Drones poised for takeoff? US government plans to inject funds into multiple companies
Trump makes big move! Targeting the drone sector with planned equity investments—which related stocks could benefit?
Trump is turning his attention to drones once again.
According to The Wall Street Journal, citing informed sources, the Trump administration is advancing financing agreements with a group of drone companies as part of its efforts to boost domestic U.S. production capacity and reduce costs. These potential agreements, following months of negotiations, involve a range of privately held drone firms with diverse backgrounds as well as the U.S. Department of Defense. Discussions also include the Office of Strategic Capital—a lending facility established by the Biden administration to fund companies deemed critical to national security supply chains. Some of the deals may combine both debt financing and equity investment, meaning the U.S. government would take partial ownership stakes in these companies.
Sources say companies on the Pentagon’s potential funding list include Performance Drone Works, which previously won a contract to supply reconnaissance drones to the U.S. Army, and drone component supplier $Unusual Machines (UMAC.US)$ , in which Donald Trump Jr., son of former President Trump, is a shareholder and member of the advisory board; and Neros Technologies, a Sequoia Capital-backed startup focused on developing small first-person-view (FPV) drones.
Boosted by this news, $Unusual Machines (UMAC.US)$ shares jumped more than 20% in after-hours trading, $Red Cat Holdings (RCAT.US)$ rose over 12%, $Ondas (ONDS.US)$ and climbed more than 8%.
At this point, many fellow investors are probably wondering which drone-related stocks are worth watching right now, what each company actually does, and how Trump’s involvement might impact them. We’ll break it all down below.
Which drone-related concepts are worth watching?
previously“Hidden Winners Under the U.S. Election! The Trump 2.0 Era Is Approaching—Could Drone Stocks Surge in the U.S. Market?”、2026 Outlook | When the Sky Becomes the New Gold Mine: How AI Is Reshaping the Drone Industry Chain—These Stocks Are Worth Watching!Several previous articles have indicated that U.S. drone-related stocks could see explosive growth during Trump's second term.
Specifically, current drone-related stocks can be categorized intomilitary drones, civilian/commercial drones, electric vertical takeoff and landing aircraft (eVTOL), and drone software, among others.We will now analyze the business models of these companies one by one.
Military drone companies include $AIRO Group (AIRO.US)$ 、 $Kratos Defense & Security Solutions (KTOS.US)$ 、 $AeroVironment (AVAV.US)$ 、 $Northrop Grumman (NOC.US)$ 、 $Red Cat Holdings (RCAT.US)$Wait.AIRO Group is a technologically differentiated and diversified company focused on 21st-century aerospace and defense opportunities. Leveraging decades of industry experience and extensive relationships in the drone, aviation, and avionics markets, the company delivers leading solutions to global markets.
The company operates four segments: Drones, Avionics,、Training,andElectric Air MobilityThe combined total addressable market for these four segments is projected to exceed $315.4 billion by 2030.
AIRO Group's primary revenue comes from drone-related businesses,The company has already deployed equipment in NATO and EU countries and has participated in live combat testing during the Ukraine conflict.Its drones are equipped with AI capabilities, enabling them to perform reconnaissance, target identification, and strike coordination missions; their artificial intelligence functionality makes them extremely difficult to shoot down.
AIRO Group Chairman Kathuria stated:
Modern warfare has been completely transformed by drones. Of course, we hope Iran and Israel resolve their differences peacefully, but such tensions actually heighten investor interest in the aerospace and defense sectors.
Kratos Defense & Security Solutions, founded in 1994, primarily provides mission-critical products, services, and solutions to the U.S. government. Its technological strengths include satellite communication systems, electronic warfare, unmanned control systems, and cybersecurity, delivering information technology products and wireless communication systems to the U.S. Department of Defense, Department of Homeland Security, and various industrial clients.
The company operates through six business segments: Unmanned Systems, Microwave Electronics, Space & Training and Cybersecurity, Defense and Rocket Support Services, Turbine Technologies, and C5ISR Systems.
Kratos has a significant presence in the unmanned systems domain,covering unmanned aerial systems (UAS), unmanned ground systems (UGS), and unmanned surface vehicles (USV).These systems are widely used in military, intelligence, and national security domains.
Unmanned Aircraft Systems (UAS): Include high-performance drones with reconnaissance, surveillance, strike, and training capabilities.
