Getting Rich with Drones
535: The rise of drone warfare and the stocks positioned to benefit
Morning guys hope you had a solid weekend.
As I write this Sunday evening, there’s some interesting developments afoot.
Gold has continued to soften while Bitcoin has moved back to the $73,000 range. Oil is up again after the US strikes on Iran’s Kharg Island.
But today I want to address the elephant in the room (and ideally before market open).
One of the biggest military revolutions happening right now isn’t nuclear weapons, aircraft carriers, or even hypersonic missiles.
It’s drones. Not only does it offer us an insane financial opportunity in the coming years but all of the tech that we see exploding alongside it (and the drones themselves) is going to change the face of warfare and society permanently.
Defense spending in general is exploding. The U.S. alone is now spending over $900 billion annually on defense, with an increasing share going toward:
autonomous systems
counter-drone defenses
AI battlefield intelligence
unmanned aerial platforms
The U.S. defense budget for FY2026 is projected to exceed $1 trillion.
You want to fade that kind of spend? Buy some more Coca Cola shares?
Ukraine, Israel, Taiwan, and NATO countries are all rapidly expanding their drone programs. While Ukraine may have taken the back seat to more recent conflict in Venezuela and now the Middle East, it is still chugging along.
Ukraine turned drones into what many analysts call “precision mass.”
Cheap FPV (First-Person View) drones that often cost just a few hundred dollars, are now destroying tanks, artillery systems, and armored vehicles worth millions. Production scaled rapidly. Ukraine has already produced millions of drones, with plans to manufacture several million per year as their war continues.
In Venezuela with the US raid to capture Maduro, ahead of the ground operation, unmanned systems were used for surveillance, intelligence gathering, and precision strikes against key military infrastructure such as radar systems and air defenses.
These platforms helped map the battlefield and clear a path for the helicopters and special operations forces that ultimately carried out the assault.
Now in the revived Middle East conflict, Iran is launching Shahed drones at will, Israel is launching precision strikes, and the US is demonstrating some serious military capability in multiple regions.
This weekend the defense sector and drone space saw some major developments.
Defense startup Anduril Industries secured a U.S. Army contract worth up to $20 billion, focused on autonomous systems and AI-driven battlefield technology, one of the clearest signals yet that the Pentagon is betting heavily on drones and autonomy.
Taiwan is another flashpoint where drones are quickly becoming central to modern warfare (especially this week with reports of posturing in the region).
China has been steadily increasing military pressure around the island over the last three weeks and over the last year conducting large scale exercises that simulate blockades and coordinated air and naval attacks. Chinese fighter jets and warships now routinely operate near Taiwan’s airspace and waters, often in large numbers, in what most analysts view as rehearsals for a potential future conflict.
Yeah, people have been saying this is inevitable for some time, BUT with the recent Iran developments and pressure on Chinese oil now, a new variable enters that standoff.
Taiwan has responded by accelerating its asymmetric defense strategy, investing heavily in drones, loitering munitions, and autonomous systems.
Rather than trying to match China ship for ship or tank for tank, the goal seems to be to deploy large swarms of cheap, expendable drones capable of targeting landing craft, armored vehicles, and supply lines during any attempted invasion.
You can’t read a single story about modern geopolitics or conflict without drones popping up. Last week Ondas Holdings ONDS 0.00%↑ announced a strategic partnership with Palantir PLTR 0.00%↑ and aerospace firm World View aimed at building an AI enabled intelligence and surveillance platform that connects drones, ground systems, and high-altitude sensors into a unified network.
We even got an FBI bulletin alleging that Iranian at one point had planned strikes on California utilizing drones. Remember the big drone debacle in New Jersey we never got a single answer on?
This all comes amid reports of a new Trump administration UFO disclosure coming.
I only mention that because the intersection of UFOs, drones, and advanced military tech keeps ramping up in public discourse. Think about it, if we know about Reapers and basic drones, what kind of tech do we not know about?
On top of everything else I talk about here regularly that make up the future of finance, markets, and capitalism (tokenization, crypto, AI, tech, etc.) it is evident to me now that defense and exposure to drones and adjacent technology is table stakes at this point. The growth is going to be explosive (no pun intended).
You’re no longer just betting on major defense contractors to play in the sandbox forever or for Halliburton to finance every aspect of a 15 year conflict.
The industry is being turbocharged quickly at a time when most normies are just upset the S&P is wobbly or crypto is down. I can see it online. The hype and attention are growing….
Let’s put some numbers out there.
The global military drone market is estimated to be worth tens of billions of dollars today and could approach $100 billion over the next decade as defense spending shifts toward unmanned systems and autonomous warfare (Grand View Research).
When you include the broader ecosystem, all the commercial drones, sensors, autonomy software, counter-drone systems, and supporting infrastructure, the overall global drone market could exceed $100 billion by 2030 and potentially reach well north of $150 billion as adoption accelerates (Military Embedded Systems/ GlobeNewswire).
We are going to see drones used in many different capacities in our lifetimes so it makes sense to ensure you are positioned to capture some of the upside.
Cheap, autonomous, AI enabled drones are rapidly reshaping how wars are fought. And the implications for investors (and the world we live in) are massive. Don’t pass this up as a fad or “hype” cycle.
We were ahead of the broader defense rally over the last two years making subs some solid gains, but today I want to expand past the classic plays of the global war on terror and get into drone specific companies.
Some of these companies are small caps most investors have never heard of. Others are quietly becoming the backbone of the next generation of warfare.
Let’s break down the companies worth watching.