3 Drone Tech Stocks Well-Positioned for Long-Term Growth

An updated edition of the July 20, 2026 article.

The drone market is expected to witness a CAGR of 9.34% from 2026 to 2031, according to a report from Mordor Intelligence.

The defense segment continues to serve as the key growth engine. The 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.

Apart from defense and military use, drones are now increasingly deployed across various industries. Drones have become integral to various sectors like mining, infrastructure monitoring, real estate, oil and gas exploration, and even filmmaking. From aerial photography and agricultural mapping to data collection and operations across sectors, drones are transforming how businesses operate. Drones are gaining momentum in last-mile delivery operations as companies look to cut operational costs and enhance productivity.

Drone technology is scaling new heights, driven by cutting-edge advancements 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. 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 Elbit Systems ESLT, Rocket Lab Corporation RKLB and Unusual Machines UMAC.

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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. 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.

Earlier in the year, Elbit Systems won a major $1.4 billion European extensive military modernization contract spanning multiple battlefield domains, including uncrewed autonomous solutions. Elbit also highlighted the U.S. Army’s selection of its THOR Group 2 UAS, describing the award as an expansion of its UAS footprint in the country.

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.  Elbit is also investing heavily in counter-drone technologies. 

ESLT carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Rocket Lab Corporation is benefiting from momentum across both Space Systems and Launch Services, supported by rising government defense spending, constellation deployments and heavy demand for launch capacity. Second-quarter 2026 revenues reached $234 million, increasing 62% year over year and 16.8% sequentially. Space Systems revenues amounted to $189.5 million, up 38.6% sequentially, driven by the satellite manufacturing business and initial contribution from the Mynaric acquisition. 

Contract momentum remains particularly strong. The company had a $2.36 billion backlog, comprising roughly 60% Space Systems and 40% launch at quarter-end.  Management expects about 45.5% of the existing backlog to convert into revenues over the next 12 months, while component orders could provide additional revenue beyond this backlog conversion. 

Launch demand is another important catalyst. On the last earnings call, Rocket Lab highlighted that it booked more than $437 million in bookings for Electron, HASTE and Neutron. It secured a $266 million Space Force contract for up to 18 suborbital missions and a $397 million contract to build and launch Flatellite spacecraft for the U.S. Space Force. 

Neutron represents a longer-term organic growth catalyst. The development program is progressing through final checkout and assembly, with delivery to the launch pad targeted for the fourth quarter of 2026. 

Another potential catalyst is the proposed Iridium acquisition, expected to be closed around mid-2027, subject to regulatory and shareholder approvals. The acquisition will accelerate RKLB’s entry into the space applications niche. RKLB carries a Zacks Rank #2. 

Unusual Machines is a fast-scaling player within the evolving drone industry supported by strong tailwinds. The company is a domestic NDAA-compliant drone components supplier. The first-person view (“FPV”) is UMAC’s core operational area within the drone industry. The company is benefiting from strong demand, driven primarily by rising U.S. defense demand. On the last earnings call, management noted that the U.S. supply ecosystem remains constrained, and it expects demand to outstrip supply through 2026 and deep into 2027.

The Department of War remains the primary demand driver, supported by the Drone Dominance Gauntlet program, higher autonomous-systems spending and an accelerating counter-UAS market. Management highlighted that the Gauntlet Program is on track, with Phase 2 in its final selection process, and that more than 60,000 drones were expected to be ordered in the second half of 2026, primarily in the fourth quarter. 

Management highlighted several large industry awards, including counter-UAS and FPV drone programs, and believes these programs should generate incremental component demand. UMAC expects these to begin flowing through the supply chain in the late third quarter and fourth quarter and into 2027.

To capitalize on this demand, UMAC is aggressively scaling its manufacturing capacity. The pending Upgrade Energy acquisition is likely to broaden UMAC's product portfolio into batteries and strengthen its competitive position as a more comprehensive drone component supplier.

UMAC, which carries a Zacks Rank #2, generated $16.7 million in revenues, up 687% year over year in the second quarter of 2026. Approximately 95% of quarterly revenues came from Enterprise customers.  

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