This article looks at the 8 Best Drone Stocks to Buy for the Next 3 Years.
Swarms of AI-powered drones and loitering munitions have filled the skies of the Middle East, as the Iran-US-Israeli war crosses 15 days and spreads to countries in the Gulf Cooperation Council.
Drones proved their mettle in the Russia-Ukraine war and were also a prominent feature in the conflict between Azerbaijan and Armenia previously, and involving India and Pakistan last year.
As a result, the last few years have seen a surge in demand for them, as militaries increasingly adopt this technology, which not only strikes enemy targets with pinpoint accuracy but is also affordable and reduces dependence on ground forces.
According to a report on CNBC late last month, Oppenheimer has forecast that the addressable market for drones will be worth around $400 billion over the next decade. The firm described drones as the fastest-growing investment opportunity in ‘physical’ artificial intelligence.
Moreover, analysts at Oppenheimer noted the growth in global defense markets over the past few years amid an increasing number of geopolitical conflicts. They believe drones are a major driver of this growth, adding that the technology could also impact other commercial technologies.
In a note to investors on Thursday, the analysts further argued that the market will, in the future, revolve around unmanned drones, autonomous systems, and robots, and that these will shape how several institutions function. They were quoted as saying the following by CNBC:
“AI is driving an infrastructure and soon a manufacturing boom as well as dozens of Physical AI use cases (Waymo), with drones the fastest-growing. Whoever wins the drone swarm arms race will win the war. This requires new mobile edge compute/network/blockchain technology, a natural evolution from the internet and cloud which will be commercialized.”
With that said, let’s now head over and see some of the best drone stocks to buy for the next 3 years.
Methodology
We reviewed ETFs with drone-themed exposure and our previous articles on the subject to build a stock universe. The list was narrowed to include only stocks with an expected earnings-per-share growth rate of 10% or more over the next five years, as of the close on March 13. We then shortlisted the top 8 companies that had the highest number of hedge fund investors having a stake in them, based on Insider Monkey’s database of prominent hedge funds as of Q4 2025.
Finally, we ranked them in ascending order based on the number of hedge funds holding positions. When two or more stocks were tied in hedge fund sentiment, we used market cap as a tiebreaker.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
8 Best Drone Stocks to Buy for the Next 3 Years
8. AeroVironment, Inc. (NASDAQ:AVAV)
Number of Hedge Fund Holders: 40
AeroVironment, Inc. (NASDAQ:AVAV) is among the 8 Best Drone Stocks to Buy for the Next 3 Years. On March 12, BTIG analyst Andre Madrid slashed the firm’s price target on the stock to $330 from $415, while maintaining a Buy rating.
The adjustment followed the company’s Q3 2026 financial results earlier in the week, which missed Wall Street’s expectations for both revenue and profit. The drone maker announced diluted earnings per share of $0.64 from a quarterly revenue of $408 million, against forecasts of $0.68 cents over $476 million.
AeroVironment, Inc. (NASDAQ:AVAV)’s unfunded backlog at the end of the quarter totalled $3 billion, which included $1.4 billion tied to the U.S. Space Force’s Satellite Communications Augmentation Resource (SCAR) program, which is ‘no longer expected to be awarded,’ said the company.
While the development has left investors concerned, BTIG believes the share price slump following the quarterly results stemmed more from the company’s weak performance in the Cyber & Mission Systems segment than from the SCAR termination. The firm also believes BlueHalo’s assets are taking a toll on AeroVironment, Inc.’s (NASDAQ:AVAV) margins.
In other news, on the same day, Canaccord Genuity also lowered its price target to $300 from $330, citing the Space Force’s SCAR contract termination. The firm kept its Buy rating. As of the close on March 13, the drone maker is a Strong Buy with an average upside of 49%.
AeroVironment, Inc. (NASDAQ:AVAV) designs and manufactures unmanned aerial vehicles, ground robot systems, and loitering munition systems.
