Drone Stock Flying High After Top-Line Beat

AeroVironment, Inc. (NASDAQ:AVAV) is one of the best stocks on the Nasdaq today, last seen up 27% to trade at $244.55. The drone marker and defense company reported fourth-quarter adjusted earnings of $1.61 per share on $275 in revenue, both of which topped analyst estimates. In response, Raymond James and RBC hiked their price targets to $225 and $200, respectively. 

AVAV is on track for its best single-session gain since March 2024, and earlier hit a record high of $250, toppling November's peak of $236.60. The shares are now up 56% in 2025 and 139% off their April 7, 19-month bottom of $102.25. 

A short squeeze could keep the wind at the stock's back. Short interest increased by nearly 20% in the most recent reporting period, and the 3.91 million shares sold short account for 10.1% of the equity's total available float. At AVAV's average pace of trading, it would take shorts more than eight trading days to buy back their bearish bets.

Options traders also lean bearish, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.05 sitting in the 88th percentile of readings from the past month. Echoing this, the equity's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 83rd percentile of its annual range. Today, AVAV options are running at 25 times the usual daily volume. The July 270 call is the most popular, as is the 250-strike in the same standard series.

The security has also consistently exceeded options traders' volatility expectations, as reflected in its Schaeffer’s Volatility Scorecard (SVS) score of 96 out of 100. This metric suggests the stock has historically delivered larger-than-expected price swings.