Needham analyst Austin Bohlig initiated coverage on AeroVironment, Inc (NASDAQ:AVAV) with a Buy rating and a price target of $300.

The analyst noted that the U.S. unmanned aerial systems market is entering a long growth cycle as defense priorities shift toward autonomous platforms.

With the BlueHalo acquisition, the company has become a next-gen defense prime positioned in fast-growing warfare technologies.

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Bohlig added that the strengthened portfolio aligns with record global defense spending, including the Trump administration's $15 billion-plus focus on unmanned systems.

Per the analyst, expanding market size, rising share, and added capacity place AeroVironment for industry-leading growth.

The firm, already strong in small reconnaissance UAS and loitering munitions, now sees its market opportunity expand nearly fivefold to $50 billion.

Bohlig said AeroVironment’s growth is set to accelerate as it continues gaining market share from legacy primes.

The analyst noted the company’s U.S. Department of Defense UAS contract share rose from about 2% ($198 million) in 2015–2019 to nearly 7% ($593 million) in 2020–2025, showing the firm's expanding role in defense procurement.

Bohlig added that AeroVironment’s $1.7 billion capital raise will largely fund capacity expansion but could also support strategic acquisitions in emerging defense tech.

He believes AeroVironment’s larger addressable market, share gains and differentiated next-gen portfolio, along with stronger margins and cash flow, provide room for further multiple expansion.

AVAV Price Action: AeroVironment shares are trading lower by 4.50% to $236 at publication on Tuesday.

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