6 Best Small-Cap Drone Stocks to Invest In

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1. Redwire Corporation (NYSE:RDW)

Market Capitalization: $1.28 Billion

Analyst Upside: 157.27%

Number of Hedge Fund Holders: 10

Redwire Corporation (NYSE:RDW) is one of the best small-cap drone stocks to invest in. On August 8, H.C. Wainwright lowered the price target on Redwire Corporation (NYSE:RDW) stock from $26 to $22, keeping its Buy rating.

Scott Buck from H.C. Wainwright downgraded the price target of RDW following challenging Q2 FY2025. The company posted revenue of $61.8 million, missing the estimates by $18.72 million. Redwire experienced a sequential decline in adjusted EBITDA, from a negative $2.3 million in Q1 to a negative $27.4 million in Q2, mainly affected by higher estimated costs on a single program. Moreover, the company also faced delays in the U.S. government budgeting processes, impacting revenue and pushing some awards into FY2026.

Buck has decreased 2026 estimates for Redwire; however, he recommends using the post-earnings selloff as a buying opportunity. Redwire’s subsidiary, Edge Autonomy, recently secured a prototype phase agreement by the U.S. Army to build and deliver its Stalker UAS for the Long Range Reconnaissance program.

Redwire Corporation (NYSE:RDW) is an integrated aerospace and defense company. The company is engaged in autonomous systems, including UAS, through Edge Autonomy.

While we acknowledge the potential of RDW 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 RDW and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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