This is the story of the "attacking" side of unmanned weapons — the self-destructing drones that loiter over a target and then crash into it (loitering munitions) and the combat drones that work like unmanned fighter jets. These are cheap enough to make by the millions and "expendable" — losing one doesn't hurt. They're flipping the economics of the entire battlefield, and making "the most expensive thing" lose to "the cheapest thing you have the most of" — for the first time in decades.
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Why is Loitering Munitions & Combat UAS moving?
Q2 2026
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Drone demand and capital surge, but execution risks linger
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Record revenue and backlog at AeroVironment AeroVironment reported record quarterly revenue of $641.6 million, up 133% from a year earlier, and a $1.2 billion backlog, showing strong demand for its drones and loitering munitions.
It shows the core demand strength driving the sector.
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Major orders and funding for drone makers Ondas won over $40 million in orders, Quantum Systems raised $1.2 billion at an $8 billion valuation, and Ukraine procured 25,000 ground robots in H1 2026, up from 2,000 in 2024.
It highlights broad-based demand and capital inflows across the sector.
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Smaller players gain traction and Pentagon program Palladyne won Army contracts, Mach raised $300 million, Kratos and Terra Drone expanded production, and the Pentagon's $1.1 billion Drone Dominance program aims for 200,000 drones by 2027.
It shows the breadth of growth beyond large players and government support.
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Analyst price target cuts on execution concerns Analysts cut AeroVironment price targets by up to 19% after the company lost the SCAR program and award timing slowed, signaling near-term execution risks despite intact demand.
It provides a balanced view of risks that could affect investor returns.
Latest
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Taiwan, US policy and supply deals broaden drone demand
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Taiwan commits to 40,000+ attack drones and local supply chain Taiwan's president backed cooperation with democracies to build a drone industry and proposed a $4.6B defense budget add-on covering 40,000+ coastal attack drones and 600+ surveillance drones. This adds a large new buyer and supply-chain partner, expanding the combat UAS market beyond the US and Ukraine.
A major new national procurement and industrial policy directly lifts demand for loitering munitions and combat UAS.
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US funds domestic battery and engine supply for drones Amprius won up to $75M to retrofit a US battery line for drone cells, and Kratos/GE completed first ignition of the GEK800 engine for cruise missiles and combat UAS. These ease key supply bottlenecks and advance low-cost propulsion, supporting production of loitering munitions and combat drones.
Supply-chain and technology milestones remove constraints that could otherwise cap drone production.
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Codan profit surge shows broad drone component demand Codan raised its half-year profit outlook to at least A$160M, more than double last year, on strong demand from about 50 drone makers for its radio-frequency video/data link. This confirms that conflict-driven demand is flowing through the supply chain, not just to prime contractors.
A component supplier's blowout results are hard evidence that drone demand is broad and real.
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US launches Project Meridian and Autonomous Warfare Command The Pentagon launched Project Meridian with Elon Musk and Anduril's Palmer Luckey to develop future warfare tech, and created an Autonomous Warfare Command to manage drones and robotic systems. This signals sustained high-level US commitment and funding for combat UAS and loitering munitions.
A top-level US policy push institutionalizes demand and accelerates adoption of autonomous weapons.
Q3 2026
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Combat drone demand broadens on war, but hype and tariffs loom
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Demand broadens and is validated by real conflicts The US-Iran war and Ukraine's long-range strikes showed combat drones and loitering munitions are essential, driving funded orders from the US, Europe, Canada, and Asia. Taiwan's $63.4B drone budget and record backlogs at AeroVironment ($1.5B) and Kratos ($2.08B) confirm real demand.
This is the core new driver: demand widened and was proven in actual combat, not just forecasts.
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New platforms and capital scale production New drones like XTEND's SCORPIO 1000 and Anduril's Thunder expanded the market. Capital raises and government support helped companies scale production to meet demand.
It shows how supply is expanding through new products and funding, a key force behind the sector's growth.
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Hype and cyclical risk temper the outlook Anduril's valuation doubled rapidly, suggesting hype, and a selloff showed investor caution. Demand may be war-driven and cyclical, and Lockheed's self-funded Vectis points to overcapacity.
This is the main counterweight: it warns that current momentum may not last and that valuations could be stretched.
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Tariffs and import ban raise costs and cut competition US tariffs up to 100% and a possible FCC import ban on foreign drones raise costs and reduce competition. Ukraine's intelligence chief warns Russian manpower could be exhausted by 2028, threatening long-term demand.
These are new regulatory and geopolitical risks that could hurt the sector's cost structure and future demand.
US launches Project Meridian, enlists Musk to develop the warfare of the future
Pete Hegseth, the US Secretary of Defense, announced the launch of Project Meridian, a research program into the technology and warfare models of the future, bringing in Elon Musk, Palmer Luckey, founder of Anduril Industries, and Newt Gingrich, former Speaker of the US House of Representatives, as leaders of the research effort. Hegseth unveiled the plan during a State of the Force speech at Marine Corps Base Quantico in Virginia, saying the project would focus on finding, developing and fielding new weapons and systems to meet the forms of warfare the US military may face in the coming decades. Musk's SpaceX and Luckey's Anduril are both major contractors for the US Department of Defense. The project will be overseen by Emil Michael, a former Uber executive who currently serves as a senior technology official at the Pentagon. Hegseth did not disclose further details on the budget, timeline or structure of the project. Beyond Project Meridian, Hegseth also announced the establishment of an Autonomous Warfare Command to oversee the management and deployment of US drones and military robotic systems, and said he wants major US bases to be able to produce their own energy to preserve operational capability if the country's power grid is hit by a cyberattack. He also announced plans to set up an office for religious affairs for the military and to build partnerships with academic institutions to expand cadet training programs, with the first group of institutions taking part including Liberty University, Hillsdale College, Louisiana State University, Mississippi State University and Tuskegee University. At the same time, the US Department of Defense plans to build a new base inside the country for the first time in four decades, with state governments able to compete to host it; the base is expected to accommodate several thousand personnel, and each site could cover several hundred thousand acres. The plan comes as the Pentagon is considering reducing US troop levels in Europe, with Hegseth saying the military will add tens of thousands more personnel overall while shifting its focus back to homeland defense and the Western Hemisphere.
SPCX · Demand · Positive SpaceX is named as a major DoD contractor and Musk is enlisted to lead Project Meridian research, signaling potential future defense contracts.
Anduril Industries · Demand · Positive Anduril founder Palmer Luckey is enlisted to lead Project Meridian, and Anduril is noted as a major DoD contractor, pointing to future defense demand.
