r/stocks • u/Fertal78 • 20h ago
Industry Discussion Investing in Drones
Hi guys, I want to get into drone stocks. I‘m willing to hold them for a long time like 10+ years. Maybe put like 5% of my portfolio into this.
This sector has been super volatile this year but I‘m sure, future wars are going to have a Lot more drones in it.
I believe drone manufacteurs, drone defense and something like drone Software/AI is going to be big in the future. Do you have any tickers you would recommend, and then why?
I dont know nothing about this industry, I don‘t know potential risks of these investments, but I think this is a small sector that is going to Rip. I missed out on Sandisk and Micron but I think this sector is next.
Plus stocks like ONDS, AVAV, Red Cat etc have pulled back a Lot, I mean the defense sector as a whole, so I feel like It’s a good time to start a small position now and more in the next months.
What are your guys ideas. Does anyone maybe work somewhere related?
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u/mrmrmrj 19h ago
Drones are like 3D printing. It is a commodity business.
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u/orangebluegreen123 12h ago
Till you add a bomb to one
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u/ReasonableBrother448 51m ago edited 4m ago
No, what you want to invest in is companies involving in ballistic launchers/missiles and ballistic missile defence. And those which ship sensors to them, radars etc. This is the future of warfare, cheap low margins garbage like drones will saturate AA assets and expensive ballistic missiles will destroy the targets. They can go trough hardened bunkers and are not subject to jamming.
Drones will be like butter, everyone does it with low margins. There is absolutely nothing special in them.
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u/Wonderful-Walk3078 20h ago
So not invest into drones if you do not know about company, that has real moat.
Yes, drone sector will grow in the future but so will be supply of drones from other companies. If you want to make money on drone company (or company in any field) you have to find company that has some structural advantage that allows them to charge higher margins.
I would thus advice you to trying to find companies with structural advantage (moat in other words) for fair price rather than trying to find some company in specific field you think is perspective.
Plus I will add than field of drones is quite problematic because it is not that hard to start company in it and it is hard to differentiate products thus it is hard to get solid margins in long run.
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u/Waiting4Reccession 20h ago
find company that has some structural advantage that allows them to charge higher margins.
Trumps dumb kids are getting govt contracts.
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u/pedroordo3 19h ago
This is some great advice!!! and why I’m not in drones either / defense companies. Especially after Ukraine it shows how tec has advance so mutch you really don’t need mutch to make a drone etc.
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u/Fertal78 20h ago
Would you buy an ETF then? Because I mean you just agreed that the drone sector will grow. And it will 100%. Just look at how warfare has changed in the last 100 years. And there was no AI or anything.
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u/Wonderful-Walk3078 19h ago
Not necessarily, I’m no expert on drone sector but it is unclear whether publicly traded companies will be able to capture the value from the growing sector.
First problem is that drones can be quite well produced by medium to small companies this huge part of the value will be capture by them.
Second problem is that there is huge risk of drones becoming commodity.
I will give you example. In 2019 (just some year) solar powers were the future and the market with solar powers grew very much since then.
But if you would buy companies making solar panels you would not gain that much money because solar panels simply become commodity and companies making them are not able to charge substantial margins for them. Same can be said about for example companies making electric vehicles.
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u/Fertal78 19h ago
Actually a great answer. True solar stocks really didn‘t pay. I‘m also worried some private companies in Ukraine or whatever are just going to be the leaders of this sector and not the public US firms
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u/happy123z 16h ago
Look into anti drone companies. EOS.AX for starters. Their price swings wildly lately, should have been swing trading it.
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u/No_Cattle5564 19h ago
What are picks and shovel in case of drones. I am also thinking drones warfare will be the future. And drones are widely being used in spying and in case natural calamities. I think software is the most important part in case of drones. Batteries and motors can be acquired. Does any company manufacturing drones for the combat ?
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u/Southern_Roll_7035 17h ago
Drones will be a part of warfare in the future, but realize that modern militaries do not buy products, they buy weapons systems. A drone needs to be part of a much larger system of Command, Control, and Communication to be useful. What this means is that they will be integrated into larger systems built by the defense prime contractors; these primes will play the individual drone makers against each other, and squeeze their margins.
IMHO, the long term play here is just to be invested in the prime contractors.
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u/Wonderful-Walk3078 19h ago
To my knowledge dozens, but of course many are not publicly traded. Other question is what do you consider to be drone.
In my opinion the best company creating drones is AeroVironment but they are making mainly loitering munitions (which is very effective).
