We recently compiled a list of the Jim Cramer and Analysts Like These 10 Stocks. In this article, we are going to take a look at where AeroVironment, Inc. (NASDAQ:AVAV) stands against the other stocks.
Jim Cramer, the host of Mad Money, recently shared important lessons from his four decades of experience in the world of investing in an episode on March 3. In a discussion about typical market pullbacks, he explained the various reasons why stock prices can decline.
“How about the garden variety pullbacks we experience all the time? What causes these declines? Well, there are usually a bunch of different varieties. First, you’ve got the sell-offs caused by the Federal Reserve.”
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Cramer said that the Fed is often the focal point of financial discussions, and for good reason. When the economy slows down, the Fed steps in with the goal of stimulating growth. However, Cramer noted that when the Fed tightens its policy, it is common for market predictions to become more dramatic, with some people warning of an impending market crash or severe downturn.
Yet, Cramer cautioned that investors should not panic when hearing such predictions. Fed rate hikes, while impactful, do not always lead to a market crash. In fact, he pointed out that there have been times when these hikes had minimal effect on stock prices. That being said, Cramer acknowledged that there are legitimate reasons for stock market declines when the Fed raises rates. One important factor is the competition for investor capital. He said that stocks are just one asset among many. He added:
“For instance, there’s gold. There’s real estate. Of course, the bonds. I like gold as a safe haven. I believe that every person should hold some gold… Real estate, actual real estate can be a good hedge, but most people don’t have the money to invest in that kind of real estate that big institutions can buy… Finally, we have bonds as an investment alternative and bonds are the source of the problem when the Fed tightens.”
Our Methodology
For this article, we compiled a list of 85 stocks that Cramer was bullish on that he shared during episodes of Mad Money aired in January 2025. We narrowed the list to 10 stocks that were the most favored by analysts. We listed the stocks in ascending order of their average analyst price target upside, as of March 4. We also mentioned the hedge fund sentiment around each stock, which was taken from Insider Monkey’s Q4 database of over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A rocket on its way to the sky, representing the power of the company’s unmanned aircraft systems.
AeroVironment, Inc. (NASDAQ:AVAV)
Average Price Target Upside: 56.80%
Number of Hedge Fund Holders: 24
AeroVironment, Inc. (NASDAQ:AVAV) was mentioned during an episode aired on January 31 and Cramer commented:
“Oh boy, I really like it. It really is the solution, I think, in a lot of ways to a Pentagon budget that may be too bloated but needs to be more effective. I like AVAV and I gotta tell you, Wahid Nawabi, he’s been on the show and every time he’s been a star.”
AeroVironment (NASDAQ:AVAV) creates, engineers, and provides support for various robotic systems and services, such as uncrewed aircraft, ground-based robots, and loitering munitions, with a primary focus on government and allied government clients. The company announced its financial results for the third quarter of fiscal 2025 on March 4.
AeroVironment (NASDAQ:AVAV) reported a revenue of $167.6 million for the third quarter of fiscal 2025, a 10% decrease from $186.6 million in the same period of fiscal 2024. The decline was mainly due to lower product sales and service revenue. The company’s gross margin also fell by 6%, reaching $63.2 million, driven by a decrease in service gross margin.
Overall AVAV ranks 2nd on our list of the stocks Jim Cramer and analysts like. While we acknowledge the potential of AVAV as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AVAV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.