Unmanned Ground Systems (UGS): Unmanned ground vehicles used for combat or support missions. For example, Ukraine has recently begun extensively deploying unmanned combat vehicles for tasks such as mine clearance, reconnaissance, ammunition transport, and suppression of enemy infantry.
Unmanned Surface Vessels (USVs): Unmanned maritime vessels (commonly known as 'ghost fleets') designed for maritime reconnaissance and surveillance missions.
AeroVironment is a global leader in military and commercial Unmanned Aircraft Systems (UAS), specializing in small UAS and tactical missile systems. It is a primary supplier of small UAS to the U.S. military and its allies.Known for systems such as the Switchblade loitering munition and the Puma reconnaissance drone. The company typically holds solid government and military contracts.
The company gained significant prominence during the 2022 Russia-Ukraine conflict as its products were rapidly adopted by NATO. Its offerings include small drones, ground robots, and support services such as training and maintenance.
Notably, starting in May 2025, following AeroVironment’s major acquisition of BlueHalo, the company restructured its operations into two business segments: Autonomous Systems, and Space, Cyber and Directed Energy.
The Autonomous Systems segment includes:Unmanned aerial systems, defense systems, unmanned ground and maritime systems, loitering munition systems, and MacCready Works.
Among these, MacCready Works is AeroVironment’s innovation and R&D division, focused on integrating autonomy, AI, and advanced platform technologies to deliver next-generation operational capabilities.
The Space, Cyber, and Directed Energy segment includes:Space technology, directed energy solutions, cyber solutions, and mission services.
Northrop Grumman is one of the largest producers of weapons and military technology in the United States, specializing in military aircraft, space, and defense technologies. It manufactures the majority of U.S. bombers and supplies fighter jet components to other companies. In addition to being a leader in U.S. aerospace stealth technology, it also plays a significant role in several space programs.
Northrop Grumman is one of the leaders in unmanned aerial vehicle (UAV) technology. Its renowned RQ-4 Global Hawk UAV is among the world's most advanced high-altitude, long-endurance reconnaissance drones, widely used for military surveillance and intelligence gathering. The company also developed the X-47B unmanned combat aircraft, a carrier-based drone that represents the future direction of UAV technology.
Red Cat Holdings is a company focused on military and commercial drones, with subsidiaries Teal Drones and FlightWave Aerospace offering diverse drone hardware and software solutions. The company previously collaborated successfully with Palantir to integrate AI-powered Visual Navigation (VNav) technology into its drones.
The company’s most notable asset is its flagship product—Black Widow.This compact unmanned surveillance and reconnaissance system has won a contract under the U.S. Army’s Short Range Reconnaissance program.
Notably, Red Cat operates in the rapidly growing drone industry, particularly in military and government applications. Driven by technological innovation and rising global demand, this sector demonstrates significant market potential, especially for drones used in reconnaissance, surveillance, and precision strike missions.
The U.S. Army's recent Short Range Reconnaissance (SRR) program has been a key catalyst driving demand for drones. Red Cat's Black Widow drone won this program, generating order demand for the company.
In addition,Red Cat Holdings also announced its official entry into the maritime autonomous systems market, expanding its multi-domain defense systems into the maritime domain.The company integrates aerial drones with autonomous maritime platforms to produce unmanned surface vessels. It plans to manufacture a 7-meter-long 'Expeditionary Multi-Purpose Vessel' in last year’s third quarter, featuring 'greater payload capacity, longer endurance, and enhanced firepower,' and will enable seamless interoperability with the company’s aerial unmanned platforms to jointly build a multi-domain intelligent combat system, supporting the U.S. and allied forces in strengthening their maritime defense industrial base.
Civil/commercial drones include $Ondas (ONDS.US)$ 、 $Draganfly (DPRO.US)$ 、 $ParaZero Technologies (PRZO.US)$ 、 $AgEagle Aerial Systems (UAVS.US)$Wait.Ondas Holdings focuses on an 'industrial-grade wireless communications platform,'providing solutions that connect devices, sensors, and networks for enterprise and government customers across sectors including IoT, smart infrastructure, public safety, logistics, and industrial automation.
Ondas Holdings is a leading provider of private wireless data solutions, offering wireless data services through its wholly owned subsidiary Ondas Networks Inc., and commercial drone solutions through its wholly owned subsidiaries American Robotics, Inc. and Airobotics Ltd. This segment operates as an independent business unit named Ondas Autonomous Systems.