Powaras Plans to Bring Overseas Military Tech to the US; Drone Startup Backed by Trump Brothers
Powaras, a US drone startup set to go public through a merger with a company backed by President Trump's eldest son, Donald Trump Jr., and his second son, Eric Trump, aims to bring technology developed overseas, including in Ukraine, to the United States to meet growing demand from the US Department of Defense. Company executives disclosed this in an interview with Reuters. The company plans to expand its business through acquisitions, partnerships with overseas firms, and manufacturing within the United States, aiming to become a partner that brings overseas-developed military technology to the US and produces it domestically. President Brett Velicovich said the company aims to become a "one-stop solution" for the Department of Defense by offering overseas technology under a "US company face," and explained that it is in talks with Ukrainian defense technology companies and wants to add capabilities such as long-range strike drones. Powaras, founded a year ago, plans to merge in early October with Nasdaq-listed Aureus Greenway Holdings, and according to regulatory filings, the Trump brothers will hold an indirect 9.9% ownership stake in the combined new company through the investment fund American Ventures. Powaras's business is still at an early stage, and as of early 2026 it had no revenue-generating operations; earlier this year it assembled a product lineup of aerial and maritime drones through acquisitions, and its revenue for the January-March quarter was 1.2 million dollars. The company recently announced it had won a contract with the US Air Force worth up to 90 million dollars and a 22.3 million dollar commercial contract to protect energy infrastructure in the Middle East for an undisclosed customer.
Defense & Geopolitical Fragmentation › Autonomous Systems & Counter-Drone ▲Demand
Powerus · Demand · Positive Powaras aims to bring overseas military drone tech to the US to meet growing DoD demand, and recently won a US Air Force contract worth up to $90M plus a $22.3M commercial contract.
US Firm Tied to Trump Jr. Invests $10 Million in Canadian Drone Company Draganfly
Canadian drone services company Draganfly announced on the 28th that it has received a total of $10 million in investment from two companies: US-based Unusual Machines, on whose advisory board President Trump's eldest son Donald Trump Jr. serves as a member, and an unnamed US asset management firm. The two companies each invested $5 million, with the transactions expected to be completed around the 30th of this month. Draganfly said it will use the raised funds to accelerate the development of advanced strategic capabilities and for general working capital. Unusual Machines makes motors and control components for drones. Investments by the Trump family, including the younger Trump and the president's second son Eric, in multiple companies have drawn intense scrutiny over conflict-of-interest concerns, particularly their investments in defense-related companies competing for government contracts. Trump Jr. did not immediately respond to a Reuters request for comment. Draganfly develops and manufactures drone systems and related software for the defense, public safety, agriculture, and industrial inspection markets, and has also supplied drones to Ukraine, which is under Russian invasion, where they are used for mapping and humanitarian aid missions. On the New York Stock Exchange, Draganfly's share price has fallen about 23% so far this year as of the closing price on the 25th, while Unusual Machines' share price has risen about 89%.
Codan raises H1 profit outlook on drone demand, shares hit record high
Codan sharply raised its first-half profit outlook on strong demand from drone manufacturers, sending its shares up 18.85% to a record high of A$61.79. The Australian communications technology company said it expects net profit after tax of at least A$160 million for the six months through December, more than double the A$71.2 million reported a year earlier and close to the A$175.2 million it generated for the full year ended June. The stronger outlook was driven by rising demand for electronic components used in unmanned drones deployed in conflicts including Russia-Ukraine and the Middle East, with Codan supplying a radio-frequency component that enables high-speed video and data transmission to about 50 drone manufacturers across the U.S. and Europe. Codan said demand from conflict regions was exceptionally strong, and its Minelab metal-detection business also started the financial year strongly, helped by sales of its Gold Monster 2000 and GPZ8000 detectors amid a higher gold price. The company said it could not provide a full-year profit forecast because demand from conflict regions is difficult to predict beyond roughly three months, and it is working to address potential supply-chain constraints amid the elevated demand.
Codan Limited · Demand · Positive Raised H1 profit outlook on strong demand for its RF components from ~50 drone manufacturers, more than doubling expected net profit.
Minelab · Demand · Positive Codan's Minelab metal-detection business started the year strongly on sales of Gold Monster 2000 and GPZ8000 detectors amid a higher gold price.
GE Aerospace and Kratos Complete First Ignition of GEK800 Engine
Kratos Defense & Security Solutions and GE Aerospace announced the successful first ignition of the GEK800 Serial Number 1 turbofan engine on September 21, a milestone in a program the U.S. military has designated the F143-ZZ-100. The test, conducted at Kratos' X-58 facility, achieved a 100% success rate for the development phase and keeps the affordable, high-performance propulsion system on schedule for advanced cruise missiles and uncrewed aerial systems. For Kratos, the milestone supports a Government Solutions segment that posted $379.7 million in Q2 2026 revenue, up 22.0% organically, with Turbine Technologies up 43.3% organically, a consolidated book-to-bill ratio of 1.1x and $2.084 billion in backlog, as the company ramps full-year 2026 revenue guidance to $1.750–$1.810 billion. GE Aerospace's Defense & Propulsion Technologies segment reported $3.4 billion in Q2 2026 revenue, up 16%, and raised full-year DPT operating profit expectations to $1.6–$1.7 billion. Kratos also faces cash conversion pressure, with $11.0 million in Q2 2026 operating cash outflow and $18.9 million in negative free cash flow, while GE's DPT margins face ongoing pressure from investments and inflation.
KTOS · Technology · Positive Kratos achieved first ignition of the GEK800 engine at its X-58 facility, advancing the affordable propulsion program for cruise missiles and UAVs.
KTOS · Capital · Negative Kratos faces cash conversion pressure with $11.0 million Q2 2026 operating cash outflow and $18.9 million negative free cash flow.
GE · Technology · Positive GE Aerospace and Kratos completed the first ignition of the GEK800 turbofan engine, a milestone for the F143-ZZ-100 military propulsion program.
Amprius Technologies wins $75M US defense grant to retrofit battery line
Amprius Technologies shares rose 11% Monday after the company secured a grant of up to $75 million from the U.S. Department of War to retrofit an existing domestic production line for high-energy density battery cells. The grant, awarded through the DoW's Industrial Base Analysis and Sustainment program, will fund the conversion of a U.S.-based electric vehicle battery production line operated by a major South Korean manufacturer to produce batteries for unmanned aerial systems. The retrofitted line is expected to have the capacity to produce 12 million Amprius cells annually when completed in early 2028, with the cells intended to meet domestic sourcing requirements of the National Defense Authorization Act. The total conversion project is expected to cost approximately $100 million, including in-kind investments from Amprius and its South Korean partner. CEO Tom Stepien said the DoW grant is intended to establish a primary source of domestic, NDAA-compliant battery production, adding that the company's technology combined with its South Korean partner's U.S. manufacturing prowess positions Amprius to accelerate adoption of standardized, high-performance pouch cells in a fast-growing market.
AMPX · Regulation · Positive Amprius won a $75M US Department of War grant to retrofit a domestic battery production line, funding capacity for 12M cells annually.