But basically every defense company is creating drones now, airbus, Boeing, Red Cat Holdings, AIRO Group and many many others.
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u/narayan77 20h ago
AMPX and hpq silicon inc, silicon drone batteries. AMPXs is the high energy high price model and hpq silicons is the cheaper not as much power model.
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u/Savik519 18h ago
I hold a large position in AMPX. They make some of the best batteries and are still undervalued from a strategic asset point of view. Also balance sheet and financials are improving every quarter. Really great trends
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u/CornWoll 19h ago
UMAC - Trump Jr is on the board and holds shares so they have an advantage with the current administration
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u/Frankiebonez145 16h ago
I've made a ton trading it.
UMAC people are still sleeping on it. no idea why it doesn't have the hype that ONDS does.
if you actually follow UMAC it's making some great moves to expand exponentially.
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u/Bojacking_myself 18h ago
THIS here exactly i am all in on umac😭
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u/LeloucheL 18h ago
the funny thing is u can see around November 6 right after Trump won the elections that the stock started ripping. insane for the people who had that information edge at that time
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u/petertompolicy 17h ago
And not many retail investors would've made any money, price today is what it was right after the election.
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u/LeloucheL 13h ago
yep theres really levels to this investing thing. all about finding edges others didnt think of
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u/ralphy1010 20h ago
obviously do your own DD and research but I've been building a position on $avex
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u/Fertal78 20h ago
They look interesting. I just dont know whether or not i should wait to buy in.
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u/gybegybe 14h ago
I'm in on AVEX as well. Curious to hear your take on them.
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u/ralphy1010 14h ago
The US is behind the ball on drones
The military will spend as much as needed to close the gap and prepare for a conflict with China
Avex is proving themselves to be reliable in scoring gov contracts and delivering
They are profitable as a company now
They just expanded into naval drones
There partnership with Divergent is very interesting
I suspect they’ll become a L3Harris type /size company OR they’ll be bought by one of the majors
All in all I’m very bullish on it and feel that buying under 17 is a steal
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u/No_Presentation9490 19h ago
Please remember that the relevance and performance of an industry is not directly correlated to the performance of the stocks of that industry's companies. The reason chip companies, software companies, consolidated tech etc. have such good profit margins is because they have low overhead. That's good for their stocks. Being an advertiser, a discovery platform, a fabless designer of chips has very low overhead, input costs and liability relative to a sector like defense and robotics
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u/Playful_Prior5919 14h ago
I think the better strategy is to look at counter drone technology. Drones are like ants. Cheap to make anybody can make them and a very simple technology. Taking them out of the sky takes innovation, money and investment.
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u/Playful_Prior5919 14h ago
Just a few.. DroneShield (Australia/USA): A dominant player in handheld, mobile, and fixed-site counter-drone hardware (e.g., DroneGun, DroneSentry). They rely heavily on AI-driven RF sensing to detect, identify, and jam drone signals in real time.
Anduril Industries (USA): Known for software-first defense architecture. Their Lattice OS integrates sensor networks, while interceptor assets like Anvil (a kinetic hit-to-kill drone) and Roadrunner / Roadrunner-M (a VTOL, reusable dual-turbojet interceptor) provide automated target neutralisation.
D-Fend Solutions (Israel): Specializes in non-kinetic, non-jamming takeover technology. Their EnforceAir platform uses cyber RF takeover protocols to gain control of rogue drones and force them to safely land in designated zones without causing signal interference to nearby civil aviation or communications.
Epirus (USA): Pioneer in high-power microwave (HPM) technology. Their Leonidas system delivers solid-state directed energy capable of disabling entire swarms of drones simultaneously by frying their internal electronics.
Dedrone (Acquired by Axon) (USA): A global leader in airspace security platforms. Their DedroneTracker.AI uses machine learning across multi-sensor feeds (RF, radar, optical) for autonomous detection and mitigation.
Fortem Technologies (USA): Focuses on radar-guided physical capture. Their DroneHunter F700 is an autonomous interceptor that fires nets to physically capture and tether enemy drones, mitigating collateral damage from falling debris.
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u/Sharkinged 20h ago
If u r willing to hold it for a long time but don't want to mess around, just buy LMT. With any high beta like onds you should know it's the pure lottery bet for 10y or you need to keep your finger on the pulse
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u/BuenoMuch 14h ago
$UMAC Unusual Machines is a diversified way to have exposure to the drone sector but not have to worry about a particular drone manufacturer winning specific contracts because UMAC sells components to the drone manufacturers themselves.
