This article looks at the 9 Best Drone Stocks to Buy According to Wall Street Analysts.
Modern conflicts are rapidly evolving and forcing governments to rethink their security policies. Drones and loitering munitions have been a noticeable feature in conflicts this decade.
Militaries are actively adopting this agile technology due to its cost advantage, ability to cut dependence on ground troops, and carry out complex operations that exceed the capabilities of traditional aircraft.
Swarms of drones launched by Iran against Gulf states in the recent war were foiled by multimillion-dollar interceptors, evoking a debate on the need to have cheaper alternatives to counter the emerging threat from drones.
Mike Brown, partner at Shield Capital, while talking to CNBC in March, said that the world had become more dangerous, with technologies that were on the drawing board some years back now having demonstrated their capabilities during recent conflicts.
Last month, Bloomberg quoted a Pentagon official as saying that the Army was looking to secure a long-term agreement with RTX Corp to ensure a steady supply of the defense contractor’s Coyote drone interceptors.
While the details are still being finalized, the official said funding would likely be requested in fiscal 2027 for a framework agreement and a multi-year contract.
Tom Karako, missile defense analyst at the Center for Strategic and International Studies, was quoted as saying the following on the development:
“It’s just not true that we are having to use $4 million interceptors to shoot down drones. There’s packs of Coyotes out there in the field, and they’re taking out threats right and left, but there needs to be a lot more.”
With that said, let’s now head over to the list of the best drone stocks to buy according to Wall Street analysts.
Methodology
We reviewed ETF holdings with exposure to military drones, as well as our previous articles on the subject. Both pure-play military drone makers and companies with drone programs were included in our pool. From there, we selected the top stocks with the highest average share price upside potential as of the close on Friday, May 8, 2026, and ranked them in ascending order. Additionally, we also included data on hedge fund holdings in these companies as of Q4 2025 to provide further insight into investor interest.
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).
9 Best Drone Stocks to Buy According to Wall Street Analysts
9. Honeywell International Inc. (NASDAQ:HON)
Share Price Upside: 20%
Number of Hedge Fund Holders: 79
Honeywell International Inc. (NASDAQ:HON) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. As of the close of business on May 8, the stock is a Moderate Buy, with an average share price upside potential of 20%.
On April 27, RBC Capital maintained its Outperform rating on the stock with a share price target of $268. This was a reaffirmation of the firm’s previous update in January and followed the company’s recent announcement of first-quarter 2026 financial results.
Honeywell International Inc. reported sales of $9.14 billion for Q1, increasing 2% year-over-year, but missing estimates of $9.31 billion. Earnings per share crashed 35% from the prior year to $1.29 due to higher restructuring costs.
While the company reaffirmed its full-year outlook for 2026, it projected Q2 revenue below Wall Street’s forecasts, due to the adverse impact of the Middle East conflict on its business.
Following the results, several other firms, including TD Cowen, Barclays, and Citigroup, also trimmed their price targets on the stock, while keeping their bullish outlook for the company.
In other news, on April 27, the industrial giant declared a quarterly dividend of $1.19 per share on common stock. The payment is scheduled for June 5 to all shareholders on record as of the close on May 15.
Honeywell International Inc. is an integrated operating company serving a range of industries by delivering actionable solutions to address complex challenges in aviation, automation, and process technology.
8. RTX Corporation (NYSE:RTX)
Share Price Upside: 26%
Number of Hedge Fund Holders: 79
RTX Corporation (NYSE:RTX) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. On May 6, the company announced that its Raytheon business had received an order for 120 SharpSight radars from Blue Raven.
This marks the largest order so far for the multi-domain surveillance radar, which is used by both manned and autonomous systems for vital operations such as border security and monitoring, search and rescue, anti-surface warfare, and long-range surveillance.
According to the press release, RTX Corporation will manufacture and sustain the radar under the terms of the agreement, while Blue Raven will be responsible for global resale and distribution. The collaboration between the two companies is expected to expand the system’s availability to customers globally.
In other news, the aerospace and defense company said last week that AirAsia had ordered 150 Airbus A220 aircraft, which will be powered by Pratt & Whitney GTF engines. The agreement also includes a 12-year engine maintenance agreement with the airline.
Wall Street continues to rate RTX a Moderate Buy, based on 15 analysts’ recommendations, as of the close of business on May 8. The stock has an average share price upside potential of 26%.
RTX Corporation is a giant in the global aerospace and defense industry, providing systems and services to commercial, military, and government clients. It operates through three main businesses: Collins Aerospace, Pratt & Whitney, and Raytheon.
