An updated edition of the April 07, 2026 article.

Unmanned aerial vehicles (UAVs), commonly known as drones, have emerged as one of the most transformative innovations in the dynamic landscape of next-generation technologies.

Defense spending continues to be a major tailwind. Within the defense vertical, growing geopolitical strains and defense upgrades are driving increased drone adoption worldwide. Globally, drones are now being widely deployed for border security, precision strikes, intelligence, surveillance, and reconnaissance (“ISR”) and other tactical operations, making them indispensable assets in modern warfare.

While defense remains a core market, drones are rapidly gaining traction across a wide range of industries. Drones have become integral to various sectors such as mining, infrastructure monitoring, real estate, oil and gas exploration, logistics and even filmmaking. From aerial photography and agricultural mapping, drones are transforming how businesses collect data and operate across sectors.

The drone technology continues to reach new heights, fueled by breakthroughs in autonomous technology and AI-powered navigation. The embedding of AI has made modern drones faster and more versatile than ever. AI incorporation is driving the autonomous navigation functionality of drones, enabling them to autonomously plan their flight paths based on real-time data, such as environmental terrain. The integration of 5G and advanced Wi-Fi technology has improved real-time data transmission, expanding commercial applications.

With regulatory frameworks evolving and military and commercial adoption gaining pace, the drone sector has a long runway for growth. The UAV drones market is expected to witness a CAGR of 16.77% from 2026 to 2035, according to a report from Precedence Research.

If you are looking to capitalize on this trend, our Drone Technology Screen makes it easy to identify high-potential stocks, such as Elbit Systems (ESLT Quick QuoteESLT - Free Report) , Draganfly Inc. (DPRO Quick QuoteDPRO - Free Report) and Ondas Inc (ONDS Quick QuoteONDS - Free Report) .

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3 Drone Tech Stocks in Focus

Elbit Systems is an Israel-based company that develops innovative solutions across several domains, including unmanned systems.

Uncrewed aerial systems (UAS) and broader autonomous solutions are becoming a central pillar of ESLT’s growth strategy. On the first quarter 2026 earnings call, management pointed to a major $1.4 billion European extensive military modernization that includes a wide range of solutions, which also includes “uncrewed autonomous solutions” integrated across multiple battlefield domains.

Elbit is also expanding its footprint in this space through both organic investments and acquisitions. The company recently launched a new UAS production facility in Romania. It had earlier completed the acquisition of U.K.-based UAV Tactical Systems Ltd (“UTACS”). UTACS is a key supplier of advanced tactical UAS to the British Army, other NATO member countries and the United Nations. Elbit is also investing heavily in counter-drone technologies. 

ESLT’s FUSE recently acquired another Israeli technology company, Blue White Robotics Ltd (Bluewhite). It develops AI-driven autonomous solutions for critical off-road and defense applications. The acquisition bolsters FUSE’s autonomous capabilities and complements its unmanned aerial and swarm technologies. FUSE is a part of Elbit Systems’ C4I & Cyber unit that designs and develops AI-powered autonomous combat systems. Earlier this month, FUSE won a contract, through a tie-up with Mistral, with the U.S. Army to deliver THOR Group 2 UAS.  

First-quarter revenues rose 15.5% year over year to $2.19 billion. The company’s performance was supported by a record backlog exceeding $30 billion, providing strong visibility into future revenues. ESLT carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Draganfly is a Canada-based drone solutions and systems developer. The company’s drones include the Commander 3XL, Heavy Lift Drone, Commander 2 and Draganfly Medical Response Drone and the Apex drone aimed at ISR, marketed for the military and public safety.

Increasing presence in the military vertical is a major tailwind. At the beginning of the first quarter, DPRO secured orders for FPV drones from the U.S. Army and for Commander 3 XLs from international military customers. It was recently selected by the Department of War, along with F4 Defense International, to develop a multi-layered, modular and rapidly deployable counter-UAS (C-UAS) system.

DPRO has 5-plus drone systems that are all NDAA-compliant. As the United States and NATO aggressively eliminate non-compliant Chinese systems from critical infrastructure, this compliance advantage becomes a moat. In October 2025, the company introduced its Outrider Southern Border drone, which is a North American-built, NDAA-compliant multi-mission drone platform. DPRO recently introduced the Draganfly Blitz platform to capture demand for NDAA-compliant integrated gimbal systems. Draganfly Blitz payload platform comprises stabilized gimbal systems and electro-optical and infrared payloads. 

DPRO, carrying a Zacks Rank #3 (Hold) at present, is expanding its footprint in the demining vertical with collaborations with Autonome Labs and SafeLane. With its data, expertise and AI-powered aerial mapping capabilities, DPRO is well-positioned to expand in this niche market. The company achieved 49.4% revenue growth in the first quarter of 2026, supported by rising product sales.

Ondas is rapidly scaling its Ondas Autonomous Systems (“OAS”) business, which has quickly become a multi-domain autonomy platform spanning ISR, C-UAS, loitering munitions/strike systems, unmanned ground vehicles and stratospheric sensing via World View acquisition. 

The company has accomplished this broad portfolio through focused M&A activity. In the first quarter alone, the company completed five acquisitions (World View, INDO Earth, Rotron Aerospace, Bird Aero and Mistral Inc). Last week, ONDS announced an agreement to acquire Omnisys Ltd., adding AI-powered battlefield orchestration software to its autonomous defense systems portfolio. In the past year, it has acquired Sentrycs, Apeiro Motion and Zickel, among others. Ondas now operates in more than 45 countries with over 1,000 employees globally.

The company has also accumulated a backlog of $457 million following the acquisitions of World View and Mistral. Management increased 2026 revenue guidance to at least $390 million.

ONDS, a Zacks Rank #3 stock, has also accelerated its profitability timeline, now expecting its OAS segment to deliver adjusted EBITDA profitability by the first quarter of 2027, roughly six months ahead of the earlier target. Expectations for company-wide adjusted EBITDA profitability were unchanged, with the target being the first quarter of 2028. The key factor driving this is the company’s progress at the product level. Management noted that it achieved adjusted EBITDA profitability at the product company level in the first quarter of 2026, two quarters ahead of the initial timeline. This implies that the underlying businesses are delivering profits even amid heavy growth investments.