5 Best Defense Contractor Stocks to Buy Right Now

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1. AeroVironment Inc. (NASDAQ:AVAV)

Stock Upside Potential: 46.89%

Number of Hedge Fund Holders: 40

AeroVironment, Inc. (NASDAQ:AVAV) is one of the best defense contractor stocks to buy right now. On March 23, analysts at BTIG reiterated a Buy rating on AeroVironment, Inc. (NASDAQ:AVAV) and a $330 price target.

The positive stance is in response to the company receiving two firm-fixed-price contracts. Under the $117 million contract, the company is to deliver P550 long-range reconnaissance uncrewed aerial vehicles (UAVs) to the US Army. The contract includes finding unmanned aerial systems, battery chargers, ground control stations, launchers, and training materials.

The Red Dragon contract seeks to support the Army’s Long Range Reconnaissance program and represents the first contract for the company’s one-way platform. AeroVironment’s management is confident the platform will scale to Switchblade-like levels by the end of the decade.

According to BTIG, the latest contract underlines momentum across the company’s Autonomous Systems segment. Earlier in the month, the company secured a $97.4 million contract under the U.S. Army’s Aviation and Missile Technology Consortium (AMTC). The contract is for the development and delivery of a Generative Environment for the Next Era of Spectral Imaging Stimulators (GENESIS).

AeroVironment Inc. (NASDAQ:AVAV) is a leading defense technology company specializing in intelligent, multi-domain robotic systems, including small unmanned aircraft systems (UAS), tactical missile systems, and unmanned ground vehicles.

While we acknowledge the potential of AVAV to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AVAV and that has 100x upside potential, check out our report about the cheapest AI stock.

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