AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. It operates through Small Unmanned Aircraft Systems (SUAS), Tactical Missile System (TMS), Medium Unmanned Aircraft Systems (MUAS), and High Altitude Pseudo-Satellite Systems (HAPS) segments. The company supplies UAS, TMS, unmanned ground vehicle, and related services primarily to organizations within the U.S. Department of Defense, other federal agencies, and to international allied governments. It also designs, engineers, tools, and manufactures unmanned aerial and aircraft systems, including airborne platforms, payloads and payload integration, ground control systems, and ground support equipment and other items and services related to unmanned aircraft systems. In addition, the company offers small UAS products, including training, spare parts, product repair, product replacement, and the customer contracted operation. Further, it develops high-altitude pseudo-satellite UAS systems. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Arlington, Virginia.

AeroVironment, Inc. демонстрирует смешанную финансовую картину. С одной стороны, компания имеет высокие показатели ликвидности, такие как текущий и быстрый коэффициенты, что указывает на её способность покрывать краткосрочные обязательства. Однако, с другой стороны, мультипликаторы, такие как P/E и P/S, значительно выше медианных значений в отрасли, что может свидетельствовать о переоцененности акций. Динамика чистой прибыли и операционной прибыли негативна, что вызывает беспокойство. Хотя выручка демонстрирует положительный тренд, снижение прибыли может указывать на проблемы с рентабельностью. Долговая нагрузка компании находится на низком уровне, что является положительным фактором, но низкие показатели ROE, ROA и ROI показывают, что эффективность использования капитала оставляет желать лучшего. В целом, учитывая высокие оценки и неустойчивую прибыльность, целесообразно пересмотреть целевую цену акций компании.

AeroVironment, Inc.

Key Points
Palantir's Gotham platform provides target identification and analysis in battlefield situations.
AeroVironment makes drones that can conduct surveillance, communications, or conduct strikes.
You can also invest in an ETF for immediate diversification.
The war in Iran is racking up some big bills for the Pentagon. The Trump administration has asked Congress for $200 billion to finance the war -- and that comes on top of the White House's earlier announcement that President Donald Trump will increase the 2027 budget request for the military from $1 trillion to $1.5 trillion.
That has triggered a lot of interest in defense contractors and other companies that operate in the area of modern warfare, including companies involved with artificial intelligence (AI) for military applications. The Spade Defense Index, which tracks publicly traded companies involved with defense and homeland security, has been a top performer in recent weeks, having jumped 11% since March 30.
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Here are three top picks for investments that you can make to capitalize on the run-up in defense spending.
Palantir Technologies
Palantir Technologies (NASDAQ: PLTR) has a long history with the U.S. military. The data analysis company was credited with providing the intelligence that led to the capture of 9/11 mastermind Osama bin Laden back in 2011, and its contracts with the Pentagon and intelligence communities has only increased.
Palantir's military product is its Gotham platform, which is designed for defense, intelligence, and other military applications. Gotham uses artificial intelligence and ingests information from thousands of data points, including global satellite imaging, to provide AI-powered target identification and analysis. Military commanders and intelligence services can use Gotham when making real-time decisions in battlefield situations.
CEO Alex Karp said in an interview with Wired in November 2025. "You need high-end satellites, you need to be able to coordinate with the satellites, and you need software and large language models. It's advantageous for America because we're very strong in those areas."
Palantir's revenue in the fourth quarter was $1.4 billion, up 70% from a year ago. Of that, U.S. government revenue was $570 million, an increase of 66% from the same period the previous year.
AeroVironment
Based in Arlington, Virginia -- conveniently close to the Pentagon -- AeroVironment (NASDAQ: AVAV) is a military contractor specializing in drones and tactical missile systems. Its products include small, unmanned aircraft and tactical missile systems.
Its most recent product, announced just this month, is the Mayhem 10, an unmanned system capable of providing surveillance, electronic warfare, communications, and precision strikes. The product has a range of about 62 miles and carries a payload of 10 pounds.
"Mayhem 10 sets a new standard for operational versatility and survivability on the modern battlefield," CEO Wahid Nawabi said.
AeroVironment has numerous military contracts, and its revenue in the third quarter of fiscal 2026 (ending Jan. 31) was $408 million, up 143% from a year ago.
Invesco Aerospace & Defense ETF
If you can't decide on a specific name, then a great option is to pick an exchange-traded fund (ETF). The Invesco Aerospace & Defense ETF (NYSEMKT: PPA) tracks the Spade Defense Index discussed earlier, mirroring its returns. With $8.3 billion in assets under management and an expense ratio of 0.58% (or $58 annually on a $10,000 investment), PPA is a convenient way to capitalize on the run-up in defense spending.
PPA is a market-cap-weighted ETF with adjustments -- it ensures that no single stock has a weighting of more than 10%. Sixty companies are represented in the ETF right now, and the top five holdings have a market weighting of 36.2%, which means you won't be overexposed to any specific name.
Company
Weighting in PPA
Year-to-Date Performance
Boeing
8.45%
4.2%
GE Aerospace
8.07%
0.7%
RTX
7.63%
8.1%
Lockheed Martin
7.15%
22.9%
Northrop Grumman
4.95%
17.2%
PPA provides investors with access to some of the biggest defense contractors who will be supporting the Pentagon in the Iran war, while offering the benefit of instant diversification.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Defense‑and‑Data Stocks at the Intersection of AI, Targeting, and Trump's Expanding Iran Defense Budget

