Freedom named small-cap stock with 50% upside potential for speculative buying

Shares of Airo Group, a small-cap manufacturer of drones and drone defense systems, may rise by almost 50% in the short term, according to an investment note by Freedom Broker. The company expects to gain access to U.S. government procurement, which makes its securities attractive for speculative buying, analysts said.

Airo shares may rise to $14 in the next two months, according to Freedom Broker's investment note, which is available to Oninvest. At the close of trading on June 2, the company's securities were worth $9.46, so this target implies a growth potential of 48%.

Airo has positioned itself as a beneficiary of US policy, which prohibits US agencies and their contractors from purchasing equipment from a number of foreign companies, according to a Freedom review. The drone developer's solutions are now going through Washington's compliance process, after which the company's management believes it will gain access to US federal contracts. This could be a key catalyst for the revaluation of its securities, analysts say.

Freedom recalls that the drone sector in the U.S. has gotten a boost after President Donald Trump's administration and his inner circle publicly supported expanded investment in the technology. This has increased interest in smaller industry players, including Airo, analysts said.

Airo is a small-cap company with negative profitability. At the end of the first quarter of 2026, its revenue fell almost 25% year-over-year to $8.9 million, its operating loss grew 5.5 times to $17.2 million, and its net loss jumped 7.8 times to $15.5 million.

The performance of government contractors is dependent on contract terms, production schedules and delivery milestones, Airo explained. Other factors in this dynamic include an increase in the cost of sales, as well as investments in scaling up production.

At the same time, the company reiterated its revenue growth forecast for 2026 - it should reach 15-25%, which will be supported by increased drone deliveries, capacity expansion and continued international demand for its products.

Freedom draws attention to the high volatility of Airo securities and a noticeable share of short positions - about 13%. This creates a ground for short-squeeze in case of sharp bullish trend on the market, which can be connected with geopolitical news or reports about new contracts, is stated in the investment note.

In trading on June 3, Airo's quotes fell 3%, while it is in the plus side by almost 16% since the beginning of the year.

The company's securities have a total of two "buy" ratings from Wall Street analysts and one "hold" rating. The average target price is $18, which is 90% above the last closing level.