Draganfly Raises $10 Million From Unusual Machines and U.S. Fund
Draganfly Inc. said Monday that Unusual Machines Inc. and a leading U.S. investment fund will each invest $5 million, bringing the total strategic investment to $10 million. The registered direct offering covers 1,869,159 Draganfly common shares at $5.35 per share, generating approximately $10 million in gross proceeds before placement-agent discounts and offering expenses, matching Draganfly's closing share price on Friday, Sept. 25, 2026. Draganfly plans to use the net proceeds to accelerate development of advanced strategic capabilities and provide working capital as demand grows, following recent procurement milestones with the Canadian Armed Forces and continued growth in its U.S. defense operations. CEO and Chairman Cameron Chell said the investment focuses on aligning complementary capabilities rather than the size of the transaction, while Unusual Machines CEO Dr. Allan Evans said the investment will support Draganfly's production growth and deepen the companies' supplier relationship. Jett Capital Advisors LLC and Northland Capital Markets are serving as joint lead placement agents, and Draganfly expects the transaction to close on or about Sept. 30, 2026, subject to customary closing conditions and required regulatory approvals, including approval from the Canadian Securities Exchange and notification to Nasdaq.
Lai Ching-te backs Taiwan joining democracies to develop drones for modern warfare
President Lai Ching-te, Taiwan's leader, said Taiwan needs to tighten cooperation with democratic countries in developing drone technology, which is crucial to waging modern warfare, amid rising military pressure from China. Speaking today at the groundbreaking ceremony for a new drone development center in Chiayi in southern Taiwan, he said that from the battlefields of Ukraine to security in the Indo-Pacific region, drones have become a key fighting force in modern national defense. He called on Taiwan to work with democratic countries to develop a secure and resilient drone supply chain in order to support peace and stability in the Indo-Pacific. His remarks came as the Taiwanese government pushes ahead with military upgrades and higher defense budgets as one of its main policies, after China stepped up military pressure on Taiwan earlier this month. Taiwan's Cabinet proposed adding 145.7 billion Taiwan dollars, about 4.59 billion US dollars, to this year's defense budget. The budget covers the procurement of drones and missile interception systems, including more than 600 surveillance and coastal patrol drones, more than 40,000 coastal attack drones, and more than 100 explosive-laden unmanned boats. Lai said Taiwan has strengths in semiconductors, information and communications technology, and high-precision manufacturing bases that can be leveraged to develop a drone industry.
GE Aerospace and Kratos Complete GEK800 Cruise Missile Engine Ignition Test
GE Aerospace, a unit of General Electric, and Kratos completed a successful ignition test of the new GEK800 cruise missile engine. The milestone advances propulsion systems designed for long range cruise missiles in support of Department of War programs, and highlights fresh engineering and manufacturing capabilities within GE Aerospace focused on high performance, cost focused defense propulsion. The GEK800 ignition ties directly into General Electric's Defense & Propulsion Technologies backlog above US$30b and supports the catalyst around acceleration of next generation engine programs such as adaptive cycle engines and CCA propulsion. For the milestone to matter to shareholders, the next stretch of the GEK800 program needs to hold schedule and convert into volume work, with formal program decisions from the Department of War, a shift from single engine trials to a broader qualification campaign, and signs that GE can fold any eventual production into its FLIGHT DECK supply chain model without adding margin pressure to the wider defense portfolio.
Defense & Geopolitical Fragmentation › Defense Primes — United States ▲Supply
GE · Technology · Positive GE Aerospace and Kratos completed a successful ignition test of the new GEK800 cruise missile engine, advancing its defense propulsion program.
KTOS · Technology · Positive Kratos completed a successful ignition test of the GEK800 cruise missile engine jointly with GE Aerospace.
Saudi ArabiaYemenFranceIranUnited StatesChinaIsrael
Loitering Munitions & Combat UAS▲impact 4
Houthis fire missiles and drones at Riyadh and Yanbu after Macron sends weapons to help Saudi Arabia
Yemen's Houthi group said on the evening of Thursday, September 24, that it had fired missiles and sent drones to attack highly sensitive targets in Riyadh, the capital of Saudi Arabia, as well as facilities belonging to Aramco in Yanbu, a Red Sea port city. It marks a new round of long-range attacks amid an increasingly intense conflict with Saudi Arabia. Meanwhile, French President Emmanuel Macron said France is preparing to send military equipment to help protect Yanbu, a key industrial and energy hub on Saudi Arabia's Red Sea coast. In other conflicts, Iranian President Masoud Pezeshkian said ending the war that has dragged on for seven months depends on a decision by the United States, while China is pushing all parties to reduce tensions. At the 81st regular session of the United Nations General Assembly, Xinhua News Agency reported that representatives of several countries walked out of the chamber in protest while Israeli Prime Minister Benjamin Netanyahu delivered his remarks during the general debate. Chinese President Xi Jinping said at the White House on Thursday, September 24, that both China and the United States have the capacity and the responsibility to develop and manage artificial intelligence technology for the benefit of humanity, and must ensure that such technology always remains under human control. Meanwhile, U.S. airlines came out against the idea of adding passenger flights between the United States and China after President Xi Jinping proposed that the two countries increase direct flights. U.S. airlines argued that adding flights would further favor Chinese carriers, since they can still use flight routes through Russian airspace. In financial markets, the yield on 10-year Japanese government bonds jumped to 3.115% today, the highest level since August 1996. And Denmark's defense intelligence service warned that Russia may carry out limited military attacks on NATO member states in the coming months, assessing that the risk has increased although it remains at a low level.
Defense & Geopolitical Fragmentation › Defense Primes — Europe & Asia ▲Demand
Saudi Aramco · Geopolitics · Negative Houthi missiles and drones targeted Aramco facilities in Yanbu, threatening the company's Red Sea energy infrastructure.
Iranian leader says US must decide to end war as China pushes to ease tensions
Iranian President Masoud Pezeshkian said that ending the war, now in its seventh month, depends on a decision by the United States. Speaking in an interview with Fox News broadcast on Thursday, September 24, he said America must choose whether to end this, after being asked whether the war could end by the end of this year. Fighting continues, with Houthi forces launching a barrage of missiles and drones at targets in Saudi Arabia on the morning of September 25. Saudi authorities said they intercepted six missiles and issued alerts in Mecca, Jeddah and Yanbu. Saudi Arabia, Turkey and Pakistan are preparing an emergency meeting of military commanders to discuss ways to assist Saudi Arabia under the joint Mecca defense agreement, and Saudi Arabia's Grand Mufti called on forces to be ready to fight the Houthis until the group is removed from power. Pezeshkian said the Houthis must take responsibility for their own actions and that Iran is not in a state of war with Saudi Arabia. The Iran issue was also raised at the US-China summit in Washington, where Chinese President Xi Jinping, during a three-day visit to the United States, discussed a range of issues with President Donald Trump, including trade, artificial intelligence, Taiwan and Iran. Zhai Jun, China's special envoy for the Middle East, said the situation in the Middle East was one of the key issues discussed by the US and Chinese leaders, and said the shared views of both sides are important for defusing the conflict. Trump wants China to help pressure Iran to find a way to end the war, after the United States and Iran returned to indirect talks on the sidelines of the United Nations General Assembly in New York. Iranian officials have signaled that the Strait of Hormuz could reopen within seven days if the United States begins to ease its maritime blockade of Iranian ports.
