Red Cat is poised to notch considerable growth as it expands its defense technology offerings, especially since domestic and international military spending is on the rise. The investment firm initiated a buy rating on Red Cat with a price target of $17 per share, implying roughly 32% upside from Friday’s close of $12.89. “We believe the unmanned aerial systems (UAS) industry is entering a multi-year supercycle, and view Red Cat uniquely positioned to capture accelerating demand for defense-grade small ISR drones,” Needham analyst Austin Bohlig said Friday in a note to clients. RCAT 1Y mountain RCAT 1-yr chart The drone technology company is likely to grow due to its expansion into unmanned surface vehicles — a market that is projected to be worth $2.5 billion by 2034, according to research firm GlobalData . Red Cat’s contract with the U.S. Army’s Short Range Reconnaissance Tranche 2 (SRR2) program will support its growth as it could ramp into a $200 million opportunity over the next two years, according to Needham. The firm also sees the acceleration in domestic and international defense spending as a multiyear tailwind for Red Cat. Needham’s call aligns with other analysts’ stock ratings for Red Cat. All three Wall Street shops that cover the company have a buy or strong buy rating on shares, LSEG data shows. Red Cat shares rose almost 12% on Friday. The stock has rallied about 292% over the past year. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
This drone stock is a buy and has major upside potential, Needham says