Droneshield Ltd (ASX: DRO) was the best performer on the S&P/ASX 200 Index (ASX: XJO) and one of the fastest-growing stocks on the planet in 2025.
The counter drone technology company’s shares opened at 76 cents per share on the 3rd of January 2025 and closed for the year at $3.08 a piece 12 months later on the 31st of December. That’s an enormous 305.26% increase in just 12 months.
That means that $10,000 invested at the start of the year would have exploded to over $40,000 by the end of 2025.
For context, the ASX 200 Index increased a healthy 6.16% over the same period.
So, what’s next?
The ASX 200 share price will keep climbing higher
After a couple of setbacks this year, it looks like Droneshield‘s share price has hit the bottom and will keep climbing higher in 2026.
Droneshield shares closed 1.3% higher on Tuesday afternoon, at $3.90 a piece. The latest increase means the shares have already climbed an impressive 26.62% so far in 2026.
We’re still a long way from the $6.36 all-time peak seen last October, but I’m confident that the company’s growth strategy this year will put Droneshield shares back on track this year.
Analysts are incredibly bullish that there is plenty more upside ahead for the ASX 200 company’s shares in 2026, too.
TradingView data shows that analysts consensus is a strong buy rating on the stock. The maximum target price is $5.00, which implies another 28.21% upside for the shares this year, at the time of writing.
Bell Potter has a buy rating on this ASX All Ords share with a 12-month price target of $4.50. The broker said that it expects 2026 will be an inflection point for the global counter-drone industry with countries poised to spend more on their defence.
The business will benefit from an explosion of demand
Droneshield has a strong growth strategy ahead for 2026. It plans to scale its manufacturing capacity, expand its global footprint and continue converting its huge sales pipeline into secured contracts. The company is early on in its growth cycle too, which means there is a great upside if its customer base and technology keeps growing at the current rate.
The growth strategy should be an easy feat for the counter-drone business, especially against the backdrop of continued geopolitical uncertainty.
Late last week, defence stocks enjoyed an uptick in their share prices after US President Donald Trump said that he’d like to see a massive increase in defence spending. He said that the 2027 US defence budget should be US$1.5 trillion, well above the US$901 million so far approved. President Trump’s comments come off the back of the latest US-Venezuela situation. Investors think recent developments will translate to higher demand for counter drone solutions.
DroneShield has significant business in the US. In December, DroneShield announced an new $8.2 million contract from an in-country reseller for delivery to a western military end-customer. It also announced a new $49.6 million contract with a European reseller that is contractually required to distribute the products to a European military end-customer.
As global tensions continue rising, I can only see demand for AI-operated drone technology to continue to increase this year. Perhaps Droneshield will be the best-performing stock of 2026 too?
The post What’s next for the best-performing ASX 200 stock of 2025? appeared first on The Motley Fool Australia.
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More reading
- Why I think CSL and DroneShield shares are buys for 2026
- Are these ASX 200 shares a buy after yesterday’s sell off?
- Why 4DMedical, DroneShield, Super Retail, and Tamboran shares are falling today
- Brokers rate 3 ASX All Ords shares that more than tripled in value in 2025
- These are the 10 most shorted ASX shares
Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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