Elroy Air Upsizes PIPE to $175M as Lockheed Martin Ventures Joins
Elroy Air has upsized its previously disclosed PIPE commitments to $175M, with $75M already funded ahead of the closing of its business combination with Inflection Point Acquisition Corp. VII. Existing investors, including Lockheed Martin Ventures and Inflection Point Acquisition Corp. VII, participated in the expanded PIPE financing. Elroy Air recently secured a multi-year U.S. Army contract worth up to $46M, adding to its existing government contracts. Bristow expanded its Chaparral reservations to 15 aircraft from five, alongside a pre-order for up to 100 drones, while Kratos Defense & Security Solutions plans to begin production in late 2026.
Pakistan strikes 10 sites in Afghanistan, citing cross-border drone incursion
Attaullah Tarar, Pakistan's Minister of Information, said on September 24 that the Pakistani military carried out airstrikes on 10 sites in Afghanistan, claiming they were areas used to launch and store drones, after Pakistan's air defence system detected drones sent from Afghan territory the previous day. Tarar said some of the drones were used to attack Pakistan but were tracked and destroyed before reaching their targets, after which the military carried out airstrikes and precise drone strikes on the 10 related locations. He confirmed that the operation was limited to specified military targets and warned that if the Taliban government takes any further action Pakistan views as provocation, Pakistan will respond with firm and decisive measures. However, the Taliban government denied sending drones to attack Pakistan on September 23. Two Taliban spokesmen said Pakistan's strikes today took place in several areas of Khost and Paktia provinces in southeastern Afghanistan, but that there were no deaths from the incidents. The latest strikes come amid tensions between the two countries over armed groups, with Pakistan accusing Afghanistan of harbouring Islamist militants who carry out cross-border attacks, while the Taliban government denies the accusations and says the problem of armed groups in Pakistan is an internal matter. Conflict between the two countries flared again after an attack on a police operations centre in northwestern Pakistan last week that killed at least 24 people, following nearly three months of relative calm. Earlier in the same week, Pakistan's government said it had carried out airstrikes along the Pakistan-Afghanistan border and killed 28 militants, while the Taliban accused the strikes of killing three Afghan civilians. Tensions between the two countries had previously escalated to the point of more than 400 deaths in March, after Pakistan carried out airstrikes in Kabul, which the Taliban government said targeted a drug rehabilitation centre.
XTEND Wins Phase III of USSOCOM Modular Kinetic Lethal Drone Program
XTEND AI Robotics has been awarded Phase III of the U.S. Special Operations Command Modular Kinetic Lethal Drone program, advancing its precision-strike unmanned systems work for U.S. Special Operations Forces. The award is separate from, and follows, XTEND's recent selection as a top performer in the Close-Quarters Battle segment of Gauntlet II under the U.S. Department of War's Drone Dominance Program, where the 10 companies selected are finalists for prototype contracts and awards are not guaranteed. The MKLD solution combines XTEND's Striker, Scorpio 500 and Scorpio 1000 platforms with a common Ground Control Station and the company's XOS operating system, designed to give small tactical units modular, recoverable and reusable precision-strike capabilities across indoor, confined-space, urban and outdoor environments. CEO and Co-Founder Aviv Shapira called Phase III an important milestone in the company's work with the U.S. Special Operations community, saying the focus is on adaptable robotic capabilities that extend Warfighters' reach while shifting risk from the operator to unmanned systems. Phase III builds on previous USSOCOM investment, development, testing and operational feedback and will further mature the MKLD capability.
Robotics & Physical AI › Civil Drones & UAV ▲Demand
Defense & Geopolitical Fragmentation › Autonomous Systems & Counter-Drone ▲Demand
XTEND (Xtend AI Robotics, Inc.) · Demand · Positive XTEND won Phase III of USSOCOM's Modular Kinetic Lethal Drone program, a concrete contract award for its precision-strike unmanned systems.
AEVEX Corp. announced Specter, a new jet-powered autonomous platform under development that will expand its unmanned aircraft systems portfolio with a high-speed, turbojet-powered one-way attack design. The platform is being developed in collaboration with advanced manufacturing company Divergent, whose DAPS digital manufacturing platform is being incorporated into Specter's development to support scalable production and rapid iteration. Specter features a modular, swappable nose section designed to accommodate kinetic, non-kinetic, electronic warfare, intelligence, surveillance, reconnaissance, and future payloads, along with a turbojet propulsion architecture enabling both ground-launched and air-launched variants. AEVEX said the design draws on lessons from thousands of operational deployments and its CompassX autonomy architecture. "Specter reflects our lessons learned on capability from delivering thousands of autonomous systems in theater," said Manan Patel, Chief Technology Officer at AEVEX. "We are not optimizing for a fixed requirement, we are building an architecture that adapts."
Beam Global Signs LOI to Acquire European Drone Company
Beam Global has signed a non-binding Letter of Intent to acquire a vertically integrated European drone technology company that develops, manufactures and sells drones and AI-enhanced drone software. The San Diego-based company said it intends to manufacture the target's drone system, which has received Conditional Approval from the U.S. Department of War, in its existing U.S. and European factories after closing, and to sell the drones and software services across its global footprint. The target's drone product has also been exempted by the FCC from its Covered List as a result of the Conditional Approval, allowing U.S. sales, and Beam said it can build the drones without significant capital investment because it already manufactures drone batteries and owns the patented BeamFlight remote recharging product. Chief Executive Desmond Wheatley called the planned deal one of the most significant strategic advances in the company's history, saying Beam has lacked only a proven drone platform. The transaction remains subject to due diligence, negotiation and execution of definitive agreements and other customary closing conditions, and Beam cautioned there can be no assurance it will be completed on the contemplated terms or at all. The global drone market is estimated at USD 96.4 billion in 2026, up nearly 15% from 2025, and is projected to more than double by 2033, according to a Grand View Research report, with North America controlling roughly 40% and Europe nearly 27% of that market.
BEEM · Capital · Positive Beam Global signed an LOI to acquire a European drone company, a strategic M&A move it calls one of its most significant advances.
Lockheed Martin to Build Five Vectis Stealth Drones Without Air Force Contract
Lockheed Martin's Skunk Works division announced Monday it is proceeding to build four additional Vectis stealth drone fighters, on top of the first Vectis already under construction, even though the U.S. Air Force did not select the company for its Collaborative Combat Aircraft program. In June the Air Force awarded CCA contracts to two privately owned companies, Anduril Industries and General Atomics, which will build the FQ-42 and FQ-44 drones respectively, while the autonomy software to run them is being sold separately; Anduril, Shield AI and RTX won software contracts, and Lockheed Martin, Northrop Grumman, Anduril, General Atomics, RTX and Shield AI were placed on a separate list of potential vendors for other drone software, with further CCA software contracts expected later this year. Lockheed describes Vectis as a Group 5 drone similar in size to the General Atomics MQ-9 Reaper, designed to fly alongside fifth-generation fighters such as the F-35 Lightning II or independently, and to perform surveillance, counter air and strike missions. The company is funding Vectis's development itself, hoping the Air Force will widen subsequent CCA competitions after initially buying Anduril's or General Atomics' offering, a gamble reminiscent of Textron's self-funded Scorpion combat jet about a decade ago, which never found a buyer. Lockheed reported $6.3 billion in net profits and $8.7 billion in positive free cash flow over the last 12 months, carries a market capitalization of just over $123 billion, and pays a 2.6% annual dividend.