The Ondas Autonomous Systems business unit delivers solutions through the Optimus System™️and the Scout System™️ and Raider™️ (collectively referred to as 'Autonomous Drone Platforms') designs, develops, and sells commercial drone solutions.
Optimus System™️ is the world’s first FAA-certified small Unmanned Aircraft System (sUAS), developed specifically for aerial security and data collection;while Iron Drone Raider™️is an anti-drone system,designed to counter the growing threat of hostile drones.
The Optimus and Iron Drone Raider platforms are highly automated, AI-driven drone systems capable of continuous remote operations, marketed as integrated 'drone-in-a-box' security and data solutions. They are deployed in critical defense, industrial, and government applications requiring security, data collection, and information processing.
Furthermore, it is worth noting that,Iron Drone Raider is an advanced, patented counter-drone solution,Designed to protect assets from enemy drone attacks in complex environments while minimizing collateral damage, Iron Drone is a fully autonomous interception system that reduces human involvement, enabling more efficient, persistent, and cost-effective detection, classification, and neutralization of hostile drones—overcoming the limitations of traditional counter-drone systems.Recently, Ondas successfully completed government-led counter-drone pilot programs in Europe and Asia, paving the way for long-term homeland security deployments.
Overall, Ondas’ drone segment focuses on commercial applications, particularly in industrial monitoring and network communications, including logistics delivery, energy pipeline inspection, and agricultural monitoring.As a provider of wireless data solutions, the company holds advantages in long-range communications and large-scale drone operations.
Draganfly is a pioneer in the drone industry, specializing in the design and development of advanced unmanned aerial systems. The company was among the first to deploy drones for life-saving missions,and developed the world’s first quadcopter drone.
Draganfly offers a variety of drone platforms and technologies,suitable for aerial photography, film production, public safety, industrial inspection, and agricultural surveying.The company excels in engineering and R&D; its drones are equipped with advanced flight control systems, high-resolution cameras, thermal imaging technology, and autonomous flight modes, enabling users to capture high-quality imagery and data to meet diverse professional needs.
However, this year, Christopher C. Miller, former Acting U.S. Secretary of Defense during the Trump administration, joined the company's board of directors. July 22, 2025,Draganfly also announced a strategic contract with the U.S. Department of Defense,to supply its Commander 3XL multirotor drone—a long-endurance multirotor specifically designed for ISR, light logistics, and advanced reconnaissance.
The Pentagon selected the Commander 3XL primarily to acquire autonomous tactical ISR capabilities, addressing the urgent need for forward-deployed, real-time intelligence under the emerging 'multi-domain operations' concept.
This acquisition reflects the growing importance of lightweight drones in modern military systems.It also highlights a deeper trend: tactical drones are becoming critical tools for achieving information and logistical superiority on the modern battlefield.
ParaZero Technologies is an Israeli aerospace company specializing in safety systems for defense and commercial drones, as well as urban air mobility aircraft.
The company primarily designs, develops, manufactures, distributes, and sells autonomous parachute safety systems for commercial drones. Additionally, it offers the SafeAir system, an intelligent parachute solution that continuously monitors unmanned aerial system (UAS) flights in real time, detects critical failures during emergencies, and automatically deploys the parachute.
Moreover, as drone technology becomes increasingly widespread and subject to misuse, counter-drone systems have become essential for protecting critical assets and personnel. ParaZero’s DefendAir system provides an efficient, safe, and highly adaptable solution, leveraging its unique net-based interception technology and modular design.
Notably, the company announced on Tuesday that it has received marketing approval from Israel’s Defense Export Controls Agency (DECA)to integrate and sell its DropAir precision airdrop system with Steadicopter’s drone platform.
The agreement allows both companies to market their joint solutions to customers across global commercial, defense, and humanitarian sectors.The system is designed to deliver medical supplies, tactical equipment, and humanitarian aid in complex terrain.
AgEagle Aerial Systems is a globally recognized pioneer in the drone industry, offering integrated solutions of high-performance flight hardware, sensors, and software.
The company's eBee TAC tactical mapping drone features an advanced imaging system that ensures high-precision data collection and supports real-time data processing, making it widely used in precision agriculture and crop management.
AgEagle’s drone solutions span multiple industries, including agriculture, environmental protection, and sustainability. Additionally, AgEagle has further solidified its position in the drone industry through key partnerships. For example, its collaboration with Agribotix leverages advanced drone technology to enhance precision agriculture, delivering high-quality aerial imagery and data analytics for crop management.
