Military drones, or UAVs (unmanned aerial vehicles), are reshaping defense strategies worldwide. Their increasingly vital role in surveillance, reconnaissance, and combat operations is driving rapid growth in the global military drone market. The global military drone market was valued at approximately $13 – $15 billion in 2023. Analysts project the market to surpass $28 billion by 2030 and potentially reach $35 billion (source 1, source 2, source 3), translating to a strong CAGR of 10-15%, which is in line with many promising emerging tech sectors. This article delves into the top military drone stocks for 2024, ranked by pure play focus.
Note: This article focuses on military drone stocks. For commercial drones, see this article instead.
Tier 1: Pure-Play Military Drone Stocks
These companies have a singular focus: developing and manufacturing unmanned systems specifically designed for military missions. If you’re looking for direct exposure to the cutting edge of military UAV technology, these military drone stocks represent the most concentrated investment plays.
AeroVironment (AVAV): Battlefield-Proven Tactical Drones
AeroVironment (AVAV) is a leader in tactical battlefield solutions, delivering proven, small unmanned systems essential for frontline operations.
AeroVironment stands out as the undisputed leader in small, tactical drones. Their solutions are not just flying machines – they provide essential intelligence, surveillance, and reconnaissance (ISR) capabilities on the modern battlefield. This track record of innovation and reliability makes them a prime focus for investors seeking military drone stocks. Here’s their edge:
- Frontline Innovation: Consider their Switchblade 300 and 600 loitering munitions – essentially portable, precision-guided missiles launched from a tube. Systems like the Raven and Puma AE offer unparalleled versatility and rapid deployment for battlefield awareness. These are not just drones, they’re tactical tools extending a soldier’s reach.
- Proven Success: AeroVironment’s systems are deployed by the U.S. military and allies around the world. Their proven performance in real-world conflicts translates to reliability and confidence for military customers, a key factor driving ongoing contracts. For example, in 2023 they secured a $64.6 million contract for additional Switchblade 300 systems.
- The Future Edge: AeroVironment isn’t resting on past success. They’re continually developing new platforms, larger unmanned systems like the Jump 20, and advanced capabilities to match evolving threats and mission needs.
Investor Takeaway: AeroVironment sits at the intersection of proven military value and advanced innovation. Their focus on tactical solutions gives them a unique position in the military drone market–ideal for investors seeking companies with an established track record and continuous development potential.
Kratos Defense & Security Solutions (KTOS): Advanced Unmanned Jets
Kratos Defense & Security Solutions (KTOS) focuses on the future of combat drones with high-performance unmanned jet systems designed for military missions.
Kratos stands out for their aggressive development of high-performance, jet-powered unmanned systems intended primarily for military use. Their unwavering focus on uncrewed combat systems makes them a fascinating prospect for investors seeking exposure to the leading edge of military drone technology. Here’s what sets them apart:
- Unmanned Combat Focus: From their XQ-58A Valkyrie, designed as a stealthy ‘loyal wingman’ for fighter jets, to the Makos tactical drone, Kratos pushes the boundaries of what drones can achieve in the combat zone. Their drones aren’t just about surveillance, they’re about extending force projection.
- Affordable Innovation: Kratos has a philosophy of developing powerful systems by leveraging proven commercial technology. This approach is designed to deliver next-generation performance while reducing cost compared to traditional military development programs. A recent example is the UTAP-22 Mako, awarded a $50 million Air Force contract for further development.
- Beyond the Aircraft: Kratos isn’t solely about the drones themselves. They’re involved in ground control stations, communications, and training programs related to unmanned systems – making them a multi-faceted player in the sector.
Investor Takeaway: Kratos bets big on a future where unmanned systems play a key combat role. Their focus on affordability and innovation could position them to disrupt traditional defense programs. This makes them a high-risk, high-reward prospect for investors who understand the potential and uncertainty of cutting-edge military drone development.
Tier 2: Defense Contractors with Strong UAV Programs
These companies are the established giants of the defense industry. While not solely focused on drones, these companies hold significant resources and a proven track record of delivering high-tech military systems, making their drone divisions key players in the military drone stock landscape.
Northrop Grumman (NOC): High-Tech Drones, Trusted Legacy
Northrop Grumman (NOC) is a titan in defense technology, renowned for its large, advanced surveillance and combat drone platforms.
