Hey! Did you know that the global commercial drone market is currently valued at $30 billion? It's also projected to grow at a compound annual growth rate of 10.6% through 2030.
Because of this valuation, drone stocks are becoming very attractive to investors. And why shouldn't it be? Everyone wants to get their money up, especially in the coming new year. In this article, we list some of the best drone investments you can capitalize on in 2025.
5 Key Drone Stocks to Watch in 2025
As an investor who wants to take advantage of the drone industry's potential, keep a close eye on these companies:
1. Amazon (AMZN)
Amazon's Prime Air program is making a lot of noise, keeping the company as a frontrunner in drone delivery. The company even recently received FAA approval for its MK30 delivery drone. This is great news, considering it will lead to quicker and quieter product deliveries in select markets like Phoenix.
2. Joby Aviation (JOBY)
This innovative company is positioning itself as a leader in electric vertical take-off and landing (eVTOL) aircraft. Need some convincing? It has FAA approval secured and an exclusive deal made with Dubai. Joby looks really set to be a big player when it comes to urban transportation.
3. AeroVironment (AVAV)
AeroVironment is a defense sector powerhouse. The company has seen some impressive stock performances, with a 53.2% year-to-date return. They recently acquired BlueHalo and we think that's part of a commitment to expanding what drone and space technology can do.
4. Kratos Defense & Security Solutions (KTOS)
If analysts are bullish on Kratos, perhaps you shouldn't be sleeping on them. There are predictions that the company's profits could triple in the next three years. They have strong government contracts and a focus on unmanned systems, so why shouldn't they be paying attention?
5. Northrop Grumman (NOC)
Northrop Grumman is another major player in the defense sector, and they are making big moves in drone technology. The company has secured hefty government contracts, including a $541 million missile defense contract. Analysts are also projecting a 12-month target price of $563 per share and a forward dividend yield of 1.7%.
Caution for Potential Drone Stock Investors
There's a lot of promise in the drone industry, but listen up. As an investor, you should approach this market with a lot of caution. The market has experienced funding challenges, with investments declining from $3.46 billion in 2022 to $1.67 billion in 2023. You have to be strategic and look at it as a long-term investment.
The reason the commercial drone market is growing is thanks to different fields adopting the technology. Sectors like defense, medicine, logistics, and emerging technologies like air taxi services all contribute to this recent growth. With that in mind, companies that can successfully operate through regulations and be innovative are the ones that would most likely lead the markets.
So as an investor interested in drone stocks, make it a habit to monitor regulatory developments, technological advancements, and each company's positioning. The drone industry is a shift in how we approach services in multiple sectors. If you're going to be taking advantage of the little flying toys, you should do so with a plan.