Drones are becoming an integral part of our lives. Who would have thought that we could see drones flying around for daily life purposes? So, let’s have a look at the best drone stocks in this article!
In more recent years, drone technology has grown and the market has expanded. In earlier days, drones were heavily used for military use only but the technology is now available for commercial use as well.
There are 372,000 commercial drones and 500,000 non-commercial drones registered with the US Federal Aviation Administration. Whereas, it’s expected that the unmanned aerial vehicle (UAV) market will reach $58.4 billion by 2026.
On the other hand, the commercial demand for drones will also increase with time. Whether it’s deliveries from Amazon or inspections of your local telephone poles, the investment case for drones is that they have the potential to become integrated into our communities.
You guys might be interested to know some drone stocks that can add value to your investment portfolio. Therefore, we bring you the top five drone stocks that have potential in the long run.
The first drone stock on our list is EHang Holdings (EH).
EHang(EH)is a Chinese-based firm and provides the world’s leading autonomous aerial vehicle (AAV) technology. We began with a commercial drone company because you would see these commercial drones in your streets soon.
However, talking about EHang, the company is well-positioned as it has a solid customer base. EHang provides top-notch air mobility, which includes passenger transportation and logistics, smart city management, and aerial media solutions.
We’ve many projects going around the world where cities are working on introducing pilotless aerial taxis. For instance, Dubai is planning to support air mobility and soon, we’d see more cities following this concept of transportation.
EHang recently announced a strategic partnership with Shenzhen East General Aviation. This deal will allow EHang to explore and further implement urban air mobility operations for helicopters and AAVs in Shenzhen, China. Moreover, EHang will move one step closer to its 100 Air Mobility Routes Initiative in the Greater Bay Area.
Being a leading AAV firm, EHang’s future seems prominent and its stock price is yet to pump.
KratosDefense & Security Solutions
Moving on to the second top drone stock on our list is KratosDefense& Security Solutions (KTOS).
Kratos is a leading firm in combat and warfare weapons. Kratosmostly works in collaboration with the United States National Security services. The company develops directed-energy weapons, unmanned systems, satellite communications, missile defense, training, and combat systems.
Kratos came up as drone company on the world stage, when it announced the deal with Air Force in 2019. Goldman Sachs predicts that Kratos’ drone business could grow 10 times larger by 2025.
Kratos recently announced a new deal with the US Air Force. Its Unmanned Aerial Systems has secured a five-year contract worth $8.07 million for BQM-167A Air Force Subscale Aerial Target.
The president of Kratos Unmanned Systems Division, Steve Fendley, said this five-year contract represents a milestone in our target system business.
The United Stateshas the highestbudget fordefense system. As per Statista, the US government spent 778 billion on defense in 2020. Kratos, being a major contributor to the US defense, holds a strong market position.
The third top drone stock on our list is another defense contractor AeroVironment (AVAV).
AeroVironment is a leading contributor to the US defense. The company provides drones to the US Department of Defense and international allied governments. AeroVironment’s three major products are the Raven, Wasp, and Puma models. In total, the company produces around 10 UAVs.
AeroVironment also produces few drones for commercial use, however, most of its sales come from the military.
There are more powers growing around the world and every country wants to be ahead of its foe. Therefore, the military drone market will grow at a faster pace in the coming years.
Earlier in March this year, AeroVironment’s subsidiary, Arcturus AV, grabbed a $7 million deal with the US Special Operations Command. The contract is to last for one year of performance and is meant to provide mid-endurance UAS programs to the US Special Operations Command.
Apart from the following deal, AeroVironment has also bagged other deals, including a multi-year order worth $11.53 million. While another $80 million contract with the NATO Support and Procurement Agency for Puma 3 AE tactical UAS and initial spares packages.
The fourth drone stock to add to your portfolio is Boeing (BA).
Boeing is known for airline and fighter jets, but the company has emerged as a rising player in the drone market. Boeing has some suitable vehicles in its arsenal, which could make it a value drone stock.
The aerospace giant is building the MQ-25 Stingray aerial-refueling drone for the Navy. It will be the service’s first carrier-based drone. The MQ-25 made a successful flight and re-fueled a US Navy Boeing Super Hornet. This is great for Boeing to get into the drone business on the world stage.
The company has the budget to invest in its drone business. Boeing has a dedicated drone subsidiary, Insitu, which designs, develops, produces, and operates UAS. Another Boeing subsidiary Aurora Flight Sciences was among the teams competing in the recent Darpa’s AI dogfight competition.
There is substantial proof that Boeing is making its way into the drone business, and could be a potential winner in the long term.
AgEagle Aerial Systems
Last but not the least, we’ve AgEagle Aerial Systems (UAVS), which is fairly a small company.
Though AgEagle is small in valuation however, it has grown over the past years. The company was considered a penny stock by investors and the total valuation of the company was less than $10 million.
Then came the COVID-19 pandemic and AgEagle collaborated with Amazon for drone delivery services. This changed the face of the stock, and AgEagle shares soared by 1600% to $16 in February 2021. However, the stock has corrected since then.
AgEagle has made its name on the global stage and is already one of the leading commercial drone technology, services, and solutions providers. The company isn’t only cursing on the hardware side but is making a difference to the software too. They provide metrics, tools, and strategies that are needed to implement solutions through the use of the drone.
The primary goal of the company is to gain the trust of the people as it makes commercial drones. AgEagle is expanding its business and is making progress on the research front. Lately, AgEagle’s subsidiary, MicaSense, announced that it’s planning to expand its line of sensor solutions. MicaSense will launch its next generation of high-performance multispectral sensors. All-in-all, AgEagle seems solid among the other drone stocks in the market.