Defense Stocks Rise After U.S.-Israeli Strikes on Iran
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 02 2026
0mins
Should l Buy AVAV?
Source: CNBC
- Defense Stocks Surge: Following the joint U.S.-Israeli attack on Iran, defense stocks collectively rose, with Lockheed Martin shares gaining 6%, Northrop Grumman up 5%, and drone manufacturer AeroVironment soaring over 10%, indicating strong market optimism regarding defense spending.
- Oil Prices Spike: The escalation of conflict has led to a significant rise in oil prices, with Brent crude hitting a 52-week high of over $78 on Monday, causing Exxon Mobil and Chevron shares to rise about 4% and ConocoPhillips to gain over 5%, reflecting market concerns over potential disruptions to global crude production and transport.
- Tankers Stocks Perform Well: In response to the military strikes in the Middle East, tanker stocks surged, with Frontline rising over 5%, DHT Holdings up 7%, and International Seaways increasing by 6%, showcasing heightened expectations for tanker transportation demand.
- Travel Stocks Decline: The conflict has caused oil prices to surge, disrupting global travel, leading to declines in travel stocks, with Expedia and Booking Holdings down 3.2% and 2.7%, respectively, Delta Air Lines falling 5.7%, and American Airlines and United Airlines dropping at least 6%, reflecting a pessimistic outlook for the travel industry.
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Analyst Views on AVAV
Wall Street analysts forecast AVAV stock price to rise
13 Analyst Rating
13 Buy
0 Hold
0 Sell
Strong Buy
Current: 229.800
Low
315.00
Averages
390.75
High
450.00
Current: 229.800
Low
315.00
Averages
390.75
High
450.00
About AVAV
AeroVironment, Inc. is a defense technology provider delivering integrated capabilities across air, land, sea, space, and cyber. The Company develops and deploys autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities. The Company’s segments include Autonomous Systems (AxS) and Space, Cyber, and Directed Energy (SCDE). The AxS segment focuses on the design, development, production, delivery, and support of intelligent, multi-domain robotic systems, including uncrewed aircraft systems (UAS) and ground robot systems. It includes the Company’s former Uncrewed Systems, Loitering Munitions Systems, and MacCready Works segments as well as Radio Frequency and Kinetic Counter-UAS Electronic Warfare Systems and others. The SCDE segment focuses on advanced technologies in the space domain providing space-based and ground-based platforms, cyber capabilities, and directed energy systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Performance Expectations Analysis: Over the past two years, AVAV has beaten EPS estimates 50% of the time and revenue estimates 88% of the time, although recent downward revisions of EPS estimates by 10 times suggest a cautious market outlook on the company's future performance.
- Revenue Estimate Changes: While there has been one upward revision in revenue estimates, there have also been 12 downward revisions, reflecting analysts' concerns about the company's revenue growth potential, which may impact investor confidence.
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- Performance Expectations Analysis: Over the past two years, AVAV has beaten EPS estimates 50% of the time and revenue estimates 88% of the time, although recent downward revisions of EPS estimates by 10 times suggest a cautious market outlook on the company's future performance.
- Revenue Estimate Changes: While there has been one upward revision in revenue estimates, there have also been 12 downward revisions, reflecting analysts' concerns about the company's revenue growth potential, which may impact investor confidence.
- Military Contract Approval: AeroVironment recently secured a $97.4 million contract from the U.S. Army to advance next-gen sensor testing, which not only strengthens the company's order book but also potentially provides funding for future technological advancements.
See More
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- Oracle Cloud Infrastructure: Oracle Cloud Infrastructure (OCI) saw a 68% surge last quarter, and investors are keen to see if its massive $523 billion contract backlog is beginning to translate into realized revenue, particularly as capital expenditures soar.
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- Conflict Dynamics: The conflict with Iran is characterized as an uneven fight, highlighting the challenges faced by the American military.
- Drone Threat: Iran's use of drones presents a significant and complex problem for U.S. military operations.
See More
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- Oil Price Surge Impacts Markets: The WTI crude oil price surged over 9% due to escalating tensions in the Middle East, temporarily exceeding $100 per barrel, leading to a 0.7% drop in the S&P 500 and a 1.0% decline in the Dow Jones, reflecting market concerns over inflation and economic slowdown.
- Weak Economic Data: The US economy reported a loss of 92,000 jobs in February, with the unemployment rate unexpectedly rising by 0.1% to 4.4%, alongside a 0.2% month-over-month decline in January retail sales, intensifying market fears of an economic slowdown and further pressuring stock performance.
- Positive Earnings Outlook: Despite the overall market decline, over 95% of S&P 500 companies have reported earnings, with 74% exceeding expectations, and Q4 earnings growth is projected at 8.4%, indicating strong corporate fundamentals that may provide support for future market performance.
- Airline Stocks Hit Hard: With soaring oil prices, airline stocks such as United Airlines, American Airlines, and Alaska Air fell over 4%, highlighting the direct impact of high oil prices on airline profitability, which could lead to a decline in overall industry earnings.
See More
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- Oil Price Surge Impacts Markets: Crude oil prices rose over 9% due to escalating tensions in the Middle East, briefly surpassing $100 per barrel, leading to a 0.9% drop in the S&P 500 and a 1.2% decline in the Dow Jones, reflecting market concerns over inflation and economic slowdown.
- Weak Economic Data: The U.S. economy saw a loss of 92,000 jobs in February, with the unemployment rate unexpectedly rising by 0.1% to 4.4%, and January retail sales falling by 0.2% month-over-month, intensifying investor worries about the economic outlook and further pressuring stock performance.
- Strong Earnings Reports: Despite the overall market decline, over 74% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, indicating robust corporate fundamentals that may support future market rebounds.
- Airline Stocks Hit Hard: The surge in oil prices has pressured airline profits, with United Airlines Holdings down over 6%, and American Airlines Group and Alaska Air Group both falling more than 5%, highlighting the negative impact of high oil prices on the airline industry.
See More
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- Reverse Merger Plan: Powerus is merging with a publicly traded golf course holding company, with plans to trade on the Nasdaq in the coming months, marking its formal entry into the capital markets and enhancing its financial strength to support expansion plans.
- Acquisition Strategy: The company plans to acquire Ukrainian drone technology to sell to the U.S. military, demonstrating its strategic positioning in the military drone sector aimed at enhancing product competitiveness and meeting rising defense needs.
- Manufacturing Expansion: Powerus is expanding U.S.-based manufacturing and strategic partnerships to increase production capacity and supply chain resilience, which not only helps meet market demand but also strengthens the company's competitive position in the global drone market.
See More