AeroVironment, Inc. AVAV is expanding its presence beyond its core operations by building capabilities in space and directed energy technologies. As defense priorities continue shifting toward more advanced and technology-driven systems, these areas are becoming increasingly important. By moving into these segments, the company is positioning itself to address evolving mission needs while creating new opportunities for long-term growth.
A key part of this strategy is the expansion of its technology capabilities across areas such as space-based systems, advanced communications, electronic warfare tools and directed energy solutions. This broader capability base enables AeroVironment to support more complex defense programs and deliver more integrated solutions, strengthening the overall value of its portfolio while improving its ability to meet diverse customer requirements.
This expansion also opens access to opportunities tied to satellite operations, tracking and secure communications. As demand increases for reliable, connected and responsive systems, AeroVironment is better positioned to support high-priority programs. At the same time, it helps the company build a more diversified and balanced revenue base, reducing reliance on any single area of operation.
While execution remains important, AeroVironment continues aligning these capabilities with its long-term strategy. Its push into space and directed energy is helping strengthen its market position and preparing it to capture future opportunities in an evolving defense landscape.
Companies Expanding Space and Directed Energy Capabilities
The defense sector is focusing on space and directed energy as threats grow more complex and require faster detection and response. These technologies support surveillance, secure communications and precision targeting while improving efficiency and scalability. Companies like L3Harris Technologies, Inc. LHX and Northrop Grumman Corporation NOC are also advancing in this space.
L3Harris Technologies is expanding its capabilities in space systems, sensing and mission-focused technologies to support evolving defense needs.
Northrop Grumman is actively developing directed energy systems, including high-energy laser technologies, along with advanced sensing and mission solutions for modern defense applications.
Earnings Estimates for AVAV Stock
The Zacks Consensus Estimate for fiscal 2026 earnings per share suggests a year-over-year decline of 7.62%, and for fiscal 2027, estimates indicate growth of 23.34%.
Image Source: Zacks Investment Research
AVAV Stock Trading at a Discount
AeroVironment is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 4.39X compared with the industry average of 12.5X.
Image Source: Zacks Investment Research
AVAV Stock Price Performance
Over the past year, AVAV shares have climbed 32.7% compared with the industry’s 47.2% growth.
Image Source: Zacks Investment Research
AVAV’s Zacks Rank
AeroVironment currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How Is AVAV Expanding Its Space and Directed Energy Capabilities?