Pentagon Awards Boeing $562 Million MQ-25A Contract, Lockheed Martin Over $1.3 Billion
The Pentagon announced nearly $1.9 billion in contract awards and potential contract value on September 14 involving Boeing and Lockheed Martin. Boeing received a $562 million fixed-price incentive Navy contract for low-rate initial production of the MQ-25A Stingray, covering three Lot 1 aircraft plus advance funds for long-lead components for three more Lot 2 aircraft, with initial deliveries not expected until 2029. Lockheed Martin was awarded three separate contracts totaling more than $1.3 billion, including a major missile contract, reflecting Pentagon demand for long-range standoff weapons and mobile precision artillery. Lockheed Martin is also the prime contractor for the Unmanned Carrier Aviation Mission Control System that operates the Stingray fleet. Recent filings showed hedge fund holdings of Boeing falling from 99 to 90 and Lockheed Martin from 83 to 75 between the first and second quarters.
AEVEX Wins $92.2 Million SkyRange Hypersonic Test Support Role
AEVEX has been selected to support the Department of War Test Resource Management Center's SkyRange program under a US$92.2 million contract with a three year ceiling. Under the award, AEVEX will provide airborne range integration, engineering services, flight operations, airborne telemetry relay, resilient communications, and mission data support across Western U.S. and Pacific test corridors. The work ties directly into converting former RQ-4 Global Hawks into Range Hawk platforms, placing AEVEX inside the data and networking layer of hypersonic testing rather than only on the airframe side. The contract aligns with the company's focus on autonomous systems, CompassX software, and high volume production supporting a reported US$8b pipeline, and broadens its role across hypersonic related missions alongside existing launched effects and one way attack work. Investors will watch whether SkyRange triggers follow on work or related awards before the three year ceiling is reached, including new Test Resource Management Center task orders, extensions tied to higher hypersonic test frequency, or additional Range Hawk related contracts over the next 12 to 18 months.
AeroVironment Partners With Nominal to Digitize Production and Test Data
AeroVironment announced a new collaboration with software provider Nominal to overhaul production and test data management across its autonomous and counter-UAS hardware programs. The partnership focuses on digitizing real-time manufacturing and test data, with Nominal's integrated platform expected to support AeroVironment as it scales output of mission-critical systems for domestic and international customers. AeroVironment is a US defense technology provider with a US$7.8b market cap that builds robotic systems and related services for government agencies and commercial clients worldwide. The company's strategic focus on modular, interoperable, and software-defined platforms, including the newly launched AV Halo open software ecosystem, aligns with the accelerating adoption of AI-powered autonomy and network-centric warfare. The move is seen as addressing operational discipline concerns, including margin pressure after the BlueHalo deal and internal control questions, by centralizing test data from early R&D through end-of-line checks.
AVAV · Technology · Positive AeroVironment partners with Nominal to digitize production and test data across its autonomous and counter-UAS programs, addressing operational discipline and margin concerns.
Nominal · Demand · Positive Nominal is the software provider chosen by AeroVironment to supply its integrated data platform for production and test management.
AeroVironment Signs Long-Term Agreement With Attalon for Valaris Laser Platform
AeroVironment has executed a long-term agreement with Attalon for delivery of Attalon's Valaris high-energy laser platform across AeroVironment's expanding portfolio of high-energy laser programs. The agreement supports AeroVironment's LOCUST and broader high-energy laser product line as demand for deployable directed energy capabilities continues to grow, with Attalon supplying the mission-ready laser subsystems needed to scale those systems from development and demonstration into sustained operational use. Mary Clum, AeroVironment's president of Space, Cyber, and Directed Energy, said the LTA lets the company proactively scale LOCUST production capabilities ahead of immediate demand, and called Attalon's Valaris S beam-combining laser subsystem central to that effort. To support the agreement and AeroVironment's growing high-energy laser product line, Attalon is investing $15 million to expand production capacity, grow its skilled workforce, and add capital equipment. Attalon Chief Executive Officer John Bergeron said directed energy has reached the moment when delivering capability at production scale, and sustaining it through its service life, becomes the defining challenge.
AVAV · Demand · Positive AeroVironment signed a long-term agreement with Attalon to supply Valaris laser subsystems for its LOCUST and high-energy laser programs, supporting scaling to sustained operational use.
Attalon, Inc. · Demand · Positive Attalon secured a long-term agreement with AeroVironment to deliver its Valaris high-energy laser platform and is investing $15M to expand production capacity.
Swarmer's Ratel Robotics Deal Could Drive $200M in 2027 Revenue
Swarmer, Inc. could reach $200 million in pro forma revenue and $20 million in adjusted EBITDA in 2027 through its pending acquisition of Ukrainian unmanned-ground-vehicle maker Ratel Robotics, according to a research note from Lucid Capital Markets. Swarmer, whose non-executive chairman is Blackwater founder Erik Prince, has a definitive agreement to buy Ratel for up to $224 million, and the note cites $86 million in secured contracts and roughly 37% of Ukrainian government UGV procurement spending. The company will pay about $7.2 million in cash and 1.1 million shares at closing, with most of the remainder tied to Ratel meeting earnout targets. Swarmer held roughly $25 million in cash at the end of the second quarter and raised another $18 million through its equity line as of Aug. 17, giving it about $43 million in pro forma cash. Lucid set a $60 price target based on 24 times EV/sales of an estimated $40 million in 2028 revenue excluding the Ratel deal, while on a pro forma basis, assuming Ratel hits its earnouts, Swarmer could trade at around 4 times 2027 EV/sales and 35 times 2027 EV/EBITDA, compared with an average of 5.5 times 2027 EV/sales for peers including Ondas Holdings, Red Cat Holdings, Unusual Machines and Draganfly.
Robotics & Physical AI › Civil Drones & UAV Competition
SWMR · Capital · Positive Lucid Capital note projects $200M 2027 pro forma revenue and sets a $60 price target on Swarmer's pending $224M Ratel Robotics acquisition.
AeroVironment Shares Jump 5.7% on Nominal Data Platform Deal
AeroVironment shares jumped 5.7% in the afternoon session after Nominal announced a strategic collaboration with the aerospace and defense company to supply test and operations data platform infrastructure supporting defense hardware production across multiple programs. Under the agreement, AeroVironment adopted Nominal's data platform to unify and manage engineering test capture, cross-team reviews, and manufacturing traceability across its uncrewed aircraft and counter-UAS operations. The collaboration is designed to power accelerated test and production data for mission-critical hardware at scale across the company's various development programs. The move comes four days after the stock gained 10.4% on record second-quarter revenue of $480.5 million, up 5.7% year-over-year and above analyst estimates of $457.6 million, alongside a record funded backlog of $1.5 billion, up 37% from a year earlier. AeroVironment is down 39.6% since the start of the year and trades at $154.84 per share, 62.2% below its 52-week high of $409.83 from October 2025.