Northrop Grumman is a classic defense industry giant with a strong footprint in the military drone world. They are renowned for their large-scale, advanced surveillance and combat drones, serving as a major force behind high-tech military capabilities. Here’s how they stand out:
- Legacy of Unmanned Systems: Northrop Grumman’s drone expertise stretches back decades, most notably with their iconic RQ-4 Global Hawk and MQ-4C Triton high-altitude, long-endurance (HALE) surveillance platforms. These established systems underscore their experience in complex military drone technology.
- Focus on the Big Picture: While they do develop smaller platforms, Northrop Grumman is mostly about large, powerful unmanned systems. Examples include the stealthy batwing RQ-180, designed for long-range penetration, and the proposed MQ-25 Stingray for aerial refueling. They’re not aiming for battlefield ubiquity, rather focusing on strategic assets that provide unrivaled capabilities.
- Integrated Solutions: As a prime defense contractor, Northrop Grumman’s strength lies in integration. Their drones aren’t just standalone products; they fit into wider military systems and are supported by a vast network of technologies. A key example is their recent win on the Ground Based Strategic Deterrent (GBSD) program, worth an estimated $13.3 billion, where their capabilities with unmanned systems are likely to play a role.
Investor Takeaway: Northrop Grumman represents the established heavyweight in the military drone space. If you’re seeking exposure to companies leading the charge on technologically complex, and often high-cost, drone programs, they are a major player to consider.
Lockheed Martin (LMT): UAV Innovation from a Defense Giant
Lockheed Martin (LMT) is a diversified powerhouse with significant drone capabilities, offering a mix of innovation potential and stability.
As the world’s largest defense contractor, Lockheed Martin brings immense resources and expertise to the field of military drones. While not a pure-play drone company, their drone development programs span a wide range of sizes and applications, making them a significant force in the market. Here’s their edge:
- Broad Portfolio: From small scout drones like the Indago to the larger RQ-170 Sentinel surveillance platform, and even concepts like the SR-72 hypersonic aircraft, Lockheed Martin’s drone portfolio covers the spectrum of military needs. This breadth gives them exposure to various military drone market segments.
- Innovation Powerhouse: With vast R&D budgets, Lockheed Martin consistently pushes the envelope with advanced technologies. Examples include their work on AI-driven drone swarms and their Stalker VXE, a long-endurance surveillance drone. They also play a key role in the highly anticipated F-35 fighter jet, where integration with unmanned systems is likely to be a future focus.
- Trusted Partner: As a prime contractor for the U.S. military, Lockheed Martin enjoys close relationships with its biggest customer. Their reputation for delivering complex systems, like their recent $7 billion contract win for advanced radar production, demonstrates their reliability.
Investor Takeaway: Lockheed Martin offers investors a balanced profile. Their drone efforts provide exposure to a rapidly growing sector while being backed by the stability of a diversified defense giant. For investors seeking a major player with vast resources and experience behind their drone technology, Lockheed Martin warrants careful consideration.
Raytheon Technologies (RTX): Essential Systems for Military Drones
Raytheon Technologies (RTX) is a key supplier of essential drone technology – its sensors, weapons, and targeting systems are vital to a wide range of military platforms.
While Raytheon Technologies doesn’t build complete drones, they are a critical player in the military drone world. Their expertise in sensors, weapons systems, and related technologies makes them a key supplier for the drone ecosystem, underpinning the capabilities of a wide array of platforms. Here’s how they stand out:
- Focus on the Extras: Raytheon doesn’t aim to make the ‘sexiest’ drones, but rather the most capable. Their portfolio includes advanced radars like the KuRFS, electronic warfare systems like the Coyote EW, the Multi-Spectral Targeting System (MTS) used for precision targeting, and various precision-guided munitions like the Griffin and the Small Diameter Bomb (SDB).
- Integration Specialists: Raytheon’s systems seamlessly connect with drones from various manufacturers. This agnosticism gives them versatility and broad market exposure, unlike companies tied to specific drone platforms.
- Legacy of Excellence: Raytheon’s lineage includes companies with decades of experience in defense technologies. This heritage translates into trusted systems relied upon by the world’s militaries. A recent example is the $1-billion Patriot missile defense contract awarded to upgrade systems for Germany.