For Immediate Release
Chicago, IL – April 10, 2026 – Zacks Equity Research shares Cirrus Logic CRUS as the Bull of the Day and AeroVironment AVAV as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Intel Corp. INTC, Tesla, Inc. TSLA and NVIDIA Corp. NVDA.
Here is a synopsis of all five stocks:
Cirrus Logic, a Zacks Rank #1 (Strong Buy), is a fabless semiconductor supplier that develops high-precision, mixed-signal processing solutions. The company focuses on expanding markets where it can apply its processing knowledge to address challenging issues across the analog-to-digital divide.
The stock is displaying relative outperformance and has been making a series of 52-week highs. The price movement is a sign of strength as we head further into the new year. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.
Cirrus Logic is part of the Zacks Electronics – Semiconductors industry group, which currently ranks in the top 37% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months, just as it has throughout the past year:
Stocks in this group are also expected to experience above average earnings growth, signifying a powerful foundation that should lead to higher prices. Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.
Company Description
Cirrus Logic remains devoted to pursuing its three-pronged growth strategy: first, protecting its leadership in smartphone audio; second, enhancing the amount of high-performance mixed-signal (HPMS) content in smartphones; and third, exploiting its capabilities in audio and HPMS to penetrate new markets.
The company has been gaining momentum from increased smartphone demand and product diversification, with notable expansion into PCs, AI-enabled interfaces, and automotive markets. The PC market is relatively large and stable, and successful penetration there could meaningfully diversify revenue in the coming years.
Last year, Cirrus benefited from the launch of a next-generation boosted amplifier, enabling higher audio performance for mobile devices. The debut of Cirrus Logic’s first 22-nanometer smart codec improved its technological leadership. It also continues to gain momentum in the laptop market with design wins on major platforms.
Tech heavyweight Apple is working with Cirrus Logic to establish new semiconductor process technologies. Apple boasted that this collaboration will enable Cirrus to develop mixed-signal solutions for the company’s applications, including advanced integrated circuits for Face ID systems.
Earnings Trends and Future Estimates
Cirrus Logic has established an impressive reporting history, surpassing earnings estimates in each of the past four quarters. The company most recently delivered fiscal third-quarter earnings back in February of $2.97 per share, which marked a 22.7% surprise over the $2.42/share consensus estimate.
The precision audio and mixed-signal powerhouse delivered a trailing four-quarter average surprise of 31.8%. Consistently beating earnings estimates is a recipe for success.
Analysts covering CRUS are in agreement and have raised their fourth-quarter estimates by 18.12% in the past 60 days. The Zacks Consensus Estimate now stands at $1.76/share, reflecting potential growth of 5.4% relative to same period in the prior year.
Let’s Get Technical
This market leader has seen its stock advance more than 30% already this year, all while the general market has struggled. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Notice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of higher highs in 2026. With both strong fundamental and technical indicators, CRUS stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Cirrus Logic has recently witnessed positive revisions. As long as this trend remains intact (and CRUS continues to deliver earnings beats), the stock will likely continue its bullish run.
Bottom Line
Backed by a leading industry group and history of earnings beats, it’s not difficult to see why CRUS stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.
Cirrus Logic is a cash-rich company with a strong balance sheet. The company’s ability to generate solid cash flows is expected to help it sustain current share repurchases.
Recent positive earnings estimate revisions should serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put CRUS on your shortlist.
AeroVironment designs and develops a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. The company provides uncrewed aircraft systems (UAS) including drones, as well as kinesis command and control software.
The company’s counter-UAS and precision strike, a loitering munitions solution, delivers actionable intelligence including radio frequency and electronic warfare systems. AeroVironment also offers autonomy, AI, and platform technologies, as well as data transmission systems for space operations.
Key challenges remain for AeroVironment in 2026. The company faces intense competitive pressures in evolving UAS and multi-domain markets. Attracting and retaining specialized engineers remains difficult in a rapidly scaling defense-tech environment.
The company is also heavily dependent on the government for revenues, exposing it to budget cuts, priority shifts, and procurement delays. Persistent gross margin erosion in recent quarters adds to the long list of concerns.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, AeroVironment is a component of the Zacks Aerospace – Defense Equipment industry group, which currently ranks in the bottom 39% out of approximately 250 Zacks Ranked Industries. As we can see below, companies in this group remain relatively overvalued:
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
AVAV shares have widely underperformed the market this year. Elevated valuation requires flawless backlog conversion to justify investing at these levels.
History of Earnings Misses & Deteriorating Outlook
AeroVironment missed the earnings mark in three of the past four quarters. The company posted fiscal third-quarter earnings last month of 64 cents per share, missing the Zacks Consensus Estimate by 6%.
AeroVironment also missed on the top line as sales underwhelmed investors. This triggered cuts to forward guidance, contributing to fading earnings momentum and a lower Zacks Rank.
The company delivered a trailing four-quarter average earnings miss of 12%. Consistently falling short of projections is a recipe for underperformance, and AVAV is no exception.
The drone technology company has been on the receiving end of negative earnings estimate revisions as of late. Looking into the fourth quarter, analysts cut estimates by 23.5% in the past 60 days. The Zacks Consensus Estimate is now $1.53 per share, translating to a 5% decline relative to same period in the prior year.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, AVAV stock is in a sustained downtrend. Notice how the stock has been widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day (red line) moving averages – another good sign for the bears.
AVAV stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. The lack of buying pressure is a sign that this stock should be avoided. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 25% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that AVAV stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
Revenue concentration adds risk, as the loss of key agreements or less favorable terms could materially impact results. Intense competition may also restrict growth and pressure returns.
A shaky earnings history and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend. Bulls will want to steer clear of AVAV until the situation shows major signs of improvement.
Additional content:
Intel Stock Hits 5-Year High on Musk Deal – Is It Too Late to Buy?
Intel Corp.has recently staged a strong recovery from a weak phase in 2022-2024, signaling a major turnaround fueled by partnerships and restructuring efforts. Let us see how the stock is performing now, what lies ahead, and whether it's an appropriate time to buy the stock.
Intel Rides Momentum as Musk's Terafab Project Sparks Excitement
Intel stock made a huge move on Wednesday, up 11.4%, and pushed its year-to-date gains to 58.9%. In yesterday's trading session, Intel stock closed at $58.95, its highest close in nearly five years, and extended a six-day winning streak. Intel's shares have climbed an impressive 43.1% in the last six trading sessions.
So, what's behind such outsized gains? Apart from the temporary cease-fire agreement in the Middle East, optimism surrounding the company's latest partnership with Elon Musk's Terafab initiative lifted Intel's stock price.
Musk's Terafab project is one of Musk's most ambitious infrastructure ventures since Gigafactory 1. He intends to develop a $20-$25 billion semiconductor facility at Giga Texas. The planned semiconductor plant will be capable of generating around 1 terawatt of computing capacity annually and bring together Tesla, Inc., SpaceX, and xAI into a unified artificial intelligence (AI) hardware hub. Through Terafab, Musk aims to consolidate all aspects of the chip-making process, including design, fabrication, memory and packaging, in a single place.
So, what's in store for Intel? Since Terafab aims to establish large-scale production for cutting-edge AI chips, the demand for Intel's process technology is expected to increase, strengthening its foundry business. After all, Intel is one of the few companies globally that has expertise in chip fabrication, production and packaging. Also, being part of the Terafab project provides Intel with a reliable, long-term partner for its fabrication services, supporting long-term revenue growth and enhanced profitability.
Full Fab Ownership & Tactical Partnership to Propel Intel Stock Rally
No doubt, the Musk deal has lit a fire under Intel stock, but skeptics may argue that the euphoria is already priced in, leaving the stock under pressure to sustain its lofty levels. However, that isn't the case! From a technical perspective, Intel's shares are currently trading well above the long-term 200-day moving average (DMA) and the short-term 50 DMA, signaling an uptrend.
Technical Indicator & Overlays - Intel
There are also other factors driving optimism for Intel stock. The company recently bought back the 49% stake it had previously sold to Apollo Global Management in ???its Ireland manufacturing facility, Fab 34, which was originally sold to fund its manufacturing initiatives. By regaining full ownership of the plant, Intel has demonstrated its financial strength and can now retain all the revenues and margins.
The Fab 34 produces advanced chips used in data centers and AI servers, so having full control means Intel can better manage supply and capitalize on growing AI demand. The $14.2 billion repurchase also indicates a stronger balance sheet.
Nonetheless, NVIDIA Corp.'s investment in Intel has become a shot in the arm for the company to advance the development of its state-of-the-art process nodes, including the new 18A process. At the same time, CEO Lip-Bu Tan's aggressive measures to restructure the company's finances and progressive business strategy are beginning to show positive results.
Intel Stock to Buy Hand Over Fist
Intel's positive momentum appears sustainable over the long term, driven by strategic partnerships and full fab ownership, and a strengthening operational and financial outlook. The company is also showing bullish technical signals. Therefore, it's prudent for savvy investors to consider Intel stock, which currently has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
See This Stock Now for Free >>
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Cirrus Logic and AeroVironment have been highlighted as Zacks Bull and Bear of the Day

