Shares of Kopin Corp (NASDAQ:KOPN) were climbing in early trading on Thursday.

The provider of advanced microdisplays for military applications is poised to benefit from the continued growth of defense budgets across the U.S. and NATO countries, according to Canaccord Genuity.

Analyst George Gianarikas initiated coverage of Kopin with a Buy rating and a price target of $2.

The Kopin Thesis: While the defense market contributes around 80% of revenues, the company is exploring new growth avenues in the civilian market, Gianarikas said in the initiation note.

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Kopin could benefit from the rising interest in augmented reality/virtual reality (AR/VR) technologies, which offers "promising prospects" in consumer electronics and medical applications, he added.

"CEO Michael Murray (started September 2022) continues to improve operations, resulting in a potential turn to profitability in 2025," the analyst wrote. "We further see optionality as the company could look to expand either through targeted acquisitions or as an acquisition target itself," he further stated.

Price Action: Shares of Kopin had risen by 4.41% to $1.42 at the time of publication on Thursday.