- How Is AeroVironment Advancing AI-Enabled Multi-Domain Autonomy?
May 13, 2026
AeroVironment, Inc. AVAV is strengthening its defense technology portfolio by advancing autonomy, artificial intelligence (AI) and multi-domain control capabilities. These technologies are becoming increasingly important as defense customers seek systems that can operate across air, land, sea and other complex environments with greater speed, coordination and efficiency. By focusing on intelligent systems, the company is positioning itself to support missions that require faster decision-making and reduced operator workload.
A key part of this strategy is AeroVironment’s Kinesis command and control software. This platform is designed to support the operation of multiple uncrewed systems, including aircraft, ground vehicles and maritime assets. By bringing different assets under a common control environment, Kinesis helps improve situational awareness, mission planning and overall coordination for defense users.
The company is also building strength through MacCready Works, its innovation arm focused on autonomy, AI and advanced platform technologies. Solutions developed through this group are aimed at helping robotic systems perform complex missions in difficult operating environments. This focus supports AeroVironment’s ability to deliver systems that are more adaptive, connected and mission-ready.
With defense operations becoming more data-driven and distributed, demand for autonomous and software-enabled systems is likely to remain strong. AeroVironment’s work in AI-enabled autonomy gives it a stronger role in next-generation defense programs while broadening the value of its technology portfolio.
Companies Advancing Autonomous Defense Technologies
The defense sector is increasingly using AI, autonomy and command software to improve mission speed, coordination and decision-making. Companies like Kratos Defense & Security Solutions, Inc. KTOS and L3Harris Technologies, Inc. LHX are also strengthening their capabilities in this space.
Kratos Defense develops autonomous and unmanned systems while expanding capabilities in AI-driven mission and tactical communication technologies to support advanced defense operations.
L3Harris Technologies provides mission systems, sensors, and command and control technologies while strengthening autonomous and real-time battlefield communication capabilities for multi-domain operations.
Earnings Estimates for AVAV Stock
The Zacks Consensus Estimate for fiscal 2026 earnings per share suggests a year-over-year decline of 10.37%, and for fiscal 2027, estimates indicate growth of 26.94%.
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Zacks Investment Research
Image Source: Zacks Investment Research
AVAV Stock Trading at a Discount
AeroVironment is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 3.84X compared with the industry average of 12.03X.Zacks Investment Research
Image Source: Zacks Investment Research
AVAV Stock Price Performance
Over the past year, AVAV shares have climbed 2.9% compared with the industry’s 26.3% growth.Zacks Investment Research
Image Source: Zacks Investment Research
AVAV’s Zacks Rank
AeroVironment currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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AeroVironment, Inc. (AVAV) : Free Stock Analysis Report
Kratos Defense & Security Solutions, Inc. (KTOS) : Free Stock Analysis Report
L3Harris Technologies Inc (LHX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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- Wall Street Bullish on L3Harris Technologies, Inc. (LHX) Despite Price Target Cuts
May 13, 2026
L3Harris Technologies, Inc. (NYSE:LHX) is among the 9 Best Drone Stocks to Buy According to Wall Street Analysts. As of the close of business on May 8, the stock is a Strong Buy with an average share-price upside potential of 30%.Wall Street Bullish on L3Harris Technologies, Inc. (LHX) Despite Price Target Cuts
This is despite recent price target reductions following first-quarter financial results. On May 4, Bernstein analyst Douglas Harned slashed the stock’s price target to $405 from $435, citing budget uncertainty for 2027.
The firm said it was waiting for contracts for missile growth plans to be signed. However, Bernstein reiterated its Outperform rating on L3Harris Technologies, Inc. (NYSE:LHX) after beating revenue and earnings estimates for Q1.
Earlier on May 1, UBS also lowered its price target on the stock to $330 from $362, while maintaining a Neutral rating.
The defense contractor reported a total revenue of $5.74 billion, against forecasts of $5.42 billion. Diluted EPS came in at $2.72, up 33% year-over-year and beating expectations by 19 cents. The company lifted its EPS guidance for the full year, banking on robust demand from the U.S. government for its weapons and defense systems.
L3Harris Technologies, Inc. (NYSE: LHX) provides advanced national security solutions across the air, land, space, sea, and cyber domains. It operates through four segments: Communication Systems, Integrated Mission Systems, Space & Airborne Systems, and Aerojet Rocketdyne.