AeroVironment designs and develops a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. The company provides uncrewed aircraft systems (UAS) including drones, as well as kinesis command and control software.
The company’s counter-UAS and precision strike, a loitering munitions solution, delivers actionable intelligence including radio frequency and electronic warfare systems. AeroVironment also offers autonomy, AI, and platform technologies, as well as data transmission systems for space operations.
Key challenges remain for AeroVironment in 2026. The company faces intense competitive pressures in evolving UAS and multi-domain markets. Attracting and retaining specialized engineers remains difficult in a rapidly scaling defense-tech environment.
The company is also heavily dependent on the government for revenues, exposing it to budget cuts, priority shifts, and procurement delays. Persistent gross margin erosion in recent quarters adds to the long list of concerns.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, AeroVironment AVAV is a component of the Zacks Aerospace – Defense Equipment industry group, which currently ranks in the bottom 39% out of approximately 250 Zacks Ranked Industries. As we can see below, companies in this group remain relatively overvalued:
Image Source: Zacks Investment Research
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
AVAV shares have widely underperformed the market this year. Elevated valuation requires flawless backlog conversion to justify investing at these levels.
History of Earnings Misses & Deteriorating Outlook
AeroVironment missed the earnings mark in three of the past four quarters. The company posted fiscal third-quarter earnings last month of 64 cents per share, missing the Zacks Consensus Estimate by 6%.
AeroVironment also missed on the top line as sales underwhelmed investors. This triggered cuts to forward guidance, contributing to fading earnings momentum and a lower Zacks Rank.
The company delivered a trailing four-quarter average earnings miss of 12%. Consistently falling short of projections is a recipe for underperformance, and AVAV is no exception.
The drone technology company has been on the receiving end of negative earnings estimate revisions as of late. Looking into the fourth quarter, analysts cut estimates by 23.5% in the past 60 days. The Zacks Consensus Estimate is now $1.53 per share, translating to a 5% decline relative to same period in the prior year.
Image Source: Zacks Investment Research
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, AVAV stock is in a sustained downtrend. Notice how the stock has been widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day (red line) moving averages – another good sign for the bears.
Image Source: StockCharts
AVAV stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. The lack of buying pressure is a sign that this stock should be avoided. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 25% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that AVAV stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
Revenue concentration adds risk, as the loss of key agreements or less favorable terms could materially impact results. Intense competition may also restrict growth and pressure returns.
A shaky earnings history and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend. Bulls will want to steer clear of AVAV until the situation shows major signs of improvement.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AeroVironment, Inc. (AVAV) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Bear of the Day: AeroVironment (AVAV)

