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AeroVironment, Inc. (NASDAQ:AVAV) is among the 8 Best Mid Cap Defense Stocks to Buy based on hedge fund sentiment. According to Insider Monkey's database for Q1 2026, 37 hedge funds held a stake in the company.

On June 23, BTIG analyst Andre Madrid slashed the price target on the stock to $205 from $330, while maintaining a Buy rating.

The firm noted several reasons for the adjustment, including the Space Force's termination of the contract covering the Satellite Communications Augmentation Resource (SCAR) program, a reduction in new contract awards, and lower margins for its Space, Cyber, and Directed Energy business.

Despite BTIG's price target reduction, the overall sentiment around the stock remains bullish. As of the close of business on June 24, Wall Street has a Strong Buy rating on AeroVironment, Inc. (NASDAQ:AVAV) with an average share price upside potential of 75%.

In other news, earlier this month, the global defense technology leader signed an MOU with Taiwan-based Ubiqconn Technology Inc. to collaborate on developing a common controller ecosystem to support the modernization of the country's defense systems and indigenous unmanned aircraft systems program.

AeroVironment, Inc. (NASDAQ:AVAV) designs and manufactures unmanned aerial vehicles, ground robotic systems, and loitering munitions.

While we acknowledge the potential of AVAV 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.

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