Drone technology is completely changing the way our world operates. The military has long used drones to carry out covert operations, but now people are using drones for videography, deliveries, and so much more.
[CAPRwire, Fri Feb 19 2021] Drone technology is completely changing the way our world operates. The military has long used drones to carry out covert operations, but now people are using drones for videography, deliveries, and so much more. We've rounded up the best drone stocks to watch as this exciting technology gets off the ground - literally.
As drones get more popular and widespread, the companies that make them will likely see their shares go up in value. This makes right now a great time to invest in drone stocks.
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Best Drone Stocks To Buy
AeroVironment (NASDAQ: AVAV)
AeroVironment is a growing defense contractor that focuses on unmanned aerial vehicles (UAVs). They have contracts with the Department of Defense to build military drones. AeroVironment also sells missile systems and satellite technologies.
AeroVironment focuses on their government contracts, which gives them a stable source of revenue in a challenging market. However, they also have some commercial drone services available. This gives AeroVironment some much-needed diversity in their portfolio.
This company has recovered quite well from the stock market crash in March. While they haven't quite reached their 2018 highs, AeroVironment is now performing much better than they were in January of 2020.
When it comes to earnings, AeroVironment exceeded market expectations this year. In December, their earnings report beat estimates by $10 million.
AeroVironment has focused mainly on small drones so far. However, they are committed to expanding their services. This year, they acquired a German robotics company called Telerob. This acquisition could enable them to expand their products.
Boeing (NYSE: BA)
In addition to making commercial airplanes and military aircraft, Boeing also has a presence in the drone market. Although drones are a relatively small source of their income, Boeing still remains an important player in the industry.
Boeing is over a century old and is one of the most respected aviation companies in the world. They have long held contracts with the US military to develop tactical solutions. In recent years, Boeing has been focusing more on Insitu, which is their drone subsidiary company. Their most notable UAV is the ScanEagle, which is used for reconnaissance missions.
Boeing stock has struggled this year for a few reasons. COVID-19 shutdowns hit the travel industry hard, and many of their biggest customers had to postpone their commercial aircraft orders. They've also been struggling with the grounding of the 737 MAX, a commercial plane that was involved in multiple accidents over the past few years.
However, things are looking up for Boeing. It's likely that travel will resume sometime in 2021 as the COVID-19 vaccine becomes more widely available. The FAA also recently authorized the 737 MAX to fly again after addressing key technical issues.
This stock is still far below its share prices from early 2020. It might take time for Boeing to return to this 52 week high again. However, such an established name in the defense sector will likely recover in the long term, making it a good investment.
EHang Holdings (NASDAQ: EH)
One function that drones might be used for in the future is passenger flight. EHang is a Chinese drone company that is working to make this a reality.
This company initially showed off their drone technology online in 2018. They envision that their passenger drones would be part of smart cities around the world. They could potentially be used for transportation as well as shipping, firefighting, tourism, and so much more.
In 2020, the Civil Aviation Administration in China approved EHang's drones for commercial passenger use. Many other countries have also started trials with EHang to bring their drones abroad.
EHang's share price has nearly doubled from its low point in March 2020. They saw a huge jump in December when market experts raised their earnings estimates by a large margin. If EHang keeps on this trajectory, they may be an incredible investment moving forward.
Nvidia (NASDAQ: NVDA)
When you think of Nvidia, you might not immediately think of drones. Nvidia an electronics company that designs graphics processing units and other computer parts. However, many of the world's top drone companies use these parts.
Nvidia's technology is very impressive. Their products help drones run autonomously by providing them with sensors to interact with the world around them. Since many privately held drone companies work with Nvidia, there's huge potential for earnings growth as the drone market expands.
Nvidia stock has already shown amazing performance in 2020, doubling in value despite the stock market crash. However, there's still room for growth despite the stock's expensive price tag. In addition to their work with drones, they also make processing units and chips for gaming PCs. The gaming industry has boomed this year as people have been looking for at-home entertainment.
Drone Manufacturing Stocks
Parrot (OTC: PAOTF)
Parrot is a French company that makes some of the world's most popular hobby drones. While military drones have gotten a huge amount of attention, there's also a huge market for hobbyists. Many people use drones for fun to capture amazing photography or just to learn how to fly.
However, Parrot's most recent drone takes things a step further. This drone is called the ANAFI USA, and it is designed for professional applications like firefighting and security. These innovative new services could benefit companies in many different industries. With this new release, Parrot can appeal to much broader markets and potentially draw in more money.
Parrot is still priced under $10, so it's important to be wary of volatility before investing. However, drones are a growing market, and Parrot is a company with huge potential for the future.
