Drones as a new trend - companies and future prospects

[eM86]

I’m a bit surprised I haven’t found a thread about drones. Especially with US companies, there’s been quite a hype and buzz around many drone companies. Several companies that even remotely touch drones have risen hundreds of percent during the summer and autumn. Volatility in them has been high, but the direction has been quite clearly upwards.

A few picks from America worth checking out. It’s not too late yet, but the best seats on the train are already gone.

Apologies for the imprecise language. I started investing a year and a half ago, and I’m still learning the terminology.

Ondas Holdings https://www.ondas.com/

The curve clearly looks Bullish or even ultra bullish. The company has made a couple of offerings within a couple of months, and the stock price has practically not dipped much because of them. In addition, yesterday’s announced offering included a raise of over $400 million at a price of $11.50/per share, which is more valuable than the current price, with the stock hovering around $10.50. Rumors are circulating that the company is buying other drone companies and aims for a strong market leadership position. Consultants have been gathered from experienced military leaders, and according to their website, they are also involved in Trump’s Golden Dome project. CEO Eric Brook is surprisingly down-to-earth. At least my belief in this is strong. Some say this is the next Palantir.

Red Cat Holdings. https://redcat.red/

The rise is not as steady as with Ondas. There’s plenty of volatility. This company has also arranged an offering. RCAT has a Black Widow drone approved in the NATO catalog. I haven’t researched the company in detail, but it’s certainly worth following due to its NATO connection.

Unusual machines. https://www.unusualmachines.com/

I’m also following this one because this company apparently has a connection to the Trump administration. The curve also looks quite nice.

So, all of them are small caps, but they have made good leaps due to the buzz. Discussion and opinions, please.

[Thiebault]

Here’s my own watchlist for drones. Quite a few companies are familiar, but only superficially. Also included are larger diversified defense technology companies that dabble in drones as a side business. The list is filtered by market cap:

[wappana]

An interesting article about the company ONDAS, which goes through its valuation.

https://twitter.com/PasiHavia/status/1974472185717932142

[Pyhimys]

Ondas and Unusual Machines, mentioned in the opening post, both invested last week in Kopin, which develops micro-displays for military applications. As one application, drone operators can use Kopin’s display technology. There is a discussion about the company on the forum: Kopin Corporation täydentää todellisuuttamme. Kopin’s stock has also been strongly in a tailwind since the summer.

[Kulumarauta]

Speaking of drones, we have an absolutely excellent company in the field domestically, Sensofusion. The company develops drone countermeasure technology, which is exactly what the doctor ordered for Western armies and police forces. Mikko Hyppönen switched to work there and stated in Sijoituskästi that he switched because he sees drone countermeasures as a more important future field than cybersecurity.

https://ruotuvaki.fi/-/suomalainen-uniikki-teknologia-mullistaa-elektronisen-sodankaynnin

Tällainen on Mikko Hyppösen työnantaja – suomalaisfirman keksintö voi...

Attached are the company’s revenue and profit:

One can wonder what the valuation might be on the stock exchange I can’t comment on the technology, but it’s already generating decent profit, unlike 1.71 billion Red Cat or 3.59 billion Ondas. Waiting for this to be listed on the Helsinki Stock Exchange. Nah, let’s leave city warehouses and postal services to domestic private investors and rather sell these to the big boys

[Sijoittaja-alokas]

Red Cat’s third quarter was exceptionally strong. The company significantly raised its full-year outlook. Growth comes especially, of course, from the defense and security sector, where contracts with the U.S. military are expanding, and the products have also gained a strong foothold among U.S. allies. The company is increasing production of drone and marine systems to meet rapidly growing demand.

Management emphasizes that operational efficiency is improving, and the balance sheet is now significantly stronger than before. Cash reserves, inventories, and receivables provide leeway to implement major military projects, develop new USV business, and consider potential acquisitions of technology companies to accelerate international growth.

https://x.com/earnings_guy/status/1989077182363193718

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Company’s Own Materials

[Thiebault]

Things are happening in the US drone sector, and several noteworthy catalysts have emerged in the industry recently.

The FCC (Federal Communications Commission) just updated foreign-made drones and their critical components to the Covered List, which effectively prevents the import, sale, and FCC certification of new Chinese drone models in the US—specifically DJI (Dà-Jiāng Innovations, the world’s largest drone manufacturer, with a global market share ranging from 70-95% depending on the sector) and Autel (Autel Intelligent Technology Corp). Older, already approved models may remain on the market and can still be used.