AVAV · Technology · Positive AeroVironment adopted Nominal's data platform to unify engineering test capture and manufacturing traceability across its uncrewed aircraft and counter-UAS programs.
Nominal · Demand · Positive Nominal announced a strategic collaboration to supply its test and operations data platform infrastructure to AeroVironment across multiple defense programs.
Saudi Crown Prince Discusses CENTCOM Commander Amid Houthi Tightening Grip on Bab el-Mandeb Strait
Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud discussed the latest regional situation and bilateral relations between Saudi Arabia and the United States during a meeting with Admiral Brad Cooper, commander of United States Central Command, or CENTCOM, in Jeddah today. The meeting took place amid intense clashes between the Houthi group in Yemen and Saudi Arabia. Reuters reported that Crown Prince Mohammed bin Salman asked President Donald Trump for military assistance to strike the Houthis in Yemen, but President Trump declined to approve direct U.S. military strikes on the Houthis. Meanwhile, the Houthis disclosed today that they fired long-range missiles and sent dozens of drones to attack an air base in southwestern Saudi Arabia. In addition, last Thursday the Houthis seized the strategic port city of Mokha, then pushed south into the Bab el-Mandeb Strait on Friday and captured Mayun Island, located in the middle of the strait, enabling the Houthis to tighten their control over the Bab el-Mandeb Strait, which is vital to shipping and connects the Red Sea to the Gulf of Aden.
Terra Drone to Localize Flight Controllers for Defense Drones
Terra Drone announced on the 14th that it has developed its own flight controller for defense drones and will localize production. Following batteries, the company aims to build a system for producing the core component that serves as the drone's "brain" in Japan, moving away from overseas dependence. The controller is being developed on the premise of being installed in 300 units of a general-purpose defense drone that the company won an order for from the Acquisition, Technology & Logistics Agency in May for approximately 115 million yen and is scheduled to deliver by the end of September this year, and it is also planned to be installed in 1,767 units scheduled for delivery in March next year. According to the Ministry of Economy, Trade and Industry, about 90% of Japan's industrial drone market is made up of overseas products, with components also dependent on China, Taiwan and elsewhere, and for defense use, from the standpoints of geopolitical risk, export controls and cybersecurity, a system capable of managing and mass-producing airframes and key components domestically is essential. The company's consolidated final profit and loss for the February-July 2026 period, announced the same day, showed a loss of 680 million yen, compared with a loss of 394 million yen in the same period a year earlier, as selling, general and administrative expenses swelled due to the expansion of its defense business structure, subsidy income also decreased, and an extraordinary loss was recorded. It left unchanged its forecast of a final loss of about 1.2 billion yen for the fiscal year ending January 2027, and sales from the defense business are not factored into its full-year consolidated earnings forecast for the fiscal year ending January 2027. President Toru Tokushige said at a briefing that sales from the defense business will be "recognized from the third quarter, the August-October period, and accordingly, full-year consolidated earnings are expected to exceed the initial forecast." The company also announced the same day that it will invest through a European group company to make a Ukrainian company that handles interceptor drones a consolidated subsidiary, aiming to expand its defense business by incorporating a product lineup that intercepts the Ukrainian company's small unmanned aircraft. It also announced that it will consider commercializing a high-speed interceptor drone in anticipation of dealing with the jet-engine-equipped attack drone Shahed, and it is also considering establishing a joint venture with a Czech company that develops defense drone systems.
278A.JP · Capital · Negative Consolidated loss widened to 680 million yen for Feb-July 2026 on higher SG&A and lower subsidy income, with a full-year loss of about 1.2 billion yen forecast.
278A.JP · Technology · Positive Terra Drone developed its own flight controller for defense drones and will localize production of this core component in Japan.
North Korea Conducts Missile and Attack Drone Drills After US-Japan-South Korea Wrap Up Freedom Edge Exercises
North Korea revealed on September 14 that it had held drills involving ballistic missiles, cruise missiles, and attack drones, just one day after Japan, South Korea, and the United States completed their military exercises. Earlier, South Korea's Joint Chiefs of Staff disclosed on Saturday, September 12, that South Korea had detected the launch of multiple missiles from the Wonsan area on North Korea's east coast toward the Sea of Japan, with the missiles traveling about 250 kilometers. The Korean Central News Agency reported that Kim Jong Un, North Korea's leader, did not attend this live-fire drill, which was commanded by Pak Jong Chon, vice chairman of the Central Military Commission of North Korea's ruling party, and Yu Chang Son, head of the North Korean military's artillery bureau. Kyodo News reported that this drill, which included the use of large multiple rocket launchers, aimed to familiarize the military with the operating procedures of an integrated personnel control system and to enhance the strategic counter-response readiness of attack units at all levels. Meanwhile, Rodong Sinmun, North Korea's official newspaper, did not report on the drill last Saturday and has not published any article about the country's missile launches since August, in contrast to the traditional practice of state media, which usually announces missile launch news the following morning. Japan, South Korea, and the United States completed the five-day Freedom Edge exercise on Friday, September 11, which focused on real-time information sharing and the integration of air, maritime, missile defense, cyber, and medical capabilities.
United StatesThailandEuropean UnionJapanSouth KoreaTaiwanSwitzerlandLiechtenstein
Loitering Munitions & Combat UAS▼impact 4
US imposes tariffs of up to 100% on drone imports, Thailand's exports at risk
The United States has announced additional import tariffs on unmanned aircraft systems and components under Section 232 of the Trade Expansion Act of 1962, with US President Donald Trump issuing a formal proclamation on August 13, 2026, citing national security grounds. Mrs. Arada Fuengthong, Director-General of the Department of Foreign Trade under the Ministry of Commerce, disclosed that the additional tariff rates are divided as follows: goods in Annex I are subject to a 100% tariff, covering unmanned aircraft with a maximum takeoff weight exceeding 25 kilograms, unmanned aircraft equipped with thermal imaging cameras, unmanned aircraft operating bases, and certain key components, effective from September 3, 2026. Goods in Annex II are subject to a 25% tariff, covering unmanned aircraft with a maximum takeoff weight not exceeding 25 kilograms, also effective from September 3, 2026. Goods in Annex III are subject to a 25% tariff on certain components, taking effect from February 9, 2027, or 180 days after the announcement, in order to allow opportunities to relocate or expand production in the United States. Annex IV is a reference document comparing the normal customs classifications of the controlled goods in Annexes I through III with the customs classifications in Chapter 99 of the Harmonized Tariff Schedule of the United States, which operators must verify before exporting. In addition, the United States has set a maximum total tariff rate of 15% for goods from the European Union, Japan, South Korea, Taiwan, Switzerland, and Liechtenstein, and no more than 10% for the United Kingdom, if the specified conditions are met. Thailand is not among the countries granted these special tariff rates. Arada added that Thai export statistics for unmanned aircraft and components reflect that the United States is a key export market. Between 2023 and 2025, Thailand exported unmanned aircraft under tariff heading 8806 to the United States worth 0.78 million dollars in 2023, rising to 3.28 million dollars in 2024 and 8.64 million dollars in 2025, an average annual growth rate of 232.82%. Meanwhile, exports of components under tariff heading 8807 to the United States were worth 75.78 million dollars in 2023, rising to 75.84 million dollars in 2024 and 86.55 million dollars in 2025, reflecting that the measure could significantly affect Thai operators. The Department of Foreign Trade therefore urges Thai operators exporting products related to UAS systems, including unmanned aircraft components, to thoroughly check the lists of goods in Annexes I through IV in order to plan to mitigate the impact of the measure, particularly in terms of cost management and pricing.
