Top Drone Tech Stocks to Watch as Adoption Accelerates

An updated edition of the Dec 24, 2025 article.

The global drone technology market is entering a new phase of expansion, driven by advancements in artificial intelligence (“AI”) and cloud computing.

The embedding of AI has made modern drones faster and more versatile than ever. AI incorporation is driving the autonomous navigation functionality of drones, enabling them to autonomously plan their flight paths based on real-time data, such as environmental terrain. The integration of 5G and advanced Wi-Fi technology has improved real-time data transmission, expanding commercial applications.

Once a key defense application, drones are now gaining rapid mainstream adoption, reshaping how governments, businesses and consumers approach border defense, surveillance, logistics and infrastructure monitoring. Drones have become integral to various sectors like mining, infrastructure monitoring, real estate, oil and gas exploration and even filmmaking. Retail behemoths like Walmart and Amazon are increasingly deploying drones in logistics for last mile delivery.  

The defense segment continues to serve as a major growth engine. Within the defense vertical, growing geopolitical strains and defense upgrades are driving increased drone adoption worldwide. Globally, drones are now being widely deployed for border security, precision strikes, intelligence, surveillance, and reconnaissance (“ISR”), and other tactical operations, making them indispensable assets in modern warfare.

Drone swarm technology is another eye-catching development. Drone swarms are a synchronized operation of numerous autonomous drones working in tandem and using AI and real-time communication to achieve common objectives. In an asymmetric fight, a well-coordinated swarm attack could subdue enemy air defenses, giving the smaller armies an edge.  Apart from military operations, the usage of drone swarms is being extensively explored for tasks like large-area surveillance and search-and-rescue.

With regulatory frameworks evolving and military and commercial adoption gaining pace, the drone sector has a long runway for growth. The unmanned aerial vehicle (“UAV”) drones market is expected to witness a CAGR of 16.77% from 2026 to 2035, according to a report from Precedence Research.

Moreover, the shift toward the “drone-as-a-service” model is opening recurring revenue streams through software subscriptions and maintenance services, thereby improving the visibility for drone tech companies.

If you are looking to capitalize on this trend, our Drone Technology Screen makes it easy to identify high-potential stocks, such as Ondas, Inc. ONDS, Draganfly Inc. DPRO and Red Cat Holdings, Inc. RCAT.  

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3 Drone Tech Stocks to Keep an Eye on

Ondas is gaining from pivot to autonomous systems via its Ondas Autonomous Systems (“OAS”) segment. A rapidly expanding opportunity set encompassing strategic partnerships (Rift Dynamics) and NDAA-compliant U.S. production readiness bodes well for OAS. New opportunities in the C-UAS segment and ground robotics offerings, particularly within the Unmanned Ground Vehicle portfolios, further strengthen Ondas’ long-term growth profile.

ONDS is focusing on M&A to strengthen portfolio offerings and broaden reach across multiple domains like unmanned ground systems, robotics and fiber optic communications, subsurface intelligence and demining robotics. In the past few months, it has acquired Sentrycs, Apeiro Motion, Zickel, among others. ONDS acquired Roboteam, a company specializing in multi-mission tactical ground robotics. It recently announced an agreement to buy Rotron Aero, a UK-based developer of advanced UAS and long-range autonomous platforms.

At its investor day, ONDS highlighted that its pro forma cash balance exceeded $1.5 billion, adjusted for its recently completed equity offering of approximately $1 billion, providing substantial financial flexibility for both organic and inorganic expansion. 

For 2026, Ondas has raised its revenue outlook to $170-$180 million, representing a 25% increase over the previous target of $140 million, which included an estimated $30 million contribution from Roboteam. This upward revision underscores improved backlog and revenue visibility.

ONDS carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Draganfly is a Canada-based drone solutions and systems developer. The company’s drones include the Commander 3XL, Heavy Lift Drone, Commander 2 and Draganfly Medical Response Drone. The company’s Apex drone is aimed at ISR, marketed for both the military and public safety. Apex drone boasts dual payload capabilities and AI computing, powered by NVIDIA’s chips. Further, DPRO’s NDAA-compliant FlexForce FPV (first-person view) drone can be flown individually or autonomously, or swarmed.

DPRO has 5-plus drone systems that are all NDAA-compliant. As the United States and NATO aggressively eliminate non-compliant Chinese systems from critical infrastructure, this compliance advantage becomes a moat. In October 2025, the company introduced its Outrider Southern Border drone, which is a North American-built, NDAA-compliant multi-mission drone platform. 

Increasing deals with the U.S. military bode well. One of the most significant developments is the company’s first major U.S. Army FPV drone order, which is not only a product sale but also includes providing supply chain and logistical support. It also includes onsite assembly and manufacturing training for the Army to allow them to make “modifications on the fly.” DPRO recently won a contract along with its partner, DelMar Aerospace Corporation, to supply Flex FPV Drones and Training to U.S. Air Force Special Operations Command. 

DPRO, a Zacks Rank #2 stock at present, is expanding its footprint in the demining vertical with collaborations with Autonome Labs and SafeLane. With its data, expertise and AI-powered aerial mapping capabilities, DPRO is well-positioned to expand in this niche market. In the last reported quarter, the company achieved 14.4% year-over-year revenue growth, supported by rising product sales.

Red Cat Holdings specializes in robotic hardware-software integration for applications for both military and commercial uses. Teal Drones and FlightWave Aerospace are two of its wholly-owned affiliates. The company is also broadening its reach into the maritime sector through Blue Ops, Inc., where it is developing uncrewed surface vessels (USVs). Its portfolio also includes Black Widow (small, unmanned aircraft systems), TRICHON (a hybrid VTOL) and FANG, an NDAA-compliant FPV drone.

RCAT is witnessing solid demand from defense and government clients and expanding program wins. The company is also sharpening its ability to rapidly scale production to meet mission-critical requirements. On the last earnings call, management emphasized “factories are the moat,” with expanded facilities in Salt Lake City, UT, and Los Angeles, and a newly opened 155,000-square-foot plant in Georgia (large-scale USVs manufacturing). 

The inclusion of the FANG FPV drone on the Blue UAS cleared list, NATO NSPA catalog approval for the Black Widow system, and integration of Palantir’s Visual Navigation software for Black Widow in GPS-contested environments materially expand Red Cat’s addressable market.

RCAT, which carries a Zacks Rank #3 (Hold), recently reported preliminary results for the fourth quarter and full year ended Dec. 31, 2025. Fourth-quarter 2025 revenues are expected to be between $24 million and $26.5 million, significantly up from $1.3 million reported in the prior-year period, while 2025 revenues are projected to be between $38 million and $41 million, up about 153% from $15.6 million posted in 2024. The upward revision is driven by strong execution across the board.

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This article originally published on Zacks Investment Research (zacks.com).

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