In the Drone Zone

AeroVironment $AVAV ( ▲ 7.84% ) just earned an Overweight rating from JPMorgan $JPM ( ▲ 1.51% ).

Analyst Seth Seifman initiated coverage with a $320 price target, implying roughly 22% upside from current levels. He believes the company is well-positioned for mid-teens growth.

The driver: exposure to fast-growing defense categories, including drones, counter-drone systems, and space.

Seifman highlighted AeroVironment’s leadership in drone and counter-drone technology, noting rising demand both domestically and internationally.

The company’s acquisition of BlueHalo added critical space and directed energy capabilities. JPMorgan expects mid-teen growth from that segment alone.

International sales represented 24% of first-half fiscal 2026 revenue, and Seifman sees room for expansion as geopolitical tensions rise and global defense budgets increase.

JPMorgan argues AeroVironment’s operating model aligns well with Department of Defense efforts to buy more products along commercial lines and expand the industrial base.

Seifman expects profitability to improve as DoD demand increases. He also applies a valuation premium to the stock, citing higher defense budgets, international growth, and heightened geopolitical risk.

Shares have already climbed 69% over the past 12 months. Wall Street remains broadly bullish, with 16 of 17 analysts rating the stock a Buy or Strong Buy.

As drone warfare and counter-drone systems become more central to modern conflict, AeroVironment may be flying in the right formation.