Draganfly wins five-year Canadian military drone contract
Draganfly has been awarded a five-year contract by the Canadian government to supply uncrewed aircraft systems and training to the Canadian armed forces. The company will provide 100 low-cost tactical intelligence, surveillance, and reconnaissance uncrewed aircraft systems, along with associated ground control stations, payloads, data links, support equipment, documentation, spare parts, and training. Under the terms of the contract, the Canadian government holds an option to order another 4,900 UAS systems for a contractual value of CAD24.25M, or $17.5M, which would bring the total number of UAS systems from Draganfly to 5,000. Shares are about 6% higher ahead of Friday's open, positioning Draganfly to trade in the green for the first time this week.
DPRO · Demand · Positive Draganfly awarded a five-year Canadian military contract to supply 100 UAS systems plus training, with an option for 4,900 more.
Ukraine says Russia risks total manpower exhaustion by 2028 after casualties outpace new recruitment
Lieutenant General Oleh Ivashchenko, head of the intelligence directorate at Ukraine's Ministry of Defence, assesses that the Russian military's manpower and military resources could face complete exhaustion by 2028, as troop morale has fallen sharply and battlefield casualties outpace new recruitment. Ivashchenko told The Times that Russia still has military and economic resources for next year, but that Russia's resources are expected to stretch only another 16 months. Russia recruits roughly 1,000 new personnel per day, sometimes as many as 1,200, but yesterday casualties reached 1,410, and the day before stood at 1,511, of which about 60 percent were killed in action. Meanwhile, a Russian drone struck a shopping mall in the city of Pavlohrad in southeastern Ukraine, killing at least 5 people and injuring 67 others. Officials said shops and vehicles were damaged in the attack, which took place in broad daylight at a time when many people were on the streets, and among the injured were children aged 13, 14 and 15.
AeroVironment Q2 Revenue Beats Estimates on Record Defense Contract Wins
AeroVironment reported second-quarter CY2026 revenue of $480.5 million, up 5.7% year on year and ahead of analyst estimates of $457.6 million, while adjusted earnings per share of $0.59 far exceeded the $0.25 consensus. The company reconfirmed full-year revenue guidance of $2.18 billion at the midpoint, which came in 0.7% below analysts' estimates, and reiterated full-year adjusted EPS guidance of $3.18 at the midpoint, though its EBITDA guidance of $315 million at the midpoint fell short of the $318.2 million analysts expected. Management pointed to major U.S. Army awards, including a $465 million Enduring High-Energy Laser program for its LOCUST directed energy platform, a $117 million Long-Range Reconnaissance contract for its P550 unmanned system, and a $51 million award for Switchblade 600 loitering munitions, alongside international orders such as a Puma procurement for Germany's LARUS program and the first direct commercial sale of the LOCUST laser weapon system to an international ally. AeroVironment ended the quarter with a record $1.5 billion funded backlog, up 37% year on year, providing 86% revenue visibility to the midpoint of full-year guidance, and is expanding capacity through a $100 million innovation center in Southern California, added production space in Salt Lake City, and new or expanded operations in Albuquerque and Huntsville. Chief Financial Officer Sean Woodward cautioned that the pace of government budget approvals remains a potential risk factor even as visibility stays high.
Defense & Geopolitical Fragmentation › Autonomous Systems & Counter-Drone ▲Demand
AVAV · Capital · Positive Q2 revenue and EPS beat estimates, though full-year EBITDA guidance came in slightly below consensus.
AVAV · Demand · Positive Record defense contract wins including $465M Army laser, $117M P550, and $51M Switchblade awards drove a record $1.5B funded backlog, up 37% YoY.
AeroVironment Shares Jump 10.4% on Record Q2 Revenue and Backlog
AeroVironment reported record second-quarter revenue of $480.5 million, up 5.7% year-over-year and beating analyst estimates of $457.6 million by 5%, sending shares up 10.4% in the afternoon session. The $7.10 billion defense contractor posted adjusted EBITDA of $53.4 million, an 11.1% margin that crushed estimates by nearly 37%, while GAAP operating margins improved to -2.3% from -15.2% a year ago. Adjusted earnings came in at $0.59 per share, massively outperforming the $0.25 consensus, and free cash flow improved to negative $35.95 million from negative $146.5 million in the prior-year period. Bookings of $0.7 billion produced a book-to-bill ratio of 1.4 and expanded funded backlog to a record $1.5 billion, a 37% increase from a year earlier. Management reiterated full-year guidance for revenue of $2.18 billion and adjusted EPS of $3.18 at the respective midpoints, though the full-year EBITDA guidance midpoint of $315 million landed slightly below the $318.2 million consensus.
AeroVironment Jumps 5% on First International LOCUST Laser Order
AeroVironment shares rose 5% to $147.90 in early Thursday trading after the company announced its first international commercial order for the LOCUST directed-energy counter-UAS laser weapon system, a $50 million deal covering an initial delivery of systems and associated support. The order follows AeroVironment's selection for the U.S. Army's $464.8 million Enduring High Energy Laser production contract, which the company describes as the first production award for high-energy laser weapon systems in U.S. history. The company also reported fiscal Q1 2027 adjusted EPS of $0.59, beating the $0.2479 consensus, on revenue of $480.49 million that grew 5.7% year over year, with the Autonomous Systems segment contributing $346 million, up 21%. Funded backlog reached a record $1.5 billion and management reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion. CEO Wahid Nawabi said LOCUST gives customers an affordable, scalable way to defeat drone threats without relying solely on expensive interceptors, and the company says engagements cost less than $10 per shot; management framed LOCUST as a potential half-a-billion-dollar-plus annual franchise over time. The move was company-specific, with the Defiance Drone and Modern Warfare ETF down 1% and the SPDR S&P 500 ETF Trust off 0.46%, while Ondas slipped 1% to $7.21 and Unusual Machines held steady at $24.34; AeroVironment stock remains down 39% year to date.