Additionally, the company has partnered with the Kansas Department of Transportation to apply drone technology to infrastructure inspections and other transportation-related applications.
Another point worthy of investor attention is that although the company primarily serves the agricultural sector,this year its eBee TAC received Blue UAS certification,which qualifies the company to be procured by the U.S. Department of Defense and other federal agencies, indicating that its drones meet the Department of Defense’s required security and performance standards. The company’s CEO believesthis is a transformative moment, enabling the company to provide military forces with the equipment and technology needed to address modern battlefield threats.
Electric vertical takeoff and landing (eVTOL) aircraft include $Joby Aviation (JOBY.US)$ 、 $Archer Aviation (ACHR.US)$ 、 $Eve Holding (EVEX.US)$ 、 $EHang (EH.US)$ 、 $Vertical Aerospace (EVTL.US)$ 。Electric vertical takeoff and landing (eVTOL) aircraft combine the convenience of helicopters with the efficiency of electric propulsion, offering people a convenient, fast, and environmentally friendly air travel option.
According to a MarketsandMarkets report, the eVTOL market was valued at $760 million in 2024 and is projected to reach $4.67 billion by 2030, growing at a compound annual growth rate (CAGR) of 35.3%. Ken Griffin, founder of Citadel Securities, holds shares in both JOBY and ACHR, betting on the vast commercial potential of the drone market.
Joby Aviation is a leader in the eVTOL sector,Its innovative technology and strategic market positioning have attracted significant investment from major players, including Toyota.
Joby’s strategic positioning is very solid. First, recognizing Toyota’s strengths in hydrogen energy infrastructure, Joby brought on the manufacturing giant early in its development. Additionally, Uber and Delta Air Lines have also invested in the company. Uber’s extensive experience in on-demand ground ride-hailing logistics and digital platform systems provides valuable insights for Joby Aviation’s air taxi operations, while Delta Air Lines’ partnership helps Joby launch ‘home-to-airport’ shuttle routes ahead of competitors.
Moreover, on August 5, it was reported that Joby Aviation will acquire Blade Air Mobility’s (Blade) passenger air transportation business for up to $125 million,to accelerate the deployment of electric air taxis for commercial service.
Moeller forecasts thatelectric aircraft from Archer and Joby are expected to receive certification from the U.S. Federal Aviation Administration (FAA) by 2026.
Archer Aviation was founded in 2018 and is headquartered in San Jose, California,The company aims to transform urban transportation by developing all-electric eVTOL aircraft to provide sustainable solutions for Urban Air Mobility (UAM).
Specifically, the company operates in the following three business segments:
Urban Air Mobility Solutions: Archer's eVTOL aircraft are designed specifically for urban air mobility, aiming to transport passengers quickly and safely across cities. The company seeks to alleviate traffic congestion and improve travel efficiency through its electric air taxi service. For example, its Midnight aircraft can complete a single flight in 10–20 minutes, replacing a car commute that would otherwise take 60–90 minutes.
Defense Applications Collaboration: In February 2024,Archer announced the formation of a defense division and partnered with Anduril Industries to develop a hybrid-electric propulsion variant based on the Midnight platform in response to a targeted solicitation from the U.S. Department of Defense.This move not only highlights the potential of its technology in the civilian market but also expands its application prospects in the military domain, thereby enhancing the company’s technological value and market competitiveness.
Customized Services: Archer also offers customized services, designing and manufacturing eVTOL aircraft tailored to clients' specific needs in urban air mobility, tourism, logistics, and other sectors. This flexibility effectively addresses diverse requirements and expands its market coverage.
Archer Aviation announced a partnership with $Palantir (PLTR.US)$ to establish an artificial intelligence foundation for the future of next-generation aviation technologies.
Additionally, Archer announced a comprehensive 'Launch Edition' commercialization plan for its Midnight aircraft. The plan aims to develop a practical and repeatable playbook to commercially deploy Midnight in dozens of early-adopter markets prior to FAA type certification of the aircraft. This approach is designed to enable Archer to accumulate operational expertise, generate revenue, and further strengthen long-term demand.
Eve Holding is a leader in developing next-generation urban air mobility (UAM) solutions and a spin-off subsidiary of Embraer listed on the stock exchange.
