Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is among the 8 Best Drone Stocks to Buy for the Next 3 Years. On March 3, the defense company announced it had secured a $7 million production contract for a counter-unmanned aerial system to identify, track, and classify aerial threats.

Pixabay/Public Domain

While no further details were provided in the press release for security considerations, Kratos said this was part of a long-term contract for counter-unmanned aerial system production. Work on the project will be performed in an unnamed secured manufacturing facility of the company.

In other news, Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) continues to remain on analysts’ radar and sports a Strong Buy rating. As of the close of business on March 13, it has an average upside potential of 34% in its share price.

On Friday, Canaccord Genuity maintained a Buy rating on the stock with a price target of $125, reaffirming its earlier revision on February 24, when it lifted the price target from $120 after the company beat estimates for Q4 and provided upbeat guidance for fiscal 2026.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable products and platforms to meet national security needs.

While we acknowledge the potential of KTOS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 40 Most Popular Stocks Among Hedge Funds Heading Into 2026 and 10 Best Aerospace Dividend Stocks to Buy

Disclosure: None. Follow Insider Monkey on Google News.