Drone stocks to target as military appetite surges
Spurred first by the Russia-Ukraine war and now by the conflict in the Middle East, the U.S. is pushing hard to expand its drone capabilities across a range of applications, including reconnaissance, strike, and air defense missions.
A particular objective is developing low-cost interceptor drones that can neutralize incoming drones without relying on far more expensive missiles. That priority sharpened after U.S. forces spent heavily on multi-million-dollar missiles to counter Iran's inexpensive drones.
Against this backdrop, the defense department is seeking more than $54 billion for autonomous drones in fiscal 2027, a 24,000% increase over fiscal 2026 spending. The Pentagon's wish list includes suppliers to build about 300,000 drones (or unmanned aircraft systems) "quickly and inexpensively." The Army is looking to buy at least one million drones over the next two to three years.
For investors, the ambitious budget will impact a wide field of companies-including those that develop drones generally, as well as those focused on autonomous drones and counter-drone systems.
Postings on ClearanceJobs.com suggest that some of those companies are already staffing up to meet the demand. These include the category's highest-profile name, Anduril (which remains private), as well as publicly traded firms ranging from specialized drone makers to large aerospace primes with broad portfolios.
Drone makers take flight
Overall, ClearanceJobs postings that mention UAS-related competencies have risen sharply over the last ten months. Specifically, they climbed from a little over 400 in June, July, and August 2025 to around 650 from January to March 2026 before surging to more than 1,000 in March.
In the first four months of 2026, category leader Anduril averaged 60 classified-professional job postings per month, up from 10 per month in the final four months of 2025 and six per month in the first four months of 2025. That represents a sixfold increase from late 2025 and a tenfold increase from the same period a year earlier.
After the first four months of this year, the company is on pace to place 4,962 ads. That would represent an increase of 10% over 2025's figure of 4,512
Anduril's revenue is reportedly expected to nearly double in 2026 to about $4.3 billion, even as the company projects a loss of more than $1 billion. In March, Anduril won an Army contract that could be worth up to $20 billion over five to 10 years, covering hardware, software, and services.
Other than Anduril, two of the most active recruiters have been AeroVironment (AVAV) and Kratos Defense & Security Solutions (KTOS).
AeroVironment averaged nearly 26 classified-professional postings per month from January through April 2026, compared with fewer than four per month in all of 2025-roughly a 7x surge. At its current pace, the company would post roughly 309 ads by the end of 2026, versus 44 in 2025.
Kratos' job postings were fairly steady from 2023 through 2025, averaging about 14 per month. But as with Anduril and AeroVironment, the pace accelerated sharply in the first four months of 2026, rising to 60 per month. At that pace, Kratos would post roughly 717 ads for the full year, more than eight times its 2025 total of 87.
While hiring data does not guarantee revenue growth, it suggests that Anduril, AeroVironment, and Kratos are staffing up as defense demand for drones and related systems increases.
AeroVironment (AVAV) drone program soars, but there's still a headwind
AeroVironment develops drones that operate in the air, on land, and at sea. Its systems support intelligence, surveillance, and reconnaissance missions, as well as "loitering" UAS that dive into targets and explode on impact.
The company's counter-drone business is expanding. It recently unveiled Halo_Shield, a UAS platform designed to combat drones, drone swarms, and "subsonic cruise missiles." The company says Halo_Shield is already being used in multiple locations.
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AeroVironment's Locust laser systems can destroy drones at a cost of "just a few dollars a shot," according to the company. The Pentagon has acquired Locust systems for use on the U.S.'s southern border, and the systems are already being used in multiple conflicts.
In May 2025, AeroVironment closed its roughly $4.1 billion acquisition of BlueHalo, expanding its exposure to space systems, counter-drone technology, autonomous drones and electronic warfare.
Top and bottom line growth are strong. In AeroVironment's fiscal third quarter, which ended in January, revenue rose 143% year over year to $408 million. Excluding BlueHalo, revenue still climbed 38%. Adjusted EBITDA more than doubled to $44.5 million.
But there are caution flags.
As of last September, AeroVironment expected Ukraine to account for 5% to 8% of revenue in the fiscal year that ended April 30, making a potential end to the war a possible headwind. The company also said in March that a Space Force contract had been "temporarily paused."
AeroVironment's stock is not cheap, trading at 149 times trailing earnings and about 50 times forward earnings. That forward multiple may be defensible given the company's growth and market position.
Kratos Defense & Security Solutions lands 'program of record'
Kratos Defense & Security Solutions develops the Valkyrie drone, which supports tactical combat, intelligence, surveillance and reconnaissance (ISR), bombing and loitering missions. The company also manufactures solid rocket motors and hypersonic systems.