While we acknowledge the potential of LHX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 10 Best Large Cap Defense Stocks to Buy According to Hedge Funds and 18 Countries with Highest Indian Population in the World.
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- L3Harris Technologies Insiders Sold US$7.3m Of Shares Suggesting Hesitancy
May 9, 2026
The fact that multiple L3Harris Technologies, Inc. (NYSE:LHX) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.
L3Harris Technologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, Jonathan Rambeau, sold US$2.0m worth of shares at a price of US$370 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$301). So it is hard to draw any strong conclusion from it.
L3Harris Technologies insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for L3Harris Technologies NYSE:LHX Insider Trading Volume May 9th 2026
I will like L3Harris Technologies better if I see some big insider buys. While we wait, check out this freelist of undervalued and small cap stocks with considerable, recent, insider buying.
L3Harris Technologies Insiders Are Selling The Stock
The last quarter saw substantial insider selling of L3Harris Technologies shares. Specifically, insiders ditched US$5.2m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of L3Harris Technologies
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that L3Harris Technologies insiders own 0.3% of the company, worth about US$173m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
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So What Does This Data Suggest About L3Harris Technologies Insiders?
Insiders haven't bought L3Harris Technologies stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since L3Harris Technologies is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for L3Harris Technologies you should know about.
But note: L3Harris Technologies may not be the best stock to buy. So take a peek at this freelist of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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- A Lower Price Target On CACI May Reflect More Than Just Valuation Concerns
May 8, 2026
With an upside potential of 35.61%, CACI International Inc (NYSE:CACI) is among the 10 Tech Stocks That Could Make You a Millionaire.
On April 26, Jefferies analyst Sheila Kahyaoglu lowered the firm’s price target on CACI International Inc (NYSE:CACI) to $550 from $645 while maintaining a Hold rating on the shares. The revision follows solid fiscal third-quarter results but reflects a more cautious stance on valuation.
On May 4, CACI International Inc (NYSE:CACI) announced the appointment of Christopher Monoski as Executive Vice President of Manufacturing. Monoski will lead the development of a centralized manufacturing organization, strengthening operational capabilities following his tenure at L3Harris Technologies.
CACI International Inc (NYSE:CACI) is an American technology company specializing in solutions for national security and government modernization. Founded in 1962 and headquartered in Reston, Virginia, the company focuses on areas such as cybersecurity, data analytics, enterprise IT, and electronic warfare.
CACI International offers a steady investment profile as solid operational performance is complemented by leadership enhancements aimed at improving execution and scalability. The company’s role in mission-critical government services supports long-term demand despite near-term valuation adjustments, positioning it among the 10 tech stocks that could make you a millionaire.
While we acknowledge the potential of CACI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Energy Infrastructure Stocks That Will Skyrocket and 7 Best Vertical Farming and Hydroponic Stocks to Invest in.
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- Do Options Traders Know Something About L3Harris Technologies Stock We Don't?
May 8, 2026
Investors in L3Harris Technologies/, Inc. LHX need to pay close attention to the stock based on moves in the options market lately. That is because the May 15, 2026 $170.00 Call had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for L3Harris Technologies share, but what is the fundamental picture for the company? Currently, L3Harris Technologies is a Zacks Rank #2 (Buy) in the Aerospace - Defense Industry that ranks in the Bottom 34% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased his estimates for the current quarter, while three have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter to move from $2.85 per share to $2.78 per share in the same time period.
Given the way analysts feel about L3Harris Technologies right now, this huge implied volatility could mean there’s a trade developing. Often times, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
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L3Harris Technologies Inc (LHX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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- Stocks Have Hit Records on Market’s Cease-Fire Bet. Trump Complicates Matters.
May 8, 2026
Trade court overrules 10% global tariffs, three AI companies are listing next week, GameStop’s short interest could be about to spike, and more news to start your day.
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- Why Palantir Stock Popped Today
May 7, 2026
After two days of falling share prices post-earnings, defense technology giant Palantir (NASDAQ: PLTR) stock is getting back on the horse Thursday, and as of 11:40 a.m. ET its stock is up 4.2%.
You can thank the U.S. Army for that -- and hackers.
Will AI create the world's first trillionaire? Our team just released a report on a little-known company, called an "Indispensable Monopoly," providing the critical technology Nvidia and Intel both need.