AeroVironment, Inc. AVAV is gradually expanding beyond its core unmanned systems focus by building a stronger presence in defense services. Instead of relying only on product sales, the company is putting more emphasis on engineering and mission support offerings that help customers operate and sustain complex systems. This shift allows it to stay more closely tied to defense programs over a longer period.
One important area of focus is lifecycle support. AeroVironment is involved in activities such as integration, testing, maintenance and operational assistance, ensuring its systems continue to perform as required after deployment. As defense technologies become more advanced, the need for ongoing technical support is increasing, making these services an essential part of the overall offering.
Another factor supporting this move is the company’s ability to link its products with services. By staying involved from development through deployment and maintenance, the company can play a broader role across defense programs. This not only strengthens its position with existing customers but also opens the door to more consistent, repeat business over time.
With defense agencies placing continued emphasis on system readiness and operational efficiency, demand for dependable support services is likely to remain steady. The company’s growing focus on this area reflects its effort to build a more balanced and durable business model.
Companies Broadening Defense Services Capabilities
As defense systems become more sophisticated, the need for ongoing support and technical expertise continues to rise. Companies like Leidos Holdings, Inc. LDOS and Science Applications International Corporation SAIC are also expanding their presence in this space.
Leidos supports a wide range of defense programs by offering engineering, technical and mission-focused services tailored to government needs.
Science Applications International focuses on system integration, logistics and long-term support solutions that help maintain and operate advanced defense technologies.
Earnings Estimates for AVAV Stock
The Zacks Consensus Estimate for fiscal 2026 and earnings per share suggests a year-over-year decline of 7.62%, and for fiscal 2027, it indicates growth of 23.34%, respectively.
Image Source: Zacks Investment Research
AVAV Stock Trading at a Discount
AeroVironment is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 4.36X compared with the industry average of 11.73X.
Image Source: Zacks Investment Research
AVAV Stock Price Performance
In the past year, AVAV shares have surged 55.9% compared with the industry’s 44.9% growth.
Image Source: Zacks Investment Research
AVAV’s Zacks Rank
AeroVironment currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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How Is AeroVironment Broadening Its Defense Services Presence?