The Valkyrie has gained traction with the U.S. military. The Marine Corps made it a "program of record," and Kratos, along with partner Northrop Grumman (NOC), won a contract in January worth about $231.5 million. Northrop's software is expected to help Valkyrie operate autonomously and work alongside crewed fighters in high-threat environments.
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On Kratos' fourth-quarter earnings call in March, CEO Eric DeMarco said the company had received another U.S. program of record designation tied to drones. He also said he believed Kratos was in a sole-source position for two additional tactical drone opportunities by the end of the year.
Kratos has other defense programs that could support growth. In August, DeMarco said the company had won a contract worth up to about $750 million to develop unspecified products, with meaningful revenue expected to begin in the middle of next year. In October, the company said it had been selected to enhance the Navy's radar under a deal that could be worth up to $175 million.
Kratos is also working with a Taiwanese entity on a long-range kamikaze drone with AI and anti-ship capabilities. Separately, the company received orders for 120 solid rocket motors, and the Pentagon selected Kratos to help develop highly maneuverable Mach 5-plus hypersonic missiles, DeMarco said on the March call.
In the fourth quarter, revenue rose 20% year over year to $345.1 million. Net income increased to $5.9 million from $3.9 million a year earlier, and backlog reached a record $1.57 billion.
Kratos's valuation, like AeroVironment's, is high. It trades at about 119 times forward earnings. It also appears to have a less developed counter-drone business than AeroVironment, though it announced a roughly $7 million counter-drone contract in March. And because Northrop is providing autonomous software for Valkyrie, investors may question how much proprietary autonomy Kratos controls directly.
Other drone stocks worth watching
AEVEX Corp. (AVEX),which went public in April, develops several types of drones, including fast UAS designed to pursue and attack targets. Its drones also support ISR and payload missions, and several have autonomous capabilities. The company's postings in the ClearanceJobs database, while far fewer in number than Anduril's, have grown at about the same rate. AVEX shares trade at a relatively low price-to-sales ratio of 3.1.
The large defense contractors also offer meaningful drone exposure.
- Lockheed Martin (LMT) has developed high-endurance drones, autonomous underwater systems, autonomous aircraft, an autonomous helicopter and a hybrid aircraft-helicopter drone. It also provides counter-drone technologies.
- RTX (RTX) has developed anti-drone missiles and its Coyote counter-drone aircraft.
- Boeing (BA) focuses mainly on autonomous systems, including a drone designed to work with crewed aircraft and another built for autonomous refueling missions.
- Northrop Grumman (NOC) describes its drones as affordable, fully autonomous and capable of carrying larger payloads than other aircraft of similar size. Its systems support ISR and communications missions.
- Huntington Ingalls (HII), best known for shipbuilding, has developed autonomous unmanned vessels and was selected by the Navy to build drones that can be launched from submarines without divers.
Other aerospace and defense companies support the drone market through adjacent technologies.
Viasat (VSAT) provides satellite communications for UAS, while GE Aerospace (GE) is developing drone engines. L3Harris Technologies (LHX) sells counter-drone systems with sensors, analytics and radios, and has also developed autonomous ground vehicles and unmanned ships. Northrop Grumman is also providing autonomy software for Kratos' Valkyrie drone.
ENDS//Spurred first by the Russia-Ukraine war and now by the conflict in the Middle East, the U.S. is pushing hard to expand its drone capabilities across a range of applications, including reconnaissance, strike, and air defense missions.
A particular objective is developing low-cost interceptor drones that can neutralize incoming drones without relying on far more expensive missiles. That priority sharpened after U.S. forces spent heavily on multi-million-dollar missiles to counter Iran's inexpensive drones.
Against this backdrop, the defense department is seeking more than $54 billion for autonomous drones in fiscal 2027, a 24,000% increase over fiscal 2026 spending. The Pentagon's wish list includes suppliers to build about 300,000 drones (or unmanned aircraft systems) "quickly and inexpensively." The Army is looking to buy at least one million drones over the next two to three years.
For investors, the ambitious budget will impact a wide field of companies-including those that develop drones generally, as well as those focused on autonomous drones and counter-drone systems.
Postings on ClearanceJobs.com suggest that some of those companies are already staffing up to meet the demand. These include the category's highest-profile name, Anduril (which remains private), as well as publicly traded firms ranging from specialized drone makers to large aerospace primes with broad portfolios.
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This story was originally published May 19, 2026 at 7:03 PM.