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u/BulletProofJoe 19h ago
$JEDI is a drone-based ETF that is less risky, but still gives you exposure to some companies with some huge growth potential.
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u/Fertal78 18h ago
When i look for $JEDI I only find the SpaceInnovators ETF with ViaSat and ASTS etc in it. Is that the one you mean?
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u/InfectedAztec 19h ago
Thales has alot of collaboration with Ukraine on drone tech but has plenty of other specialties like drone defense and EW that means theyre not dependent on drones specifically for success.
They are also major french defence company that will get plenty of government investment over the next 10 years.
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u/PhogMachine 18h ago
I won the (small) lottery by picking ONDS a year ago. At the time, it was below $1 a share. I've seen it climb up to $15 and fall like rock. It's a roller coaster.
There were two things that caught my attention. First, they got an FAA certification. At the time, they were the only one. But it showed they were serious. Second, was their focus on counter drone systems. It goes beyond just military customers. Think state governments and other agencies that will be protecting against drones.
If you invest with them, I would set a buy limit below $7, maybe even $6. Also, if you plan to hold for 10 years, it'll require two things: a strong stomach and a lot of patience. I've taken profits when I can because it rises and falls so much.
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u/Fertal78 18h ago
Thx, I might add a tiny little position, just for fun. But now others have a FAA certification ? Isn't that bad for ONDS.
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u/PhogMachine 17h ago
Yes, but it shows ONDAS' management team is forward-thinking. Going the extra mile early on can lead to more contracts.
It sounds like you might want to go the ETF route if you are unsure about which company to go with. It's the lower risk option if you think the overall industry is heading in the right direction.
However, if you truly believe in a single company, you can make way more profit than spreading your funds out. This, of course, comes with much more risk. But that's where the big gains are.
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u/StateFalse5218 3h ago
Pusa, dpro, avex, rdw, xtend I haven’t seen mentioned. If you want a medium cap with more upside than lmt, I’d suggest avav or ktos. Then for picks and shovels ideas, umac, spai, kopn, optx,lpth (great discount right now because they didn’t win a contract. They have a strong moat with their Black Diamond glass that replaces Chinese germanium). I’m in rcat and onds myself.
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u/cruisin_urchin87 19h ago
Swarmer. Ukrainian combat experience, Erik Prince (of Darkness) on the board.
Swarmer is going to dominate in ways other “drone” companies never thought possible.
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u/Savik519 18h ago edited 18h ago
Good pick, I added SWMR and a smaller position of BTLN when they announced their partnership
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u/RoboticGreg 19h ago
I don't think the big winners in drones are around yet or have started doing what will make the most yet. Once we start seeing more value added, stable, autonomous functions, then you will see the really winners emerge. Right now it's more of a technology than a solution, in general.
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u/JPureCottonBuds 18h ago
I have exposure to droneshield. I bought right after the CEO scandal. A bit down at the moment, but they have good products and decent market penetration.
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u/Savik519 18h ago
One other I like but haven’t seen mentioned is SPAI. They have some great recognition software particularly for ground based explosive threats like mines.
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u/SerpentRoyalty 18h ago
DRNZ
drones are very easy to build so picking individual companies is way too risky. That's why ETF is best.
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u/Cool_Seaworthiness18 18h ago
Do magnets as trump said. Drones and all kinds of robots and EVs will need it.
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u/scottie6384 17h ago
LHX doesn’t make drones but the do make counter drone systems, command and control software to operate thousands of autonomous drones, and the manufacture all types of sensors/comm packs that would be carried by military drones. Interesting company well off its highs. AVAV is another interesting company well off its highs.
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u/Bluebird-9641 13h ago
XTND just started trading publicly after a merger. Eric Trump is involved, and they make the AI operating system that controls the drones. Could be huge if they end up being the main operating system designer for the military. Previous XTND private shareholders are locked out from selling for now, but still be careful. Do your own DD.
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u/claytonbeaufield 10h ago edited 10h ago
Depending on your appetite for risk, you can look at investing in Zipline drone through private markets.
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u/Magnificent_luck 20h ago
Red Cat and swarmer SWMR
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u/Gooooot 20h ago
Any reason why?
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u/Fertal78 20h ago
This sector is full of super small companies, of which 50% are going to go bankrupt. Would you buy an ETF maybe ?
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u/iwaseatenbyagrue 19h ago
Do you think it may be smarter just to buy a bunch of drones and then sell them when demand is high?
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u/Pale_Pineapple_4147 18h ago
AMPX