As global tensions rise and battlefields go unmanned, defense tech is the new arms race. Drones are now mission-critical — not just in warfare, but in industries chasing speed, precision, and efficiency. The commercial drone market spans logistics, agriculture, oil, gas, and infrastructure, and is expected to reach a value of $355.55 billion by 2032. Now, with new executive orders signed by President Donald Trump to boost U.S. drone production and airspace security, the stage is set for a domestic surge.
AeroVironment (AVAV) is riding the wave with precision. Known for its lethal-yet-lightweight drones like the Switchblade and Puma systems, the defense tech company has become an essential kit for modern militaries navigating volatile flashpoints. These battlefield-tested platforms have already proved their mettle in Ukraine, where low-cost drone warfare is reshaping military strategy.
That real-world validation has analysts bullish. Goldman Sachs analyst Anthony Valentini just initiated coverage on AVAV stock with a Street-high $301 price target. After a blazing rally amid stellar Q4 earnings and guidance, can AVAV soar even higher and hit Goldman Sachs’ bullseye?
Founded in 1971 with roots in human-powered and solar aircraft, AeroVironment has transformed into a powerhouse in unmanned aerial systems and next-gen defense tech. The company is now best-known for its battlefield-ready drones, which have become staples in modern military operations. As the world shifts toward automated warfare and drone-led intelligence, AeroVironment flies at the heart of it all.
Wall Street has taken notice. With a market capitalization nearing $7 billion, AVAV stock has surged 60% year-to-date (YTD). Its recent run is even more stunning, up more than 128% in the past three months and 32% in just the past month as investors race to price in its strategic relevance in a rapidly evolving global defense landscape.
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AeroVironment delivered stellar fiscal Q4 results on June 24, reinforcing why the bulls are locked in. The company posted a 40% year-over-year (YOY) revenue surge to $275.1 million, crushing expectations. Earnings almost quadrupled to $1.61 per share from last year’s $0.43 per-share profit, far ahead of the $1.44 consensus. The rally was not carried by one wing, either. Loitering Munitions segment revenue soared 87% during the quarter, MacCready Works revenue rose 24%, and Uncrewed Systems revenue advanced 9%.
Momentum didn’t stop at the quarter’s close. Fiscal 2025 closed with record bookings of $1.2 billion and an order backlog of $726.6 million, up a massive 81.6% YOY, signaling deep demand and high visibility. Despite a modest $1.3 million operating cash outflow, the company’s financials remain combat-ready, with $40.9 million in cash and long-term debt capped at just $30 million. From battlefield dominance to balance sheet discipline, the defense tech company is proving it can lead both in the air and on the books.
But it was the forward view that turned heads. AeroVironment’s fiscal 2026 guidance calls for revenue between $1.9 billion and $2 billion, with EPS between $2.80 and $3.00, driven in part by its BlueHalo acquisition. With geopolitical tensions rising and the U.S. entering a new phase of defense modernization, AeroVironment is not only participating in the shift but helping lead the charge.
Meanwhile, analysts tracking the company anticipate fiscal 2026 EPS to dip 10.7% YOY to $2.93, before surging 44% to $4.23 in fiscal 2027.
Brokerage firms responded quickly after the Q4 report. William Blair kept its “Outperform” rating on AVAV stock, citing reduced Ukraine risk and strong growth visibility. Raymond James bumped its price target to $225, citing a robust fiscal 2025 finish and the BlueHalo acquisition’s strategic edge. Stifel echoed the optimism, reaffirming a “Buy” rating.
BTIG made a splash among analysts, raising its target to $300, betting on drone warfare’s rising relevance. But it was Goldman Sachs that delivered the boldest vote of confidence, initiating coverage with a “Buy” rating and $301 target. Goldman Sachs is not just chasing short-term momentum — it’s betting big on AVAV’s staying power.
Goldman Sachs views the war in Ukraine as a turning point, with AeroVironment’s Switchblade and Puma systems becoming real-world proof that low-cost, high-impact tech can shift military doctrine. With the U.S. Department of Defense ramping up contracts and allies boosting their budgets, Goldman expects AeroVironment to ride operating leverage into “higher profitability and cash generation.”
Analysts have deemed AVAV stock to be a “Strong Buy” overall. Out of eight analysts covering the stock, seven recommend a “Strong Buy” while one offers a “Moderate Buy” rating.
The mean target price has already been surpassed, a testament to AVAV stock’s recent rally. However, Goldman Sachs’ Street-high target of $301 suggests that shares can rise 22% from current levels.
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On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