Investor Takeaway: Raytheon Technologies offers investors a different angle on the military drone market. Instead of betting on specific drone designs, they benefit from the broader growth of the sector as a critical supplier for a multitude of platforms and missions.
Elbit Systems (ESLT): Drone Platforms with Global Reach
Elbit Systems (ESLT) is an innovator with a global reach, specializing in reliable drone platforms and broader military technology capabilities.
Elbit Systems is a prominent defense company with a significant presence in the drone market. While their technology portfolio covers a broad range of military systems, their expertise in unmanned systems makes them an intriguing player for investors. Here’s what sets them apart:
- Unmanned Specialists: Elbit’s drone offerings range from small surveillance systems like the Skylark to larger platforms like the Hermes 450 and Hermes 900. Their focus on proven designs and continuous upgrades makes them a reliable choice globally. These drones have seen action in various conflicts, like Azerbaijan’s use of the Hermes 900 in the 2020 Nagorno-Karabakh conflict.
- Broad Military Focus: While drones are central to their business, Elbit Systems also supplies a vast array of other military systems. This broader base might offer some stability against market shifts within the drone sector.
- International Appeal: Elbit Systems enjoys success in the global market, exporting their drones to countries worldwide. Recent contracts include a $68 million deal to supply Hermes 900 drones to the Swiss Armed Forces and a $153 million contract for Skylark I-LEX drones for an undisclosed Asian country.
Investor Takeaway: Elbit Systems provides exposure to a well-established player in the drone industry with a strong international footprint. Investors looking for a mix of drone-specific exposure and exposure to the broader military technology market may find value in their profile.
L3Harris Technologies (LHX): Versatile Military Tech, Drone Focus
L3Harris Technologies (LHX) is a multifaceted defense contractor offering a mix of drone solutions and expertise in sensors and electronic warfare.
L3Harris Technologies, similar to Elbit Systems, is a major defense contractor with a broad technology portfolio and a significant presence in the military drone domain. While not a pure-play drone manufacturer, their offerings make them worth considering for investors seeking multifaceted exposure. Here’s how they stand out:
- Focus on Versatility: L3Harris develops various unmanned systems. For smaller platforms, there’s the FVR-90, a hybrid VTOL (Vertical Take-off and Landing) drone. For combating drone threats, their VAMPIRE counter-UAS system has gained recent attention. They were awarded a $40 million contract for VAMPIRE systems deployed in Ukraine.
- Sensor & System Expertise: L3Harris also specializes in sensors, communications, and electronic warfare systems—all crucial components for military drones. Their expertise in these areas sets them apart as key players in drone development and operation.
- Proven Track Record: Formed through a recent merger, L3Harris combines the legacies of respected defense contractors. Their track record of delivering complex military systems adds a level of confidence for investors.
Investor Takeaway: L3Harris offers a balanced approach to military drone investment. While a portion of their business relies on drone technology, their broader portfolio brings an element of diversification and stability—appealing to investors seeking a less risky exposure option.
Tier 3: Key Suppliers & Military Drone Enablers
These companies might not build the drones themselves, but their technologies are the backbone of modern unmanned systems. From advanced sensor systems to powerful processing chips, Tier 3 military drone stocks provide the essential components that enable the technology to work.
Ambarella (AMBA): AI-Powered Chips for Drone Vision
Ambarella (AMBA) provides the heart of modern drone vision – its AI-powered video processing chips are essential for drone-based intelligence and targeting.
Ambarella might not be a household name, yet they play a crucial role in the military drone world. Their expertise lies in advanced video processing chips, which are the brains enabling drones to capture and analyze high-resolution imagery. Here’s why they are significant players:
- Chip Specialists: Ambarella’s focus on video processing sets them apart. Their CVflow® family of chips powers everything from small drones to advanced surveillance platforms. This specialization makes them critical to a wide range of military drone applications.
- Cutting-Edge Technology: Ambarella emphasizes AI-powered chips, like their CV2FS and CV5S, for enhanced image processing capabilities, such as object detection and target tracking. These features are key to modern “intelligent” military drones.
