AeroVironment, Inc. (AVAV) Gains Tailwinds as Geopolitical Tensions Drive Defense Investment

AeroVironment, Inc. (NASDAQ:AVAV) is one of the defense & aerospace stocks gaining from rising geopolitical spending. On January 21, analysts at Citizens reiterated a Market Outperform Rating on AeroVironment, Inc. (NASDAQ:AVAV) and set a $400 price target.

According to Citizens, the company is well-positioned to benefit from tailwinds in the US and from global defense priorities driving rapid funding and procurement in key aerospace domains. A merger with BlueHalo is also expected to create a scaled design-to-production engine across the drone and cyber spaces. In addition, the company can capitalize on its strong international base as a second growth engine.

RBC Capital has also reiterated an Outperform rating and a $375 price target on the stock, despite the company receiving a stop-work order from the US Department of Defense regarding the BADGER phased-array antenna system. The program was expected to generate about $175 million in revenue in fiscal 2026, with a larger share in the second half of the year.

AeroVironment, Inc. (NASDAQ:AVAV) is a defense technology leader that creates intelligent, multi-domain robotic systems, including drones (UAS), loitering munitions (e.g., Switchblade), and counter-UAS (C-UAS) solutions for defense, government, and commercial clients.

While we acknowledge the potential of AVAV as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.