Key Points
AeroVironment reported Q3 results that included an ugly surprise for investors.
The U.S. Space Force terminated the company's BADGER contract, but the company can reapply.
Shares of AeroVironment (NASDAQ: AVAV) had a tough month in March, falling as much as 27.4%, according to data supplied by S&P Global Market Intelligence.
The catalyst that sent the drone maker lower was the fallout from its weak earnings report and the loss of a key contract.
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Bad reception
For the company's fiscal 2026 third quarter (ended Jan. 31), AeroVironment reported revenue of $408 million, up 143% year over year. The acquisition of aerospace company BlueHalo accounted for much of that increase, as organic growth increased 38%.
The company's loss ballooned to $179 million, compared to a loss of $3 million in the prior-year quarter, resulting in adjusted earnings per share (EPS) of $0.64.
For context, analysts' consensus estimates were calling for revenue of $476 million and EPS of $0.68, so AeroVironment missed by a country mile.
The increased loss was primarily the result of a $151.3 million goodwill impairment charge (more on that in a minute) and a $43.9 million charge to intangible amortization and other non-cash related charges.
AeroVironment also reported bookings of $2.1 billion and had a book-to-bill ratio of 1.6 for the first nine months of fiscal 2026. Moreover, the company reported a record funded backlog of $1.1 billion.
While the results were solid, bad news lurked in the shadows. AeroVironment had a $1.7 billion contract with the U.S. Space Force to build the Broad Area Deployable Ground Terminal Enabling Resilient communications (BADGER) phased-array antenna system to support the Satellite Communication Augmentation Resource (SCAR). Management was working to renegotiate the terms of the deal to allow the company to develop a commercial market for the antenna.
After failing to reach an agreement, Space Force terminated the deal. AeroVironment is working to recompete and plans to submit a proposed solution under the new, revised requirements. Management believes the company has developed "an innovative and compelling solution that is unmatched in the industry," which will lead to a "more flexible and profitable business," but only if it can be sold commercially as well. This was the catalyst for the $151 million writedown.
This led management to lower its full-year guidance. AeroVironment now expects revenue in a range of $1.85 billion to $1.95 billion, down from a range of $1.95 billion to $2 billion, primarily driven by the loss of the Space Force contract.
Wall Street responded in predictable fashion, with at least nine analysts lowering their price targets on AeroVironment stock.
Management continues to focus on the long term, and its willingness to experience some short-term pain for long-term gain is commendable. CEO Wahid Nawabi pointed to the transition of several programs to commercial product offerings, including the BADGER antenna array and the Laser Oriented Counter UAS System (LOCUST) mobile high-energy laser. By focusing on military solutions with commercial applications, the company is building a robust and resilient business.
AeroVironment has never been cheap, but with the stock trading 55% off its peak, it's worth a look.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why AeroVironment Stock Crashed 27% in March

Is Stagflation Creeping Into the Picture?

