AeroVironment (AVAV) Rides Drone Boom Amid Shifting Defense Priorities

AeroVironment, Inc. (NASDAQ:AVAV) is one of the best military tech stocks to buy now. On July 17, RBC Capital raised its price target on AeroVironment, Inc. (NASDAQ:AVAV) to $300 from $275, maintaining an Outperform rating following meetings with company leadership. At the current share price of $267.92, the new target implies an upside of approximately 12%.

A rocket on its way to the sky, representing the power of the company’s unmanned aircraft systems.

According to a research note, RBC came away optimistic after investor discussions with AeroVironment’s management team. The firm highlighted growing confidence in the company’s top-line outlook, pointing to signs of a broader shift in the defense market that could benefit drone and missile system manufacturers.

AeroVironment management emphasized that the defense sector is experiencing a positive inflection point, with increased funding and interest in unmanned systems across the U.S. and allied nations. Notably, the loitering munition segment, often referred to as “kamikaze drones”,  continues to attract attention, even as more competitors enter the space. Management believes the total addressable market is expanding fast enough to support multiple suppliers. AeroVironment has seen growing demand for its tactical drone platforms, especially in regions facing heightened conflict or preparing for asymmetric warfare. Its flexible systems are valued for their ease of deployment and precision strike capabilities.

AeroVironment develops tactical drones and precision munitions used in frontline military operations and battlefield intelligence.

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Disclosure: None.