The increasing prevalence and expanding applications of drones are expected to drive growth across both civilian and military sectors, making drone stocks a sector to watch closely for investors.
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This month, Ukraine’s army chief noted that drones could provide the country with an advantage over a numerically superior adversary.
Changing the Military Landscape
The growing reliance on drones by both Russia and Ukraine has moved the battlefield to key infrastructure and military targets deep inside their territories. Ukraine is creating a separate branch within its armed forces focused on drones. Over the past two years, drones have become more efficient and capable of traveling farther than ever before. Ukraine has also efficiently used sea drones to damage Russia’s Black Sea fleet in Crimea.
In the U.S., the Pentagon has opened a drone warfare school to train soldiers on countering this threat. The U.S. and the U.K. are also looking to supply AI-enabled drones to Ukraine. According to the Wall Street Journal, a coalition of countries aims to supply nearly a million drones to Ukraine within a year.
Explosion in Civilian Use
In civilian use cases, companies such as Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN), and DoorDash (NASDAQ:DASH) are increasingly using drones for deliveries. One of the names at the forefront of this uptick is Wing, a unit of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL). Walmart has also been rapidly expanding its drone operations in the Dallas, Fort Worth region recently.
What Is the Best Drone Stock to Buy?
Some of the top drone names to keep an eye on this year include Kratos Defense (NASDAQ:KTOS), AeroVironment (NASDAQ:AVAV), Textron (NYSE:TXT), and Joby Aviation (NYSE:JOBY). All of these stocks have delivered impressive price gains over the past year. However, the TipRanks Comparison Tool indicates the highest potential upside of 39.2% in Joby Aviation over the coming 12 months.
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