economy
March 4, 2026
U.S.-Iran attacks are putting a spotlight on drone technology. How to invest
Drones are playing a prominent role in the war between the U.S. and Iran that erupted over the weekend, putting a spotlight on the need for deterrence systems.
TL;DR
- Increased geopolitical conflict is driving demand for drone systems and counter-drone technology.
- Artificial intelligence is accelerating the development of large-scale, low-cost drones.
- Counter-drone systems are crucial for defending against threats from unmanned aerial systems (UAS).
- AeroVironment and Leonardo DRS are highlighted as key companies in counter-drone technology.
- The U.S. government is increasing funding for unmanned systems and counter-drone programs.
- AeroVironment's Freedom Eagle-1 was selected by the U.S. Army as a counter-drone interceptor.
- Leonardo DRS is a supplier for the U.S. Army's Directed Energy Maneuver-Short Range Air Defense (DE M-SHORAD) system.
- Defense primes like Lockheed Martin, Northrop Grumman, General Dynamics, and RTX are favored due to growing defense budgets.
- Analysts see upside for defense primes trading at a discount to the S&P 500 on a price-to-free-cash-flow basis.
- Companies with exposure to tactical missiles and munitions are expected to perform well.
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