_powerdown without stop_instance attribute to allow restart
+// Uses system_powerdown with stop_instance attribute to prevent auto-restart on daemon boot
 func StopInstances(input *ec2.StopInstancesInput, natsConn *nats.Conn) (*ec2.StopInstancesOutput, error) {
 	if len(input.InstanceIds) == 0 {
 		return nil, fmt.Errorf("no instance IDs provided")
@@ -30,7 +30,7 @@ func StopInstances(input *ec2.StopInstancesInput, natsConn *nats.Conn) (*ec2.Sto
 		instanceID := *instanceIDPtr
 
 		// Build the QMP command to stop the instance
-		// Note: system_powerdown without stop_instance allows restart
+		// Note: system_powerdown with stop_instance=true prevents auto-restart on daemon boot
 		command := qmp.Command{
 			ID: instanceID,
 			QMPCommand: qmp.QMPCommand{
@@ -38,7 +38,7 @@ func StopInstances(input *ec2.StopInstancesInput, natsConn *nats.Conn) (*ec2.Sto
 				Arguments: map[string]any{},
 			},
 			Attributes: qmp.Attributes{
-				StopInstance:      false, // Allow restart on daemon/node restart
+				StopInstance:      true, // Don't auto-restart on daemon boot
 				TerminateInstance: false,
 			},
 		}