Specifically, they design and manufacture electric vertical takeoff and landing (eVTOL) aircraft. Additionally, they provide related maintenance, support services, and Urban Air Traffic Management (UATM) systems.
In summary, Eve Holding is committed to building a comprehensive urban air mobility ecosystem, offering end-to-end solutions from aircraft development to operations and maintenance.
EHang is a global leader in urban air mobility technology and the world’s first manned eVTOL company to receive China’s Civil Aviation Administration’s three core certifications: Type Certificate (TC), Production Certificate (PC), and Standard Airworthiness Certificate (AC). Its flagship product, the EH216-S autonomous aerial vehicle, has already begun commercial deliveries and operations. As the undisputed leader in the low-altitude economy, EHang is actively expanding into scenarios such as aerial sightseeing, urban transportation, logistics, and emergency response, and is currently one of the very few hard-tech companies globally capable of achieving a commercial closed loop for 'air taxis.'
Vertical Aerospace, a UK-based eVTOL developer, recently announced that it successfully completed the world's first inter-airport manned flight using a full-scale, winged tilt-rotor electric vertical takeoff and landing (eVTOL) aircraft.This milestone marks a critical advancement in the practical application of the company's electric aviation technology in real-world operational scenarios.
With the recent launch of its hybrid-electric aircraft models, Vertical Aerospace stated that its technology platform is now ready to deliver cleaner, quieter, and more adaptable aviation solutions for a range of government and military use cases. This signals broad application prospects for electric vertical takeoff and landing (eVTOL) aircraft in specialized transportation, logistics support, and other domains.
However, investors should remain cautious, as the company is burning cash at an alarming rate—net cash consumption reached $100 million in 2024 and is projected to increase to $110–125 million in 2025.
Drone software and core technologies include $Palladyne AI (PDYN.US)$ 、 $SES AI Corp (SES.US)$ 、 $Unusual Machines (UMAC.US)$WaitUnusual Machines primarily offers an integrated 'Drone-to-Cloud' drone rendering data center solution—combining GPU cloud rendering with real-time drone footage capture—for applications in film production, real-time simulation, and game development. It is a provider of drone data center (UDC) solutions designed specifically for cloud rendering.
Its business model combines hardware sales with cloud service subscriptions, primarily targeting users in the creative industries and military training simulation sectors. Previously, Donald Trump Jr., son of former President Donald Trump, became an advisor to Unusual Machines.
Palladyne AI is an artificial intelligence software developer focused on space orbital operations, industrial unmanned platforms, and defense applications. Last year, this software company, which specializes in autonomous robotic systems, announcedThe Palladyne Pilot AI software platform enables third-party drones to identify, prioritize, and automatically track terrestrial targets.
In 2024, Palladyne AI announced the successful maiden flight of a third-party small unmanned aircraft capable of identifying and prioritizing ground-based targets of interest, then interfacing with the drone’s autopilot software to autonomously track those high-priority targets.
Denis Garagic, Chief Technology Officer of Palladyne AI, emphasized that the company’s first autonomous flight using Palladyne Pilot successfully tracked and followed targets, demonstrating the effectiveness of its AI platform.
SES AI is a pre-commercial-stage company focused on developing and manufacturing high-performance rechargeable lithium-metal battery technology for applications in electric vehicles and urban air mobility.
In mid-September last year, SES AI announced a groundbreaking initiative on its official website aimed at accelerating materials discovery in the field of electric transportation. SES AI stated, 'By leveraging cutting-edge supercomputers optimized for artificial intelligence to map the universe of small molecules, this pioneering project aims to revolutionize the understanding of battery chemistry, enhance energy storage solutions, and advance energy-efficient technologies. The initiative will utilize Crusoe’s innovative and purpose-built AI cloud platform, powered by NVIDIA and Supermicro, showcasing a unique collaboration at the intersection of science, computing, and sustainable computing.'
In June last year, SES AI indicated it would no longer produce electric vehicle batteries, instead focusing on lithium-metal batteries for aerial applications such as drones and urban air mobility (UAM). The company has already secured drone customers.
Summary
In summary, funding and policy support from the Trump administration have created significant opportunities for the drone sector; however, investors should remain highly cautious about potential risks faced by most startups, including rapid cash burn, regulatory approval delays, and slower-than-expected commercialization. Priority should be given to companies with tangible orders and robust cash flow when making investment decisions.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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