When investment mavens drone on, it’s easy to tune them out. But when investment mavens talk drones, there’s every reason to listen. Quadrocopters, ocean robots, and the like represent a wave of high-tech you could well call high-flying tech—as much for the potential altitude of stock prices as the aircraft themselves.
To gain some perspective on where drone stocks might be headed, it pays to study the metrics behind their growing popularity. The Federal Aviation Administration (FAA) announced U.S. drone registrations passed 1 million in 2018 and have continued growing. This includes a wide variety of drones—used for photography, racing, and even search and rescue—with growth expanding into farming and package delivery.
AeroVironment is a leading manufacturer of small unmanned aircraft systems used for video surveillance and other purposes with a market capitalization of $1.8 billion in early 2019. It has a strong balance sheet with no debt, and its shares in February 2021 were trading in the $130 range, nearly double when compared to one year ago.
Because the company has divested all but its aircraft business, it is poised to capitalize on any U.S. military increase in drone spending forecast.
Northrop Grumman (NOC)
This industrial contractor fills the slot formerly held by Boeing, which is facing challenges from the 2019 grounding of its troubled 737 air fleet. Northrop Grumman is making all-weather spy drones for NATO that can operate at high altitudes and drew attention at the Avalon air show in February 2019 with the historic landing of its RQ-4 Global Hawk.
The company's drone division has a broad range of purposes, and its Polar Eye drone is mapping polar habitats in the Arctic. In February 2021, the stock is down slightly from its 52-week high of $356 but has bounced back nicely from a December 2018 low of $226.
Back in 2013, Amazon.com began making a lot of noise about Amazon PrimeAir. The service, so the e-commerce giant predicted, might someday get a package to your door within 30 minutes—via octocopter. But for all the hype, and predictions of a launch by 2015, it simply didn’t happen.
On June 5, 2019, Amazon said it will begin home delivery "in months" via self-piloted drones. The announcement did come in the same week the House Judiciary Committee announced its launch of antitrust investigations. In August 2020, Amazon gained FAA approval. While the stock price held at more than $3,000, time will tell if Amazon can keep the momentum flying.