Warfare and its cousin diplomacy have always been based on numbers, money and technology. Countries and coalitions are constantly planning for the right mix.
Expensive and vulnerable aircraft carriers, Destroyer battleships, tanks, and fighter jets are still relevant, but the age of rockets, missiles and drones is upon us.
Normally, the size, cost and range between these three projectiles are huge, but distinctions between them are becoming more and more blurred.
Russia and Ukraine are building and launching millions of drones at each other each year. There are now large zones where no man can enter without being quickly destroyed by drones. Ukraine reports that it deployed drones for 80% of the targets it destroyed last year. Then there is the burgeoning business of counter-drones and counter-drone systems.
NATO countries are building drone walls, and China is bristling with missiles and drones.
The Iran conflict has put drones on vivid display, with a drone taking down a $50 million Apache helicopter. The Pentagon is in catch-up mode and, for fiscal 2027, plans to spend $70 billion for drones and counter-drone systems.
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Drones are now big business. According to Grand View Research, the market was valued at $83.8 billion in 2025 and is projected to reach $96.4 billion in 2026, heading toward over $180 billion by the early 2030s.
This is a fast-growing, international and competitive market.
The U.S. Department of Defense, for example, is currently investigating the development of uncrewed vehicles that use artificial intelligence (AI) through its Replicator initiative.
China is a leader in drones in terms of technology and cost, but seeing the risks, the U.S. government’s goal is to ban Chinese drones. On January 1, 2027, a federal ban on Chinese-made drone components goes into full effect across all U.S. government programs.
Drones come in all sizes, speeds, and ranges. Militaries categorize drones based on weight, size, and range, with the latter spanning from under 5 kilometers to over 20,000 kilometers.
Micro-drones rely on lightweight electric batteries, prioritizing stealth over long distances. In contrast, large drone platforms are propelled by turboprop or jet engines that allow them to stay airborne for up to 50 consecutive hours.
Drones can be broken down into three basic components: The brain continuously processes data from built-in sensors to adjust motor speeds; sensors track orientation, measure speed, and monitor altitude; regulators control signals into specific electrical power levels for each motor.
Investing in the New Age of Drones
How do we invest in the new age of drones? One could start with the Defiance Drone and Modern Warfare ETF (JEDI). This ETF targets companies deriving major revenues from drones, AI defense, and advanced mobility. Then there is the AdvisorShares Drone Technology ETF (UAV), one of the largest dedicated U.S. drone ETFs and the best-known pure-play drone fund.
You could also take a broader approach by investing in one of the big boys, such as Northrop Grumman (NOC). The stock is off 20% over the last six months despite a $105 billion backlog of orders. Northrop is best known for aviation, such as manufacturing the MQ-4C Triton, which is used for ocean and coastal reconnaissance and is capable of 24-hour continuous missions.
The highest-potential way to invest in drones is through a smaller drone-focused company. The Cabot Explorer is recommending one this week. Sales are growing 133% a year, and its funded backlog is up 65% over the prior year. Take advantage of a special offer and join us as we explore the best stocks and home and abroad.
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