An updated edition of the Sept. 2, 2026 article.

The drone technology industry is gaining significant traction as unmanned aerial systems (UAS) increasingly find applications across various sectors like mining, infrastructure monitoring, real estate, oil and gas exploration, and even filmmaking. Meanwhile, public safety and disaster response sectors are using drones for surveillance and search-and-rescue missions. The usage of drone swarms is being extensively explored for tasks like large-area surveillance and search-and-rescue.

Drones are gaining momentum in last-mile delivery operations as companies look to cut operational costs and enhance productivity. Retail behemoths like Walmart and Amazon are increasingly deploying drones in logistics. From aerial photography and agricultural mapping to data collection and operations across sectors, drones are transforming how businesses operate.

Technological advancements are also reshaping the landscape. Cutting-edge advancements in autonomous technology and AI-powered navigation are enhancing drone performance and expanding their operational scope. 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.

The drone market is expected to witness a CAGR of 9.5% from 2026 to 2033, according to a report from Grand View Research.

The defense sector remains a major catalyst for drone adoption, supported by simmering geopolitical tensions and the growing importance of UAS in modern warfare. 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.

With regulatory frameworks evolving and military and commercial adoption gaining pace, the drone sector has a long runway for growth. Drone tech companies with strong R&D pipelines, diversified end-market exposure, and strategic collaborations are well-positioned to flourish in this evolving landscape.  

If you are looking to capitalize on this trend, our Drone Technology Screen makes it easy to identify high-potential stocks, such as Kratos Defense & Security Solutions (KTOS Quick QuoteKTOS - Free Report) , Elbit Systems (ESLT Quick QuoteESLT - Free Report) and RTX Corporation (RTX Quick QuoteRTX - Free Report) .

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3 Drone Tech Stocks to Add

Kratos Defense is well-positioned to benefit from rising military drone adoption, backed by its portfolio of affordable, high-performance unmanned aerial systems. Kratos’ unmanned systems business involves scaled defense programs and vertical integration. At the heart of this business lies the XQ-58A Valkyrie combat collaborative aircraft (“CCA”), which has secured a key role in the U.S. defense ecosystem.

In October 2026, KTOS and Airbus announced the successful completion of the first flight of the U740-Valkyrie in Europe. The collaboration aims to deliver a combat-ready collaborative combat aircraft by 2029 to meet German and other European defense requirements.

Earlier this year, Northrop Grumman, a KTOS partner, received the $230 million MUX TACAIR CCA program award, which it will split with Kratos. For this program, Northrop will integrate its mission systems with Kratos Valkyrie CCA, validating Valkyrie’s operational relevance. On the last earnings call, KTOS noted that it anticipates an additional Marine Corps Valkyrie order by the end of 2026. 

The company is also witnessing international opportunities for its Tactical Firejet and Mighty Hornet platforms, including in Taiwan. Kratos is expanding its Oklahoma manufacturing facility by approximately 50,000 square feet, strengthening production capabilities across Valkyrie and Firejet drones.  The company is also expanding its presence in C-UAS, a category expected to ramp significantly over the next few years. 

Beyond unmanned systems, Kratos, which sports a Zacks Rank #1 (Strong Buy), is benefiting from increasing investments in propulsion systems, space and satellite systems and hypersonics. Its hypersonics business, which generated approximately $200 million in revenues in 2025, is projected by management to reach $400 million in 2026 and at least $700 million in 2027.

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Elbit Systems is an Israel-based company that develops innovative solutions across several domains, including unmanned systems. The company’s drone business got a boost earlier this year when the U.S. Army selected its THOR Group 2 UAS to provide tactical units with organic aerial capability to support a variety of missions, including reconnaissance, surveillance and target acquisition. Earlier in the year, ESLT also won a major $1.4 billion European extensive military modernization contract spanning multiple battlefield domains, including uncrewed autonomous solutions.

Elbit is also strengthening its presence in the European drone market through its partnership with Diehl Defence to offer the SkyStriker loitering munition system to Germany’s armed forces. 

In the second quarter of 2026, the company reported higher UAV sales in Israel. Although Aerospace segment revenues declined 8% year over year due to an unfavorable project mix and lower training and simulation sales in Europe, increased UAV sales in Israel partly offset these headwinds.

Elbit is also strengthening the technology surrounding unmanned operations through acquisitions. In January 2026, ESLT acquired U.K.-based UAVTactical Systems Ltd (“UTACS”). UTACS is a key supplier of advanced tactical UAS to the British Army, other NATO member countries and the United Nations. In May 2026, ESLT’s subsidiary FUSE acquired another Israeli technology company, Blue White Robotics Ltd. (Bluewhite). Bluewhite 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.  

In September, FUSE introduced its AI-driven autonomous combat systems and One2Many operational capabilities, which enable real-time coordination of multiple autonomous aerial and ground systems.

In October 2026, ESLT, which carries a Zacks Rank #2 (Buy), completed the acquisition of Canada-based International Submarine Engineering Ltd., expanding its capabilities in remotely operated systems and autonomous underwater vehicles. 

RTX Corporation is a major aerospace and defense player and represents a more diversified way to enhance exposure to the drone technology space. The company delivers advanced systems and services for commercial, military, and government customers through its Collins Aerospace (Collins), Pratt & Whitney, and Raytheon business segments.

The company’s exposure to the drone market is primarily driven by its strength in counter-drone systems. In a significant development, Raytheon secured contracts worth $729 million in October 2026 to supply LIDS (or low, slow, small, unmanned aircraft Integrated Defeat System) components to the U.S. Army, Jordan and Qatar, marking the first international sales of its Coyote effector and Ku-band Radio Frequency Sensor (KuRFS).

RTX is also investing in next-generation technologies to address increasingly sophisticated unmanned aerial threats. In October 2026, Raytheon successfully completed three tests of its upgraded Coyote Block 2C+RM interceptor, advancing the program from concept to testing in just 15 months.

Beyond counter-drone tech, RTX is benefiting from growing demand for its other solutions across  commercial aerospace and defense. Raytheon secured substantial multiyear production contracts for Tomahawk, AMRAAM, SM-6 and SM-3 Block IB missiles, providing greater visibility into future revenues.

RTX, which carries Zacks Rank #2, ended September 2026 with a backlog of $340 billion, providing substantial revenue visibility.