Palladyne AI Corp (NASDAQ:PDYN) is one of the best small cap robotics stocks to buy according to analysts. Palladyne stock is up about 30% year-to-date, and most analysts on the Street expect the stock to rise more.
On May 7, Jefferies cut its price target on Palladyne AI Corp (NASDAQ:PDYN) shares to $7 from $8 but kept its Hold rating on the stock. The revised price target still indicates a decent upside potential.
Jefferies nodded to Palladyne’s strong Q1 2026 results, particularly mentioning progress in customer proof points with the company’s SwarmOS platform. However, Jefferies told investors that you “must crawl before you walk.”
The SwarmOS is an autonomy software platform that enables multiple autonomous drones and robots to work together as a coordinated team. It can be used in defense and other applications. During Q1, Palladyne had several SwarmOS demonstrations.
Palladyne’s Q1 results showed revenue increased 107% YoY to $3.5 million. However, the company’s operating loss widened to $11.9 million from $6.9 million a year ago amid continued investment in defense and commercial programs.
The company exited Q1 with a backlog of $17 million, up from $13.5 million at the end of 2025. The management said the expanding backlog provides good visibility into the revenue growth ahead. The company expects to convert the majority of the backlog into revenue in the next 12-18 months.
Based in Salt Lake City, Utah, Palladyne AI Corp (NASDAQ:PDYN) is deeply involved in the robotics business. It was founded in 1983, and for most of its years in business, it developed robots. In 2023, it discontinued the hardware business and shifted its business to developing AI software for robotic applications. Its software enables robots and drones to learn and act autonomously.
While we acknowledge the potential of PDYN 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.
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