GoPro (NASDAQ: GPRO)
GoPro is a company that makes small, durable cameras with great photo and video quality. Their cameras are designed to withstand shock and water, so they're great for outdoor use.
Many people use drones to capture aerial photo and video. GoPro's durable cameras are ideal for drones, and they started manufacturing the Karma drone in 2016. This drone is lightweight and great for hobbyists, but it's also become popular among professional videographers.
GoPro stock has had its ups and downs, and is still trading far below its 2014 peak. However, there's still potential for growth with this company. After hitting a low point in March, they've rallied to a year long high in December of 2020.
Best Drone Delivery Stocks
Amazon (NASDAQ: AMZN)
We all know Amazon as one of the world's largest tech companies. What started as an online retailer has now become a multi-faceted business with web services, video streaming, and much more.
Amazon has a huge global delivery operation, so it's no surprise that they've been considering unmanned aircraft as a delivery solution. They started testing their Amazon Prime Air delivery service in 2019.
The FAA recently released a set of new rules that look very promising for Amazon and their fleet of drones. Small drones will now be permitted to fly without the special waivers that were previously required. This makes them one of the best drone stocks to watch right now.
As a whole, Amazon has been incredibly strong in 2020. Despite the pandemic, they were able to increase their already-massive market share as people relied on their deliveries, video streaming, and other services.
Amazon is expensive, so it's not going to be the right investment for everyone. However, if you can afford the high price tag, there's still potential for Amazon to do even better moving forward.
Military Drone Stocks
Northrop Grumman (NYSE: NOC)
Northrop Grumman is one of the largest defense contractors currently in operation. They currently make a range of high tech drones for the US Air Force.
This company's top drone is the Global Hawk. This is a surveillance drone that is used for intelligence and data collection. While the Global Hawk is primarily used by the US Air Force, NASA and NATO also rely on it. This drone is very expensive and comes with a high price tag for Northrop Grumman.
Because Northrop Grumman primarily contracts with the government, they have some added financial stability. In addition to drones, they manufacture other air and space craft, as well as high grade missile systems.
Northrop's stock price has gone up and down over the past year. However, their status as a leading defense contractor means they are a relatively low risk stock. This is a good pick for a long term investing strategy.
Lockheed Martin (NYSE: LMT)
Lockheed Martin is another leader in the defense sector. They are known for their huge portfolio of air, space, and security services. While they do have some commercial clients, the vast majority of their contracts are with the government.
One of Lockheed Martin's leading drones is a small unmanned aircraft called the Indago 3. This drone is designed to fit in a backpack, but is robust and durable enough for military use.
Lockheed Martin shares have recovered from the March 2020 crisis. However, they are still below their peak price from January 2020. This means there's still room for growth here. They've been continuing to land large orders for their fighter planes and other aircraft.
Lockheed's status as a top defense contractor helps to minimize their financial risk. Overall, they are an established company with a strong business model. They're not only one of the top drone stocks, but they are also a strong portfolio pick overall.
Best Drone Penny Stocks
Plymouth Rock Technologies (OTC: PLRTF)
Plymouth Rock is a Canadian company that has a full range of drones for both tactical and civilian use. Unlike many other drone companies, they build their products in the US. This means they could appeal to companies that want alternatives to leading Chinese drone companies.
Their shares are currently priced at well under a dollar. Investing in stocks that are priced this low can be tricky, so investors will want to be very careful when doing so. There's a high risk of volatility with stocks priced this low, and there's no guarantee that shares will go up enough to see real profit.
However, for new investors without much capital, trading penny stocks may be a low risk way to get started. Plymouth Rock is an example of an affordable way to invest in new drone technology.
Should You Invest In Drone Stocks?
Drone stocks are an excellent investment for the future. The world is moving towards automated technology, and drones provide efficiency that can be very beneficial in many industries.
When the COVID-19 pandemic hit, companies started looking for ways to minimize health risks for people. Drones could be one of those solutions - for example, they have the potential to complete package deliveries autonomously. Although this idea hasn't fully come to fruition yet, it has gotten many people excited about what drones could do in the future.
Now is a great time to invest in drone stocks. As drones become more ubiquitous, their stock prices will rise. If you buy now, there is huge potential for great returns down the line.
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Drone Stocks: Final Thoughts
Drone technology is changing the way we do so many things in our economy. Not only are they changing the way the military works, but they can also take HD video, make deliveries, conduct aerial maintenance, and potentially even be used for travel.
These top drone stocks to watch are a great way to invest in this exciting new technology. Since people are relying more on autonomous services due to the pandemic, now is actually a great time to invest in drone stocks.