FCC press release. Certification of foreign (i.e., Chinese) drones is no longer possible in the US:

This is likely a highly significant long-term catalyst for American and NDAA-compliant (National Defense Authorization Act) drone manufacturers, as the certification ban essentially forces authorities, companies, and the defense sector to opt for US-made drone alternatives and manufacturers to use domestic critical components.

The “Restoring American Airspace Sovereignty” and “Unleashing American Drone Dominance” orders emphasize the US drone industry and reduce dependence on foreign equipment/parts. Meanwhile, growing defense budgets, international conflicts, major events (e.g., 2026 FIFA World Cup, 2028 LA Olympics), and other security needs are increasing demand for tactical and surveillance drones, among others.

We will likely start seeing the first effects in January as companies begin reporting their order backlogs alongside their Q4 announcements. AI integration, autonomous systems, swarm technology, and 5G connectivity + new model releases will further expand the US drone offering in the future.

The most likely short-term beneficiaries are so-called smaller, partly speculative Pure Play companies, as well as more established growers, including Kratos, AeroVironment, Red Cat, Draganfly, Unusual Machines, and Ondas Holdings, which offers 5G/autonomy. Manufacturers of critical components will also benefit.

Below is my own drone-related watchlist:

The FCC announcement and the administration’s executive order have been “front-run” for a couple of days now with significant gains. It seems that after the initial jump, there was a bit of a “Sell The News” phenomenon, as news had been anticipated since last week. Thus, the announcement wasn’t a major surprise to the market. However, stocks didn’t drop significantly either, so the strength could well continue once orders start appearing.

Going forward, new orders and future contracts will primarily be directed toward US drone companies. Upcoming announcements of new contracts should provide a tailwind as they appear, and these are expected in the near future once the situation clarifies. Several stocks are still 25-50% below this year’s highs after the jump over the past couple of days, although they are still not cheap in light of current multiples, and volatility is significant. However, the sector received a necessary long-term additional driver from today’s announcement.

[eM86]

Very good news indeed for the sector, and there is certainly a lot of excitement while waiting for the companies named for the 2026 FIFA World Cup and the 2028 LA Olympics (I myself have a significant stake in ONDAS/Unusual Machines).

[Sijoittaja-alokas]

Below is an article about how Barclays estimates the drone market will grow strongly, reaching up to $250 billion by 2035.

This development is accelerated by the introduction of AI into unmanned aerial vehicles, which shifts the industry’s focus from hardware to software, computing power tasks, and data centers. Additionally, drones are transforming defense and highlighting the increasing strategic importance of energy, minerals, and technology.

As the race to deploy autonomous swarms intensifies, the geopolitical significance of the drone industry is reaching a fever pitch. The ability to deploy low-cost, high-impact technology at scale is providing a tactical advantage that traditional platforms struggle to match.

Investors are closely watching the minerals and energy bottleneck, as the massive power requirements for AI data centers and the demand for specialized components could dictate the pace of innovation through the next decade.

https://www.investing.com/news/economy-news/drones-are-now-expected-to-become-a-250-billion-market-by-2035-4586447

[PorssiPatruuna]

@Kulumarauta

When talking about drones, we have a brilliant company in this field right here at home: Sensofusion

The Sensofusion case - Heading to Hesuli (Helsinki Stock Exchange) in December with a “share issue of hundreds of millions”

- Drone defense company

- With a full “kill chain,” meaning the entire spectrum of drone defense and new innovations on the way

- The company’s 2025 figures will be published in June

- Revenue growth has been in the range of “tripling in three years”

- “Made a strong profit in 2024”

- Follow-up measures include the pricing of the share issue, which is tentatively planned as an operation worth hundreds of millions

- Cooperation with Ukraine, a superpower in the drone industry; a production facility opened in Canada, and one coming to the UK

- Total market = TAM (total addressable market) €13 billion by 2030

So, first we wait anxiously for the summer results and then the pricing of the share issue A company like this certainly brings that famous vitality to Hesuli, which has already started to pick up anyway.

Satojen miljoonien arvoinen suomalaisyhtiö on droonintorjunnan huippua –...