Continue »Image source: Getty Images.
Palantir's Hackathon
Palantir announced this morning that it will participate in an upcoming "hackathon sprint" hosted by the U.S. Army. It won't be the only defense company participating; according to an Army press release, everyone from Anduril to Boeing(NYSE: BA), General Dynamics(NYSE: GD), L3Harris(NYSE: LHX), Leidos(NYSE: LDOS), Lockheed Martin(NYSE: LMT), Northrop Grumman(NYSE: RTX), and RTX Corp(NYSE: RTX) have also been invited.
But Palantir has a special reason to want to participate and show off its technical chops.
Last quarter, Palantir hit its highest-ever year-over-year growth rate of 85%, but two factors may still be worrying investors. First, Palantir warned that new contracts grew more slowly than sales (yielding a book-to-bill ratio under 1.0), and full-year sales may grow only 71% this year.
And second, government sales in particular grew more slowly than commercial sales -- only 76% for government, versus 95% for commercial, according to data from S&P Global Market Intelligence.
Why Palantir wants to enlist in the Army
A big win with the U.S. Army could help shift this dynamic and reaccelerate government sales growth. And here's the best news:
According to the Army, the aim of its "Right to Integrate" hackathon is to "ensure offensive and defensive weapon systems, and business systems across the Army, can collectively integrate, share data and communicate with each other." This objective plays right to Palantir's strengths.
If Palantir's looking for a place to grow faster, I think they just found it.
Should you buy stock in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing, L3Harris Technologies, Leidos, Palantir Technologies, and RTX. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
Why Palantir Stock Popped Today was originally published by The Motley Fool
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- Cathie Wood sells $11.8 million in Nvidia-backed stock before earnings
May 5, 2026
Cathie Wood just made a massive move ahead of a key tech earnings report.
The ARK Invest founder trimmed $12 million in CoreWeave (CRWV) stock just days before the company reports earnings in a couple of days' time.
On May 4, ARK sold 99,692 shares of CoreWeave across multiple ETFs, locking in gains, as the stock was in red-hot form over the past month, jumping 56%.
For perspective, CoreWeave emerged as one of Nvidia’s (NVDA) key picks-and-shovels partners in the AI infrastructure buildout, helping usher in the neocloud era.
Moreover, CoreWeave’s business is tied to Nvidia, with its AI cloud built around renting out Nvidia’s power-hungry GPUs to train and run AI models.
Additionally, that relationship goes beyond a simple customer-supplier arrangement.
Nvidia invested a whopping $2 billion in CoreWeave in January, raising its stake by nearly 50% to 47.3 million shares, becoming the company’s second-largest shareholder.
Nevertheless, Wood’s eyebrow-raising move is actually classic.
She typically leans into these growth stories early, but when the stock gets stretched, especially ahead of an earnings bump, she trims.
At the same time, ARK has been actively rebalancing its biggest AI-linked tech names after an impressive run of late.
TheStreet tech reporter Mwangi Enos covered Wood’s latest profit-taking moves in tech, noting several of her recent trims in Advanced Micro Devices (AMD) stock after a stellar run (she also cut more of AMD on May 4).
That seems to be the case with CoreWeave as well.
Cathie Wood’s ARK buys and sells on May 4, 2026
Buys
Shopify (SHOP): Bought 72,322 shares worth about $9.23 million. L3Harris Technologies (LHX): Bought 20,147 shares worth about $6.31 million.
Sells
CoreWeave: Sold 99,692 shares worth about $11.86 million. Advanced Micro Devices: Sold 2,524 shares worth about $910,000. Teradyne (TER): Sold 17,327 shares worth about $5.98 million.Cathie Wood sells CoreWeave shares worth $11.8 million ahead of a key earnings report this week.Jason Alden/Bloomberg via Getty Images
Cathie Wood’s investing style and trading playbook explained
Needless to say, Cathie Wood isn’t your typical fund manager.
Her investing style is akin to that of a venture capitalist, with a strategy that isn’t built for smooth rides.
Case in point is ARK’s focus on disruptive investing themes like AI, blockchain, and energy storage over multi-year horizons.
More Nvidia:
Nvidia is losing an industry that saved it from bankruptcy Nvidia CEO makes surprising admission on OpenAI and Anthropic Goldman Sachs just found a reason to like Nvidia stock again
The goal is to spot the bigger winners early on and capitalize on the upside, even if the ride’s bumpy.