AeroVironment, Inc. AVAV is working to expand its revenue potential by strengthening its portfolio of tactical uncrewed aircraft systems (“UAS”), which are used for intelligence, surveillance and reconnaissance missions. These systems play an important role in modern defense operations, as military forces increasingly rely on real-time data to support decision-making in the field. With continued defense spending and changing battlefield requirements, demand for such technologies remains steady.
A major contributor to growth is AVAV’s focus on lightweight and portable UAS platforms that can be deployed quickly in different operational settings. These systems are designed to be easy to operate, allowing troops to carry out missions without complex setup or extensive training. Their ability to function across various mission types, including reconnaissance and situational monitoring, helps expand the company’s market reach.
AeroVironment is also seeing benefits from ongoing product upgrades and repeat demand from existing customers. Improvements in areas such as sensor quality, communication systems and software performance are encouraging users to upgrade their current platforms. This not only supports new sales but also creates opportunities for follow-on orders, maintenance and related services.
As global defense forces increase their reliance on unmanned systems for real-time intelligence, demand for tactical UAS is expected to rise. AeroVironment’s focus on expanding and upgrading its UAS portfolio positions it to capture growing opportunities and strengthen its long-term revenue outlook.
Rising UAS Adoption Supports Revenue Opportunities
Rising demand for real-time battlefield intelligence is boosting the adoption of tactical unmanned systems across defense forces, improving situational awareness and mission efficiency. Demand for reliable UAS solutions remains strong, with other companies benefiting from this trend, as discussed below.
Kratos Defense & Security Solutions, Inc. KTOS develops UAS and autonomous platforms used in defense, surveillance and training missions, supporting modern military operations with flexible and scalable solutions.
L3Harris Technologies, Inc. LHX provides advanced intelligence, surveillance, and reconnaissance systems, sensors and communication technologies that enhance unmanned operations and support real-time defense intelligence and mission coordination.
Earnings Estimates for AVAV Stock
The Zacks Consensus Estimate for fiscal 2026 and fiscal 2027 earnings per share suggests a year-over-year decline of 7.62% and growth of 23.34%, respectively.
Image Source: Zacks Investment Research
AVAV Stock Trading at a Discount
AeroVironment is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 4.54X compared with the industry average of 12X.
Image Source: Zacks Investment Research
AVAV Stock Price Performance
In the past year, AVAV shares have surged 56.6% compared with the industry’s 30.3% growth.
Image Source: Zacks Investment Research
AVAV’s Zacks Rank
AeroVironment currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Can AeroVironment's Tactical UAS Portfolio Drive Revenue Growth?

Key Points
Red Cat beat on sales but missed on earnings last night.
Red Cat is winning contracts, growing production -- and losing a lot of money.
Red Cat Holdings (NASDAQ: RCAT) stock crashed 17.8% through 10:40 a.m. ET Thursday after reporting mixed earnings last night.
Analysts expected the company, which makes military drones, to lose $0.14 per share in Q4. Sales were supposed to be $20.9 million, and Red Cat shredded the sales forecast with revenue of $26.2 million. But its quarterly loss topped $0.17 per share -- three cents worse than forecast.
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Red Cat Q4 earnings
The news wasn't all bad. Starting with the sales beat, Red Cat grew quarterly sales nearly 2,000% year over year, and wrapped up its fiscal 2025 with 160% sales growth. It cut its quarterly loss in half and slimmed its year-end losses as well. Still, it's costing Red Cat nearly as much to build its drones as it's able to sell them for.
2025 revenue was $40.7 million. 2025 cost of goods sold was $39.4 million.
So the company did earn gross profits. But after deducting operating expenses (research and development and selling, general, and administrative expenses, for example), the company ended with a $0.73 per share loss for the year.
What's next for Red Cat stock?
As the company heads into 2026, Red Cat CEO Jeff Thompson is optimistic that the sales growth, at least, will continue. The company has "strong momentum" and is winning contracts -- Black Widow drones for at least two customers in Asia were cited. It's partnering with rival AeroVironment (NASDAQ: AVAV) so that their respective drone products can operate together within a given military system.
And Red Cat is expanding production to support its growing sales, increasing total production space to 254,000 sq. ft. We just don't know yet at what point production scale will allow Red Cat to pivot from losing money... to earning profit.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Red Cat Stock Got Declawed Today

