EPAZ - Stocks to Watch In The High Flying US Military Drone Market
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Drone technology has advanced almost exponentially since theirintroduction roughly 50 years ago, to the point where drones are nowone of the most important and cutting-edge tools used by modernmilitaries. This demand for military drones has boosted competition inthe market and defense budgets alike.
The global military drone market size, valued at$11.73 billion in 2022, is projected to grow to $30.86 billion by2029, with a CAGR of 14.82% in the run-up to 2029. With increasedgovernment funding as one of the key drivers, the demand for drones isrising fast. Branches of the US Military, including the Navy and theArmy, as well as the Department of Defense, all see their budgets forunmanned vehicles expand. The ongoing war in Ukraine has also shownthe critical role of drones in surveillance, reconnaissance, andcombat operations.
Epazz, Inc. (OTC: EPAZ) is a mission-critical providerof drone technology, blockchain mobile apps, and cloud-based businesssoftware solutions. Its spinoff, ZenaDrone, is an autonomous dronemonitoring, inspection, and surveillance solution provider.
ZenaDrone first launcheddrones to predict animal health and crop diseases. Recently, it made aforay into defense with the launch of ZenaDrone 1000, an unmannedvehicle with capabilities that include fully autonomous flights,highly detailed 3D mapping, geotagging, and thermal detection. Itcombines the best of both software and hardware to provide solutionsfor aerial monitoring and data gathering in defense.
On March 1, Epazzannounced that the US Air Force had invited the company to conduct ademonstration of the ZenaDrone 1000 at an air base in California onMarch 16 and 17. It has been focusing on getting U.S. governmentcontracts for the product, as it submitted Phase 1 SBIR contracts andis working on securing partnerships for Phase 2.
With additional phases,SBIR would enable the company to win major government contracts worthup to $15 million over the next three years. With the significantrevenue opportunity coming from the SBIR contracts in the next fewyears, the company’s prospects also get a boost from the ban onChinese drones by the US government. Additionally, if ZenaDronebecomes a part of the program, it will have to be able to sell itsdrones to US allies. Trading at $0.0067 per share, this companydeserves investor attention.
Additional stocks in the military drone space topay attention to include:
NVIDIA Corporation (NASDAQ:NVDA) is a graphics chipmakerthat also provides autonomous drones with AI-enabled flight controlwith object recognition capabilities.
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Nvidia is one ofthe first companies to bring AI capabilities to commercial drones withits credit card-sized platform NVIDIA Jetson TX2
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On January 19, thecompany released Nvidia Jetson Orin NX 16Gb module, the most advancedAI computer with the ability to boost performance and efficiency ofdrones
BAE Systems (OTC: BAESY) specializes inaerospace, security, and armaments. It develops security, defense, andaerospace technology systems for use in the air, on land, and at sea,including unmanned systems and drones.
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On Feb. 15its Autonomous Pacific 24 rigid inflatable boat was the first everunmanned military vessel to be awarded Lloyd’s Register UnmannedMarine Systems Certification.
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On Feb. 28 BAE Systems unveiled a new uncrewedmilitary aircraft that will be designed, manufactured and armed inAustralia. The STRIX uncrewed air system will be capable of air toground strikes, surveillance and reconnaissance in "high-riskenvironments."
Elbit Systems Ltd. (NASDAQ:ESLT) is anIsrael-based technology company involved in numerous defense, homelandsecurity, and commercial programs. Its products include unmannedaircraft systems; command, control, computing, and communications(C4ISR); and aerospace, land, and naval systems.
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Its robotic and autonomous combat solution, the THOR VTOL,vertical takeoff and landing, is a mini unmanned aircraft systemuniquely positioned to operate both in urban areas and marine zones.The platform is foldable, stored in a backpack and can be deployed inless than two minutes.
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Its fully autonomous operation micro-unmannedaircraft system MAGNI is a foldable device designed for deliveringday/night, 3D real-time intelligence.
Kratos Defense &Security Solutions, Inc. (NASDAQ:KTOS) is a government contractorfor the US Department of Defense, making drones, defense electronics,and other products for the Pentagon and other government buyers. Thecompany recently developed loyal wingman drones that can fly alongsidemanned aircraft to conduct reconnaissance, test enemy air defenses,and launch attacks with precision weapons.
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On Feb. 23Naval Air Systems Command awarded Kratos a sole source $49.6 millioninitial contract for production of the BQM-177A drones, its SubsonicAerial Target System. Kratos has delivered 65 products previously,under a $14.7-million contract. Under this new agreement, it willdeliver another 55 BQM-177A drones, mission kits, and technical datato the navy.
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On March 1 the company said it can double or even triple itsannually built 150 drones, including its Valkyrie XQ-58A, to meetpossible surge in demand that could come from the Pentagon’s aid toUkraine and stocks depletion.
Conclusion
The market for military drones has strongdrivers, with growing government spending being the most importantone. The use cases of drones are expanding as well, to includemilitary cargo delivery.
Investorshoping to get in and benefit should pay close attention to the newsand advances that these drone manufacturers make as they continue toinnovate and bring new products to market.
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