Over the years, her bold bets have paid off, and while performance hasn’t always been ideal, those gains have been reinvested into underperforming names she still believes in.
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The pandemic was a massive tailwind for ARK, as the Fed slashed rates to near zero and flooded markets with liquidity alongside trillions in stimulus.
Growth stocks surged, with the Nasdaq-100 up nearly 48% in 2020 and 26% in 2021, boosting Cathie-esque bets.
Then we saw a reversal when inflation struck 9.1% in 2022, with rates blowing past 5%, and growth got crushed.
However, as conditions eased, ARK-style investing made a strong comeback.
ARK Innovation ETF more volatile than Technology Select Sector SPDR Fund over 2020-2025
2020: ARKK+151.89%; XLK+43.61% 2021: ARKK -23.38%; XLK +34.74% 2022: ARKK -66.97%; XLK -27.73% 2023: ARKK +67.64%; XLK +56.02% 2024: ARKK +8.40%; XLK +21.63% 2025: ARKK +35.49%; XLK +24.60% 2026 YTD: ARKK +1.70%; XLK +12.70%
Source: Yahoo Finance Performance pages for ARKK and XLK
CoreWeave’s rally faces a real earnings test
CoreWeave stock has steadied and staged a remarkable comeback rally since early March.
The double-digit rally was driven by its role as a direct play on the compute shortage, strong customer commitments, and consistent backing from Nvidia.
More recently, the catalyst has been deal momentum, with Jane Street committing nearly $6 billion for its cloud services, while CoreWeave expanded its Meta Platforms deal to $21 billion and signed a new multi-year agreement with Anthropic.
The numbers underscore the excitement.
Q4 sales more than doubled to a massive $1.57 billion, with full-year sales at $5.1 billion (up 168%), with its backlog topping $66.8 billion.
Nevertheless, it did burn $452 million during the quarter, crushed by $388 million in interest expense.
Its debt load remains a key issue, with it carrying more than $14 billion on the books, while 2026 capex is expected to be at $30 billion to $35 billion, Reuters reported.
As we look ahead, investors will want the upcoming earnings report to show that demand is still outpacing financing pressures, with a clearer path to margin improvement.
Tesla remains ARKK’s largest holding
Top 10 holdings of the ARK Innovation ETF as of early May:
Tesla: 9.69% Tempus AI: 5.22% CRISPR Therapeutics: 4.94% Circle Internet Group: 4.89% Advanced Micro Devices: 4.71% Shopify: 4.56% Roku: 4.53% Coinbase Global: 4.43% Robinhood Markets: 4.37% Palantir Technologies: 3.18%
Source: ARK Invest full holdings data for ARK Innovation ETF
Related: Apple CEO has stark message for Micron stock investors
This story was originally published by TheStreet on May 5, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
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- Cathie Wood Remains Convinced on CoreWeave After 78% YTD Rally in CRWV Stock
May 5, 2026
Cloud and artificial intelligence (AI) infrastructure company CoreWeave (CRWV) is up 78.65% this year as demand for AI computing power continues to surge. The company has been thriving, as structural constraints in traditional cloud supply, especially as demand for GPU-accelerated compute continues to grow. This is also driving a fundamental shift in computational architecture.
Neocloud platforms, like CoreWeave’s, are capturing market share to meet demand for AI infrastructure. According to one estimate, the neocloud market will approach $400 billion by 2031, representing a massive 58% CAGR.
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Against this backdrop and amid the growth of hyperscaler capex, Cathie Wood’s Ark Invest (ARKK), known for its dynamic investment approach, has been increasing exposure to AI infrastructure stocks, mainly established names such as Alphabet (GOOG) (GOOGL) and Meta (META).
In late April, Ark Invest invested $14.80 million through the Wood's Ark Innovation ETF (ARKK) and $2.50 million through the Ark Next Generation Internet ETF (ARKW) in CoreWeave’s stock. However, after a portfolio rebalance, Ark Invest shed $10 million through ARKK and $2.60 million through ARKW on May 4, seemingly to capitalize on the stock’s gains and make space for e-commerce giant Shopify (SHOP) and L3Harris Technologies (LHX). This is a shift after Wood had been accumulating CoreWeave amid the AI infrastructure demand rush.