- Broad Customer Base: Ambarella partners with various drone manufacturers, including prominent players like AeroVironment and Elbit Systems. This broad base gives them wider exposure to the military drone market’s growth.
Investor Takeaway: Ambarella offers a unique investment angle into military drones. While they don’t make the drones themselves, their technology is essential to modern military drone capabilities, making them a critical link in the supply chain.
Teledyne Technologies (TDY): Thermal Imaging Legacy
Teledyne Technologies (TDY) acquired FLIR Systems to bring thermal imaging into a broader defense technology portfolio.
Teledyne Technologies is a diversified technology conglomerate with a significant presence in aerospace and defense. Their 2021 acquisition of FLIR Systems for $8 billion bolsters their position in sensors and imaging systems vital to military drones.
- Sensor and Imaging Powerhouse: Teledyne’s expertise lies in advanced cameras, sensors, and image processing, extending the capabilities of military drones. Examples include infrared cameras and radar systems.
- Broader Portfolio: Teledyne’s involvement in various defense technologies, from undersea systems to space imaging, adds stability to their position within the drone market.
- Legacy of FLIR: Their acquisition means FLIR’s thermal imaging technology, like their Boson thermal camera core, now falls under Teledyne’s umbrella.
Investor Takeaway: Teledyne offers investors broader exposure to the defense sector while maintaining a strong stake in the thermal imaging and sensor technologies essential for military drones. While not exclusively focused on drones, their diverse portfolio and FLIR’s legacy offer exposure to this sector.
Curtiss-Wright (CW): Reliable Power & Control for Military Drones
Curtiss-Wright (CW) supplies the power and control behind drone performance – its motors and actuators bring military drone designs to life.
Curtiss-Wright specializes in various components critical for drones, including motors, actuators, and specialized electronics. While not a flashy drone manufacturer themselves, they play a crucial role in enabling military drone performance and reliability. Here’s how they stand out:
- Essential Components: Curtiss-Wright focuses on the ‘nuts and bolts’ of drones. Their Exlar® actuators control critical drone movements, and their rugged motors are used in propulsion systems. These components are essential for successful drone operation.
- Trusted Legacy: Curtiss-Wright has a long history in the aerospace and defense industry. This experience translates into reliable components that meet the rigorous demands of military drone operation.
- Broad Portfolio: Curtiss-Wright doesn’t just supply drone-specific components. Their involvement in various aerospace programs adds stability and diversification to their business. For example, they were awarded a $288 million contract in 2022 for nuclear aircraft carrier components.
Investor Takeaway: Curtiss-Wright offers investors a way to participate in the military drone market without betting entirely on individual drone manufacturers. Their focus on vital components gives them exposure to the sector’s broader growth.
Mercury Systems (MRCY): Secure Computing for Mission-Critical Drones
Mercury Systems (MRCY) provides the computing brains of military drones – its secure processing systems are critical for data-driven intelligence and decision-making.
Mercury Systems is a vital player in mission-critical computing for military drones, specializing in secure processing systems. Their technology allows drones to gather data, make decisions, and communicate in complex, high-threat environments. Here’s how they stand out:
- Advanced Processors: Mercury Systems develops secure, high-performance processors, such as their BuiltSAFE™ product line, specifically designed for mission-critical military applications. Their focus on ruggedness and reliability ensures performance in the harshest environments.
- Data-Driven Missions: Mercury’s systems enable real-time data processing and analysis on board drones. For example, their recent work on the OpenVPX architecture aims to streamline AI processing and data fusion for drones.
- Trusted Integrator: Mercury Systems collaborates closely with military contractors and drone manufacturers. Examples include their partnership with AeroVironment on the Switchblade drone, and their recent contract win valued at approximately $25 million to supply processing solutions for the MQ-25 Stingray.
Investor Takeaway: Mercury Systems provides investors exposure to a niche but essential aspect of military drone technology. Their computing systems are increasingly in demand as drones become more sophisticated.
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The military drone sector is booming, fueled by advancements transforming modern warfare. With market growth predicted to exceed $28 billion by 2032, it presents a compelling opportunity for investors seeking exposure to cutting-edge defense technology. Investors should carefully consider their risk tolerance. The military drone market offers the potential for significant growth but comes with a higher risk profile. Research into individual companies and the broader industry is important for informed decision-making.