7. Lockheed Martin Corporation (NYSE:LMT)
Share Price Upside: 27%
Number of Hedge Fund Holders: 59
Lockheed Martin Corporation (NYSE:LMT) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. As of the close of business on May 8, Wall Street analysts anticipate a 27% upside to the company’s shares.
Recent updates include Morgan Stanley, which on April 24 lowered its price target on the stock to $653 from $675 while keeping an Equal-Weight rating. The firm said it was revising the model for the defense contractor following its Q1 results and cut its full-year EPS estimate range to $29.90 from $30.05, according to a report on TipRanks.
Lockheed Martin Corporation reported a revenue of $18 billion for the first quarter, remaining flat compared to the prior year’s period and missing forecasts of $18.24 billion. Net earnings reduced from $7.28 last year to $6.44 per share, falling shy of estimates by 28 cents.
Following the results, Susquehanna also trimmed its price target on the stock to $700 from $740, while maintaining a Positive rating.
In other news, earlier this month, the company secured a contract from the U.S. Space Force Space Systems Command to support the Space-Based Interceptor (SBI) program and deliver an early engagement layer for missile defense.
Lockheed Martin Corporation is one of the world’s largest defense contractors. It specializes in the research, design, and development of advanced technology systems, products, and services. It is famed for manufacturing notable fighter jets, including the F-35.
6. L3Harris Technologies, Inc. (NYSE:LHX)
Share Price Upside: 30%
Number of Hedge Fund Holders: 48
L3Harris Technologies, Inc. (NYSE:LHX) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. As of the close of business on May 8, the stock is a Strong Buy with an average share-price upside potential of 30%.
This is despite recent price target reductions following first-quarter financial results. On May 4, Bernstein analyst Douglas Harned slashed the stock’s price target to $405 from $435, citing budget uncertainty for 2027.
The firm said it was waiting for contracts for missile growth plans to be signed. However, Bernstein reiterated its Outperform rating on L3Harris Technologies, Inc. after beating revenue and earnings estimates for Q1.
Earlier on May 1, UBS also lowered its price target on the stock to $330 from $362, while maintaining a Neutral rating.
The defense contractor reported a total revenue of $5.74 billion, against forecasts of $5.42 billion. Diluted EPS came in at $2.72, up 33% year-over-year and beating expectations by 19 cents. The company lifted its EPS guidance for the full year, banking on robust demand from the U.S. government for its weapons and defense systems.
L3Harris Technologies, Inc. provides advanced national security solutions across the air, land, space, sea, and cyber domains. It operates through four segments: Communication Systems, Integrated Mission Systems, Space & Airborne Systems, and Aerojet Rocketdyne.
5. Northrop Grumman Corporation (NYSE:NOC)
Share Price Upside: 33%
Number of Hedge Fund Holders: 62
Northrop Grumman Corporation (NYSE:NOC) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. Last week, the company announced that its XRQ-73 hybrid electric uncrewed aircraft had started flight testing.
Source: Ondas Holdings Inc. Press Release
The aircraft has been designed and made to advance propulsion technologies for the Defense Advanced Research Projects Agency (DARPA)’s SHEPARD program. The flight tests are being seen as a significant milestone for lightweight, unmanned aircraft.
According to the press release, XRQ-73’s hybrid electric propulsion system will offer efficient fuel consumption and lower emissions, alongside improved operational flexibility, which will aid in the future development of new aircraft designs.
In other news, Northrop Grumman Corporation continues to remain on analysts’ radar and currently sports a Moderate Buy rating, with an average share price upside potential of 33% as of the close of business on May 8.
Recent updates include J.P. Morgan analyst Seth Seifman, who on May 6 reiterated a Hold rating on the stock with a price target of $635, according to a report on TipRanks.
Northrop Grumman Corporation is one of the world’s largest defense contractors. It is engaged in the design, development, integration, and maintenance of advanced systems across aeronautics, space, defense electronics, and mission solutions.
4. AeroVironment, Inc. (NASDAQ:AVAV)
Share Price Upside: 80%
Number of Hedge Fund Holders: 40
AeroVironment, Inc. (NASDAQ:AVAV) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. Earlier in the month, the company said it had secured a prototype agreement from the U.S. Army to build, test, and deliver the Switchblade 400 loitering munition under the Low-Altitude Stalking and Strike Ordnance (LASSO) program.
The award has enhanced Switchblade 400’s reputation as a key component of the program, supporting the Army’s modernization efforts to deploy agile weapons. It also reflects the service’s confidence in the company’s ability to scale and positions it well as a likely long-term partner for the Army.