Given this backdrop, we take a deeper look at CoreWeave.
About CoreWeave Stock
CoreWeave is a cloud infrastructure company built for demanding computing workloads, especially AI and machine learning. It runs a specialized platform that provides high-performance GPU cloud services, helping businesses and developers train models, manage workloads, and scale quickly. The company also supports data center operations across the U.S. and Europe. CoreWeave is headquartered in Livingston, New Jersey and has a market capitalization of $55.56 billion.
Investors are betting on surging demand for AI computing power, which has driven the stock higher. The company’s GPU cloud business has been growing quickly, and its close ties to Nvidia (NVDA) have helped support confidence in future demand and capacity usage. Additionally, strong revenue growth and optimism around its role in AI infrastructure have fueled its surge on Wall Street.
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Over the past 52 weeks, CoreWeave’s stock has gained 150.79%, while it is up 78.65% year-to-date (YTD). The stock reached a 52-week high of $187 in June 2025, but is down 31% from that level.www.barchart.com
On a forward-adjusted basis, CoreWeave’s price-to-sales ratio of 5.45 times is higher than the industry average of 3.26 times.
CoreWeave Growth Fueled by Partnerships and Funding
CoreWeave has been raising money to expand its operations. In March, the company closed a landmark $8.5 billion delayed draw term loan facility (also known as the DDTL 4.0 facility), which received an A3 rating from Moody’s and an A (low) from DBRS. The structure also enables CoreWeave to secure up to $7.5 billion in initial funding, supporting the continued expansion of its AI facility.
Aiding the company’s growth has been its notable partnerships. As already stated, CoreWeave has a longstanding relationship with Nvidia. Building on that, it announced the addition of the NVIDIA Rubin platform to its AI cloud platform and collaborated to build more than 5 gigawatts of AI factories by 2030. CoreWeave also signed on as an infrastructure partner for the deployment of Anthropic’s Claude model family. The company also partnered with Meta to deploy AI capacity on a long-term basis through December 2032 for approximately $21 billion.
Furthermore, CoreWeave’s financials are swelling strongly. Last year, its revenue grew 167.9% year-over-year (YOY) to $5.13 billion, while its revenue backlog grew to $66.80 billion as of Dec. 31. The company is also targeting an ambitious $12 billion to $13 billion in revenue for the current year and expects to earn $900 million to $1.10 billion in adjusted operating income.
Wall Street analysts posted a mixed outlook for CoreWeave’s bottom line trajectory. For 2026, its loss is anticipated to grow 54.28% YOY to $4.15 per diluted share, followed by a 14.7% improvement to $3.54 loss per share in 2027. The company is expected to report a loss per share of $1.17 for the first quarter of 2026 (to be reported on May 7, after the market closes).
What Do Analysts Think About CoreWeave’s Stock?
Recently, CoreWeave received a price target increase (from $126 to $155) from Citi analysts, while maintaining a “Buy” rating, citing faster backlog growth and wider customer diversification. Wolfe Research also initiated coverage of the stock with an “Outperform” rating and a $150 price target, projecting it to be the best-positioned neocloud.
CoreWeave is gaining praise on Wall Street, with analysts awarding it a consensus “Moderate Buy” rating overall. Of the 33 analysts rating the stock, a majority of 20 have given it a “Strong Buy” rating, one a “Moderate Buy,” 11 a “Hold,” and one a “Strong Sell.” The stock has already surpassed the consensus price target of $126.64. Moreover, the Street-high price target of $180 implies a 39.9% upside.www.barchart.comwww.barchart.com
On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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- CGNT Stock Up 38% in the Past 3 Months: Is There More Upside Ahead?
May 5, 2026
Cognyte Software Ltd. CGNT has been on a sharp upward trajectory, with its stock up nearly 38.1% over the past three months. Cognyte is a relatively young, standalone public company that spun off from Verint Systems in 2021.
The rally over the past three months has been driven by improving financial performance, strengthening demand trends and growing investor interest in the company’s prospects. Cognyte operates in the niche but increasingly critical domain of investigative analytics. The company provides data processing and AI-driven investigative analytics solutions primarily to governments and law enforcement agencies. As simmering geopolitical tensions spawn complex and massive volumes of data, the demand for such solutions is exploding.
However, such a rally often raises a critical question for investors: is there still meaningful upside left in the stock?
