We came across a bullish thesis on AeroVironment, Inc. (NASDAQ:AVAV) on Substack by Stock Picker’s Corner. In this article, we will summarize the bulls’ thesis on AVAV. AeroVironment, Inc. (NASDAQ:AVAV)’s share was trading at $161.01 as of Jan 3rd. AVAV’s trailing and forward P/E were 94.71 and 38.46 respectively according to Yahoo Finance.
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As drones increasingly become a central element of modern military operations, their strategic significance is underscored by numerous global events. The growing reliance on unmanned aerial vehicles (UAVs) is evident in the rising number of drone sightings over U.S. military bases and their active deployment in conflicts, such as Ukraine’s use of UAVs to target Russian missile sites and Hamas’ use of drones in its attacks on Israel. Additionally, NATO officials at the Munich Security Conference have identified drones as a major security threat due to their effectiveness in circumventing conventional defenses. AeroVironment Inc. (NASDAQ:AVAV), a leading provider of UAVs, stands to benefit as countries ramp up their drone capabilities to counter these emerging threats. The U.S. military is particularly focused on developing and integrating advanced drone technologies, including jet drones and “loyal wingmen” that support combat aircraft, which is expected to drive increased demand for AVAV’s products. As nations invest in enhancing their aerial defense capabilities, the need for innovative and agile drone solutions becomes more pronounced, positioning AVAV to capitalize on the growing market for UAVs. This shift in global defense strategies and increasing geopolitical tensions make AVAV an attractive investment opportunity.
AeroVironment, Inc. (NASDAQ:AVAV) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held AVAV at the end of the third quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of AVAV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AVAV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.