Key Points
Both AeroVironment and Kratos Defense & Security Systems have been growing their businesses through acquisitions.
AeroVironment's shares are up by more than 68% over the past year.
Kratos' shares have climbed by 200% in the past 12 months.
Defense stocks are in demand again, thanks to the Iran war and the war in Ukraine. While the S&P 500 is down around 1% so far this year, the iShares U.S. Aerospace & Defense ETF is up more than 11%.
There are obvious ways to benefit from this trend, such as investing in large-cap defense stocks such as L3Harris, Northrop Grumman, and Lockheed Martin. However, those giants are relatively stable, so their growth is less likely to escalate quickly.
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However, under-the-radar defense stocks such as AeroVironment (NASDAQ: AVAV) and Kratos Defense & Security Solutions (NASDAQ: KTOS) could deliver better returns because they have higher growth profiles.
AeroVironment's growth is on autopilot
AeroVironment makes small- and medium-sized drones, space-based platforms, directed energy systems, and cyberwarfare and electronic warfare products. Its drones have been battle-tested in Ukraine, and the conflict in Iran will no doubt lead to a call for more drone manufacturing by the U.S. and its allies.
The defense company's shares, while up more than 68% over the past year, are down more than 14% so far in 2026. The impetus for that decline was the company's fiscal 2026 third-quarter earnings report, which disappointed investors.
In the quarter, which ended Jan. 31, AeroVironment lost $0.06 per share, compared to its earnings per share (EPS) of $0.16 in the prior-year period. However, revenue climbed 143% to $4.08 million. That rise was mainly due to its purchase of BlueHalo in May, which helped establish its market presence in larger drones, space technology, and autonomous underwater vehicles. AeroVironment also has a funded backlog of $1.1 billion.
The reason management gave for the bottom-line issues was that it received fewer orders from the U.S. Space Force, particularly from its Satellite Communications Augmentation Resource (SCAR) program. BlueHalo provides antennas for the SCAR program. On the other side, the Defense Department is ramping up orders for the company's drones.
This year, the company is forecasting revenue between $1.85 billion and $1.95 billion, up from just $820.6 million last year, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $265 million to $285 million, which would be an increase of 14.5% at the midpoint.
Kratos is there to help the U.S. reload
Kratos Defense & Security Solutions' shares are up more than 15% so far in 2026 and more than 200% over the past year. The San Diego-based company focuses on affordable, rapidly developed military technology, including drones, unmanned systems, satellite and space communications, radar and missile guidance, and missiles.
In 2025, the company reported revenue of $1.35 billion, up 18.5%. In 2026, it is predicting sales of $1.59 billion to $1.67 billion, a 21.4% jump at the midpoint. EPS in 2025 rose 18% to $0.13. That type of growth is what makes the stock so attractive in the long term.
Kratos is in the process of buying Israeli satellite mobile systems company Orbit Technologies for $356.3 million, with the deal expected to close at the end of March. It also just received a $7 million production contract award from an unnamed customer to make a counter-UAS system -- essentially an anti-drone shield that stops threats before they reach their targets.
Great long-term prospects for both companies
It's important to note that, even as comparatively under-the-radar defense stocks, both of these companies have relatively high valuations. However, given their ability to quickly respond to U.S. defense needs, both are likely to see double-digit percentage revenue growth over the next few years.
Because they are relatively small companies, their stocks are likely to experience more volatility, but their willingness to expand through acquisitions and their sales of high-margin technology speak well for their long-term prospects.
Should you buy stock in Kratos Defense & Security Solutions right now?
Before you buy stock in Kratos Defense & Security Solutions, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kratos Defense & Security Solutions wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $514,000!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,029!*
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James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment, Kratos Defense & Security Solutions, and L3Harris Technologies. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

AeroVironment, Inc.

Market sentiment

Overall assessment

Share of longs and shorts

Long

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