Needham Analyst Initiates Buy Ratings on AeroVironment, Ondas, Unusual Machines Amidst "Generational Investment Cycle"

Needham analyst Austin Bohlig initiated coverage on three unmanned aerial systems (UAS) companies, AeroVironment (AVAV), Ondas Holdings (ONDS), and Unusual Machines (UMAC), with Buy ratings. Bohlig sees a generational investment cycle in UAS companies, highlighting opportunities in the growing market.

Needham analyst Austin Bohlig has initiated coverage on three unmanned aerial systems (UAS) companies—AeroVironment (NASDAQ:AVAV), Ondas Holdings (ONDS), and Unusual Machines (UMAC)—with Buy ratings. Bohlig sees a generational investment cycle in UAS companies, highlighting significant opportunities in the growing market [1].

AeroVironment (AVAV)
Bohlig sees AeroVironment as entering a multi-year supercycle driven by a generational shift in defense priorities toward autonomous unmanned platforms. The company has evolved into a leading next-generation defense prime following its acquisition of BlueHalo. Bohlig estimates AeroVironment's total addressable market has expanded nearly fivefold to $50 billion, with further upside potential for multiple expansion due to market share gains and margin improvement [1].

Ondas Holdings (ONDS)
Ondas Holdings is positioned as one of the best-positioned U.S.-based pure-play drone companies to capture accelerating demand for autonomous offensive and defensive platforms. The company's AI-enabled Optimus drone-in-a-box and Iron Drone counter-UAS interceptor are key solutions for defense, homeland security, and infrastructure markets. Recent U.S. executive orders mandating faster drone rulemaking and prioritizing domestic procurement represent a major catalyst for Ondas. Needham has placed Ondas on its Conviction List and expects orders as soon as the fourth quarter of 2025 [1].

Unusual Machines (UMAC)
Unusual Machines is seen as one of the best-positioned domestic suppliers of flight-critical NDAA compliant components to capitalize on the reshoring trend. Bohlig expects the company to benefit from massive low-cost drone procurements under new fast-track programs. The analyst forecasts revenue growth from $5 million in 2024 to $25 million in 2026, supported by U.S. defense demand and commercial adoption. Additionally, the company's political ties, with Donald Trump Jr. joining its advisory board, could bolster its access to contracts [1].

Global Defense Market Transformation
Bohlig underscores that the global defense market is undergoing a historic transformation. The Pentagon's record ~$15B+ investment in offensive and defensive unmanned systems, more than tripling FY25 levels, highlights the growing importance of UAS in modern warfare. Policy support and reshoring are powerful growth drivers for drone manufacturers and suppliers, who could see industry-leading growth as Western governments invest in autonomous systems and supply chain independence [1].

Price Targets
Needham has set a $300 price target on AeroVironment (AVAV), $5 on Ondas Holdings (ONDS), and $15 on Unusual Machines (UMAC), citing rapid adoption of unmanned systems, expanding total addressable markets, and supportive U.S. policy [1].

References
[1] https://seekingalpha.com/news/4486981-aerovironment-ondas-unusal-machines-rated-buy-at-needham