Following the news, Clear Street analyst Brian Dobson reiterated a Buy rating on AeroVironment, Inc. on May 4, with a price target of $293. According to TipRanks, the firm noted the agreement in a research note to investors, and added that the company’s shares were ‘attractively valued’.
As of the close of business on May 8, the stock carries a Strong Buy rating based on 16 analysts’ recommendations. It has an average 1-year share price target of $302.29, representing an 80% upside.
AeroVironment, Inc. designs and manufactures unmanned aerial vehicles, ground robotic systems, and loitering munitions.
3. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Share Price Upside: 81%
Number of Hedge Fund Holders: 41
Kratos Defense & Security Solutions, Inc. is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. On May 7, RBC Capital cut its price target on the stock to $80 from $100, while maintaining an Outperform rating.
The adjustment followed the company’s first-quarter 2026 results, which reported 16% organic revenue growth to $371 million. Adjusted EBITDA margin came in at just over 10%. Adjusted EPS stood at $0.16, up 33% year-over-year.
Kratos Defense & Security Solutions, Inc. also raised its full-year guidance for 2026 to include the impact of Nomad and Orbit acquisitions. RBC Capital noted that while the increase reflected strength across the business, it was cutting the estimated EBITDA multiple for the company from 65-times to 50-times, citing continued talks about delayed contract award timings.
Following the results, Citizens also trimmed its price target on the stock to $105 from $125 and kept a Market Outperform rating, while Piper Sandler cut the price target to $75 from $99 and reiterated a Neutral rating.
As of the close of business on May 8, KTOS is a Strong Buy based on recommendations from 14 analysts and has an average share-price upside potential of 81%.
Kratos Defense & Security Solutions, Inc. is a technology company focused on the development of advanced products and systems for defense, national security, and commercial markets.
2. Red Cat Holdings, Inc. (NASDAQ:RCAT)
Share Price Upside: 103%
Number of Hedge Fund Holders: 16
Red Cat Holdings, Inc. (NASDAQ:RCAT) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. On May 7, the company reported financial results for the first quarter of 2026.
Total revenue was reported at $15.5 million, growing 849% year-over-year. Gross profit came in at $2 million, increasing $2.8 million from the same period last year. Gross margin was 12.7%, improving 199% sequentially, and up from (52.1)% in the prior year’s quarter.
Business highlights included Red Cat Holdings, Inc. receiving new orders for its Black Widow drones from allies in NATO and the Asia-Pacific, alongside a strategic agreement with Ukrainian state-owned entity Spetstechnoexport to collaborate on advanced unmanned and robotic systems.
During the quarter, the company also announced the acquisition of California-based Apium Swarm Robotics, Inc. The firm builds distributed control systems for uncrewed surface vessels and swarming drones.
Following the earnings call, Needham analyst Austin Bohlig reiterated a Buy rating on the stock on May 8, with a share price target of $20, representing 93% upside from Friday’s close.
Red Cat Holdings, Inc. provides drone and robotics solutions for defense, national security, and commercial needs.
1. Ondas Inc. (NASDAQ:ONDS)
Share Price Upside: 122%
Number of Hedge Fund Holders: 29
Ondas Inc. (NASDAQ:ONDS) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. As of the close on May 8, the stock is a Strong Buy based on recommendations from 7 analysts and has an average share-price upside potential of 122%.
Recent updates include Lake Street analyst Max Michaelis, on April 13, maintaining a Buy rating with a share price target of $19. This is a reaffirmation of the firm’s previous update in January, when it lifted the price target from $10 following the company’s OAS Virtual Investor Day, in which it shared upbeat financial targets for the future.
In other news, Ondas Inc. said on April 24 that it had completed the $175 million merger with defense prime contractor Mistral Inc. The move marks a significant step in the company’s quest to expand participation across the Department of War’s programs and is likely to contribute to revenue growth and EBITDA ahead, especially since it already has over $1 billion in programs.
Eric Brock, Chairman and CEO, further added the following on the development:
“This merger marks a significant step in positioning Ondas as a fully integrated defense prime contractor, accelerating our expansion across the U.S. defense market. Mistral brings established access to key contract vehicles, a U.S.-based manufacturing and integration footprint, and deep customer relationships across UAVs, loitering munitions, and ground robotics-directly aligned with the core segments of our platform. Together, we are strengthening our ability to deliver mission-ready systems to U.S. government customers at scale.”
Ondas Inc. provides private wireless solutions and autonomous aerial and ground robot intelligence for the defense, security, and industrial markets.