Let's do a deep dive and assess what to do with CGNT
CGNT: Multiple Tailwinds Offer Long Runway for Growth
The company is operating in a domain shaped by rising geopolitical tensions, increasing cyber and hybrid threats, sophisticated and complex data, and the need for real-time intelligence. Management noted that these factors are driving demand for its solutions.
Cognyte delivered double-digit revenue growth, with fiscal 2026 revenues rising 14.1% year over year. Demand from repeat customers, as well as increasing new customers, cushioned the top-line performance. Management noted that the installed base forms a significant portion of revenues, highlighting customer stickiness.Zacks Investment Research
Image Source: Zacks Investment Research
In the fourth quarter of fiscal 2026, recurring revenues were up 5.6% to $50 million, representing 47.1% of total revenues.
CGNT recently announced that it won a $20 million plus, three-year subscription contract with a “long-standing customer” in the Europe/Middle East/Africa region, underscoring both demand visibility and customer stickiness.
Apart from installed base expansion, focus on new customers and scaling of the U.S. market bodes well. 61 new customers were added in fiscal 2026. CGNT is also strengthening its sales team and recently added Carahsoft as a channel partner. Carahsoft will aid in providing access to federal, state and local procurement channels to boost adoption of CGNT’s solutions.
The integration of AI into investigative workflows is emerging as a key differentiator. Cognyte is embedding AI into its operational systems platform, which creates a competitive moat.
The company’s backlog and remaining performance obligations (“RPO”) strengthen revenue visibility. Total RPO stood at $557.2 million, with a backlog of $433.4 million at the end of fiscal 2026. Total RPO is the sum of contract liabilities and backlog. As a result, the company now expects fiscal 2027 revenues to be $448 million (+/-3%) compared with $400 million in fiscal 2026.
Story Continues
Zacks Investment Research
Image Source: Zacks Investment Research
As revenues scale, profitability is also improving. Fiscal 2026 non-GAAP gross margin expanded 200 basis points to 73%, while non-GAAP operating profit of $36.7 more than doubled year over year. Adjusted EBITDA came in at $48.2 million, up from $29.1 million in the prior-year quarter. The company has already achieved its fiscal 2028 gross margin targets ahead of schedule, indicating strong execution.
Cognyte ended fiscal 2026 with approximately $116.9 million in cash and no debt. A strong balance sheet provides flexibility for acquisitions, innovation and shareholder returns. The company is also actively returning capital through share buybacks, signaling confidence in its growth. For fiscal 2026, CGNT repurchased stock worth $21.4 million.
However, macro uncertainty, competition, rising operating expenses and dependence on government spending cycles remain concerns.Zacks Investment Research
Image Source: Zacks Investment Research
Analysts have significantly revised earnings estimates upwards for CGNT’s current fiscal year.
CGNT Stock vs. Peers
CGNT’s 38.1% gain stands in stark contrast to the Zacks Internet Software market’s decline of 1.6% in the past three months. The broader Computer and Technology sector and the S&P 500 are up 11.6% and 5%, respectively.
Price PerformanceZacks Investment Research
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Some of its peers, such as Elbit Systems ESLT and Palantir PLTR, have gained 29% and 7.4%, respectively, while L3Harris Technologies LHX is down 11.7%. Elbit Systems is an Israel-based company like Cognyte, while Palantir and L3Harris are established U.S.-based companies.
CGNT’s Discounted Valuation
In terms of the price/book multiple, CGNT is trading at 3.23X, lower than the sector’s multiple of 4.83X.Zacks Investment Research
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ESLT, PLTR and LHX trade at a price/book multiple of 9.23X, 46.64X and 2.93X, respectively.
Why CGNT Still Has Room to Run
At present, CGNT flaunts a Zacks Rank #1 (Strong Buy).
Cognyte’s strong revenue visibility, expanding margins and growing role in the AI-driven investigative analytics space bode well. With a robust backlog and exposure to long-term geopolitical and security tailwinds, the company appears well-positioned for sustained growth.
While risks remain, CGNT still looks to have meaningful upside potential.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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Elbit Systems Ltd. (ESLT) : Free Stock Analysis Report
Cognyte Software Ltd. (CGNT) : Free Stock Analysis Report
L3Harris Technologies Inc (LHX) : Free Stock Analysis Report
Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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