Military drones are now a critical component of modern defense systems. Unmanned aerial vehicles (UAVs) are used for reconnaissance, combat missions, border surveillance, and electronic warfare. As global defense spending increases and drone warfare becomes more prevalent, investors are seeking exposure to military drone manufacturers through publicly traded companies.
Why military drone stocks matter to investors
The shift toward unmanned defense platforms is accelerating. Governments are scaling UAV procurement for both conventional and asymmetric warfare. For investors, companies producing or integrating drone systems stand to benefit from this long-term budget reallocation, especially those with large defense contracts, proprietary technologies, or autonomous systems capabilities.
Publicly traded companies involved in military drone production
Northrop Grumman Corporation (NYSE: NOC)
- Drone programs: Global Hawk, Fire Scout
- Specialization: High-altitude long-endurance (HALE) UAVs for surveillance and reconnaissance
- Edge: Long-term contracts with the U.S. Department of Defense and NATO members. The Global Hawk is used by multiple allied forces for strategic ISR missions.
AeroVironment Inc. (NASDAQ: AVAV)
- Drone programs: Switchblade, Puma, Raven
- Focus: Tactical and loitering munitions for frontline deployment
- Advantage: Specializes in man-portable drones and kamikaze UAVs. High demand from U.S. and European defense clients for low-cost, battlefield-proven systems.
Lockheed Martin Corporation (NYSE: LMT)
- Drone involvement: Stalker, Desert Hawk, development of unmanned systems integration
- Key strength: Integration of drones into broader defense systems, including command and control, targeting, and sensors. Also involved in naval UAV systems.
Kratos Defense & Security Solutions (NASDAQ: KTOS)
- Drone programs: XQ-58A Valkyrie, UTAP-22, aerial target drones
- Niche: High-performance unmanned combat aerial vehicles (UCAVs) and target drones for weapons testing and pilot training
- Notable aspect: Valkyrie is part of the U.S. Air Force’s “loyal wingman” initiative for teaming manned aircraft with autonomous platforms.
Boeing Company (NYSE: BA)
- Drone development: MQ-25 Stingray, Loyal Wingman (Airpower Teaming System)
- Role: Builds carrier-based refueling drones and AI-assisted combat UAVs
- Partnerships: Works with Australian and U.S. defense agencies. MQ-25 is the U.S. Navy’s first operational carrier-based drone.
Teledyne FLIR (NYSE: TDY)
- Product line: SkyRanger and Black Hornet nano drones
- Specialty: Miniature drones used for close-range surveillance, especially in urban or indoor environments
- Use case: Frequently supplied to NATO forces, special operations, and law enforcement for ISR missions.
Companies with partial exposure or integration roles
Elbit Systems Ltd. (NASDAQ: ESLT)
- Headquarters: Israel
- Systems: Hermes and Skylark drone families
- Global reach: Supplies UAVs to multiple countries for tactical surveillance and electronic warfare
- Growth factors: Israeli UAV exports continue to grow due to battlefield-tested platforms and modular configurations.
Leonardo S.p.A. (BIT: LDO)
- Region: Italy
- Involvement: Falco UAV and partnerships with European defense programs
- Market: Supplies drones to NATO members and border control forces. Plays a role in joint European surveillance systems.
Turkish Aerospace Industries (via parent company Aselsan or ETFs)
- Popular models: Anka, Aksungur
- Note: While not directly listed on U.S. exchanges, investors can gain indirect exposure via ETFs focused on Turkish defense equities.
How to gain diversified exposure to military drone technology
Defense sector ETFs
Investors who prefer broad exposure can consider ETFs that hold companies involved in drone manufacturing and related technologies:
- iShares U.S. Aerospace & Defense ETF (ITA)
- SPDR S&P Aerospace & Defense ETF (XAR)
- Invesco Aerospace & Defense ETF (PPA)
These funds typically include holdings in Northrop Grumman, Lockheed Martin, AeroVironment, and Boeing.
Key trends driving military drone stock performance
Budget reallocation
Major militaries are increasing funding for autonomous and unmanned systems, shifting away from legacy platforms. This benefits drone-focused companies directly.
Ukraine conflict and real-time demand
Combat usage of UAVs in recent conflicts has driven real-world demand for tactical and loitering drones, spurring large orders from NATO members and allies.
AI and autonomy integration
Companies that integrate AI, swarm coordination, and low-latency communications into drone systems may gain a competitive edge in next-generation warfare.
Export opportunities
Defense companies with ITAR-compliant systems or export-friendly technologies are expanding sales to Asia, the Middle East, and Europe as allied nations upgrade their UAV capabilities.