One of the surest ways to make big money is to invest early in a small, technologically innovative company that has a head start over rivals. After all, the Holy Grail of investing is to find the next Apple (AAPL - Get Report) .

It also helps if the federal government throws its considerable weight behind the company's industry.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

Federal Aviation Administration chief Michael Huerta Wednesday reaffirmed the huge investment potential in unmanned aerial systems (a.k.a. drones), by pledging that the FAA will expedite their commercial application.

Huerta, whose remarks are always closely followed by aerospace industry leaders and investors, described the fast growth of drones as one of the "critical moments" in the history of aviation. He asserted that drones have "fundamentally changed" the world and that their use would expand exponentially .

Huerta made his remarks on Wednesday, as part of his grand opening keynote address at the InterDrone trade show in Las Vegas. With 4,000 attendees and 135 exhibitors, InterDrone is the largest event in North America dedicated to the commercial drone market. 

The dominant company in the commercial drone industry is AeroVironment (AVAV - Get Report) , which makes a broad spectrum of drones for both commercial and military applications. As the drone industry enjoys explosive growth, now's the most opportune time to grab shares of AeroVironment, while it's still a mid-cap stock with room for significant upward growth.

Citing the recent implementation of the Small UAS Rule (Part 107) to integrate commercial drone operations into the national airspace, the FAA's Huerta called Part 107 "one of the most significant milestones" for bringing drones into the aviation mainstream.

FAA Part 107 became effective on Aug. 29, and it's considered a major shot in the arm for drone makers. Essentially, the rule makes it easier for the commercial operation of drones weighing less than 55 pounds. One major stipulation is that the operator must keep the drone within sight.

FAA Part 107 means that the U.S. government has officially opened the door for the commercial use of drones. Through Part 107, the regulatory process has become simpler and considerably more efficient. This regulatory streamlining is a major tailwind for AeroVironment.

Increasing numbers of federal organizations such as the U.S. Coast Guard, Forestry Service and Border Patrol, as well as local police departments, are adopting drones for airborne surveillance and monitoring. These futuristic machines also are in great demand among Hollywood filmmakers, who are deploying them to capture exhilarating aerial footage that was once unobtainable or extremely costly.

Drones already stand in the forefront of military technology and now they're also getting paired with manned military helicopters, to create operational synergies. These efforts are accelerating the development of advanced sensors, which are vital to commercial drones.

"Military helicopter manufacturers continue to upgrade sensors on premier platforms, even as the U.S. Army, the world's largest rotorcraft operator, plans its future vertical lift platform," says Bill Carey, senior editor at Aviation International News and author of the book Enter the Drones.

The widespread use of commercial drones still faces many regulatory hurdles, but through Part 107 the FAA has eased those restrictions and paved the way for their use. These developments put drones among the hottest investment opportunities available.

Online retailing giant Amazon intends to develop a program where its packages are delivered to customers' doors via drones. The scheme seems far-fetched, but considering advancements in drone technology it's not all that improbable. The use of drones for package delivery is greatly dependent on miniaturization, a capability at which AeroVironment excels.

Bilal Zuberi, a partner at the Silicon Valley venture capital firm Lux Capital, spoke at an InterDrone panel on Wednesday. (Full disclosure: The author of this article moderated this panel, which was made up of prominent technology venture capitalists.) In his capacity as a VC looking for sizable returns on investment, Zuberi has been studying the drone industry for several years. "For investors, the key is to keep an eye out for the innovative drone applications that no one has envisioned yet," he said.

With a market cap of $554.6 million, AeroVironment has the financial wherewithal to develop groundbreaking drone applications. It's sufficiently large to weather the industry's inevitable ups and downs, but also small enough to reward investors with market-beating gains when compared to larger and more diverse rivals such as Boeing and Raytheon.

AeroVironment is a major player in the U.S. Army's "next-gen" battlefield blueprint, whereby situational awareness is enhanced for ground troops as well as supporting aircraft. As is often the case with military technology, the Pentagon's focus on situational awareness is bearing fruitful spinoffs into the commercial sector.

Analysts estimate that AeroVironment will rack up annual adjusted earnings per share of 20 cents in the current fiscal year, which ends in April 2017. As of July 30, 2016, the company boasted a funded backlog of $74.7 million compared to $65.8 million as of April 30, 2016.

Shares of AeroVironment now trade at about $24; the average 12-month price target from analysts who cover the stock is $31. That means that if the analysts are right, the shares could gain 29% in the next year.

AeroVironment is beset by a bevy of start-ups that are competing for market share, but none even come close to the company's entrenched client base and financial heft. As the drone industry achieves giddy growth, it's on the cusp of an inevitable shake out. When these smaller players fall by the wayside, AeroVironment is likely to be the last man standing.


As we've just explained, AeroVironment is a smart bet now. If you're looking for other growth opportunities, we've found a genius trader who turned $50,000 into $5 million by using his proprietary trading method. For a limited time, he's guaranteeing you $67,548 per year in profitable trades if you follow his simple step-by-step process. Click here now for details.

John Persinos is an editorial manager and investment analyst at Investing Daily. At the time of publication, he owned stock in Boeing and Raytheon. Persinos appears as a regular commentator on the financial television show "Small Cap Nation." Follow him on Twitter.