AeroVironment Jumps 6% on Record FQ1 Revenue, Cooper Companies Sinks 16%
AeroVironment shares jumped 6% after the defense contractor reported record FQ1 revenue of $480.5M, up 6% year over year and $24.5M above consensus, while adjusted EPS of $0.59 more than doubled the $0.25 estimate. Autonomous Systems revenue climbed 21% to $346M, led by a 71% increase in uncrewed aircraft systems sales to $120M, while Space, Cyber, and Directed Energy revenue fell 21% to $134.5M. Gross margin expanded to 26% from 21%, though adjusted EBITDA declined to $53.4M from $56.6M, and the company maintained its FY2027 revenue outlook of $2.125B-$2.225B and adjusted EPS guidance of $3.02-$3.34, both midpoints below consensus. The Cooper Companies tumbled 16% after its board decided to retain CooperSurgical following a strategic review, citing a valuation disconnect, and cut its FY2026 revenue guidance to $4.229B-$4.252B from $4.285B-$4.321B, below the $4.31B consensus, while lowering non-GAAP EPS guidance to $4.51-$4.55 from $4.58-$4.66 and raising its share repurchase authorization to $3B from $2B. American Eagle Outfitters plunged 11% despite beating Q2 expectations, with sales rising 9.4% year over year and profit up 34% to $0.79 per share, a result that included nearly $200M in tariff refunds, while the namesake brand's comparable sales declined 1%, partly offset by a 19% increase at Aerie and OFFLINE. The retailer expects Q3 operating income of $110M-$115M with mid-to-high-single-digit comparable sales growth, and raised its FY2026 operating income guidance to $540M-$550M from $390M-$410M.
Defense & Geopolitical Fragmentation › Autonomous Systems & Counter-Drone ▲Demand
AVAV · Capital · Positive AeroVironment jumped 6% on record FQ1 revenue of $480.5M and adjusted EPS of $0.59 that more than doubled the $0.25 estimate.
COO · Capital · Negative Cooper Companies tumbled 16% after its board decided to retain CooperSurgical and cut FY2026 revenue and EPS guidance below consensus.
AEO · Tariff · Negative American Eagle plunged 11% despite beating Q2, as results leaned on nearly $200M in tariff refunds and the namesake brand's comparable sales fell 1%.
Teledyne Energetics UK wins $15.4M drone energetics contract in Europe
Teledyne Energetics UK, a subsidiary of Teledyne Technologies Incorporated, has secured a $15.4M contract with a European defence technology manufacturer to supply specialist energetics products for advanced unmanned systems. The agreement establishes a long-term supply framework with potential total value exceeding $50M as production requirements scale. Teledyne will deliver advanced initiation and energetic solutions designed for compact, high-reliability applications in next-generation European drone platforms. The award reinforces Teledyne's role as a key technology partner in expanding sovereign European defense manufacturing capabilities and supply-chain resilience for unmanned systems. Deliveries under the agreement will begin immediately to support ongoing development activity, with expectations of expanded volume as production increases.
TDY · Demand · Positive Teledyne Energetics UK won a $15.4M (potentially $50M+) contract to supply energetics products for European drone platforms, a concrete order for its products.
Proposed Drone Restrictions Could Boost U.S. Manufacturers, Piper Sandler Says
A potential federal ban on the sale of certain previously approved foreign-made drones could accelerate the growth of the U.S. drone industry, according to a Piper Sandler research report published Wednesday. The Federal Communications Commission is considering restrictions that would prohibit the importation and sale of foreign uncrewed aircraft systems and critical components placed on its Covered List, with public comments due September 2. Unlike earlier measures focused on preventing new equipment certifications, the proposal could also affect products that have already received approval and are currently available for sale, including drones with thermal-imaging or LiDAR capabilities, aircraft equipped to dispense aerosols, drone docking stations, and drones weighing more than 55 pounds. If adopted, the restrictions could significantly shorten the timetable for reducing U.S. reliance on Chinese drone technology, creating opportunities for domestic manufacturers of drones, optical systems, components, and supporting technology. The report also highlighted a second catalyst: new investments from the Office of Strategic Capital under the federal Drone Dominance Program, which in July made a conditional $820 million loan commitment to an unnamed private drone supplier to establish high-volume U.S. production of propulsion, power, control systems, vision technology, and other components. Piper Sandler named AeroVironment, Unusual Machines, and LightPath Technologies as its preferred publicly traded companies in the drone and drone-supply-chain market, maintaining Overweight ratings with price targets of $235, $38, and $15, respectively.
Zelensky Warns Airlines to Avoid Russian Airspace as Ukraine Expands Drone Attacks
Ukrainian President Volodymyr Zelensky has called on airlines to avoid Russian airspace, warning that the risks to aviation have increased following Ukraine's expansion of long-range drone operations into Russian territory. In his daily address, Zelensky said Ukraine wants to warn all airlines still using Russian airspace, as well as insurance companies, that safety in that airspace has significantly declined. While most Western airlines have avoided Russian airspace since 2022, carriers from China and the Gulf, including Qatar and the United Arab Emirates, continue to use these routes, which shorten flight times between Asia and Europe. In response, President Vladimir Putin dismissed the threat as state terrorism and vowed to intensify attacks on Ukraine while ruling out negotiations, saying, "You don't negotiate with terrorists." Tensions are rising as Ukraine expands its drone strikes and Russia plans a major assault on Ukraine's energy infrastructure, extending the risks of war to airspace and civilian activities.
AeroVironment Forms AV Eagle Joint Venture in Greece
AeroVironment has formed AV Eagle, a new joint venture in Greece with Athens-based Eyeonix SA, to expand its presence in Europe. The venture marks AeroVironment's first major industrial footprint in Europe, focused on local production of unmanned systems and loitering munitions. AV Eagle plans to work with the Hellenic Center for Defence Innovation to pursue defense and civil protection contracts across European markets. The company, with a market cap of about $7.7 billion, aims to convert this setup into concrete European contracts, targeting operational status in fiscal 2027 and production by 2028.
AVAV · Demand · Positive AeroVironment forms AV Eagle JV in Greece to pursue European defense and civil protection contracts for its unmanned systems and loitering munitions.
Eyeonix SA · Demand · Positive Athens-based Eyeonix SA is the JV partner, gaining local production of unmanned systems and loitering munitions for European markets.
Hellenic Center for Defence Innovation · Demand · Neutral The Hellenic Center for Defence Innovation is a partner the JV plans to work with to pursue defense contracts, but no concrete deal is stated.
Kratos and GE Aerospace Secure U.S. Air Force Contract for Missile Engine
Kratos Defense & Security Solutions and GE Aerospace announced that their jointly developed GEK800 engine received the U.S. Military Engine Type Designation F143-ZZ-100 and secured a U.S. Air Force Engineering, Manufacturing, and Development contract for the Joint Air-to-Surface Standoff Missile. The low-cost, high-performance turbofan is designed for cruise missiles and uncrewed aerial vehicles, marking a milestone in aligning defense primes with specialized tech disruptors. In Q2 2026, GE Aerospace reported $13.3 billion in GAAP revenue, up 21% year-over-year, and adjusted EPS of $2.02, up 22%, while Kratos reported revenue of $458.8 million, a 30.5% total increase and 19.1% organic growth, with adjusted EPS of $0.21. Kratos also raised its full-year organic revenue growth guidance to 18%–23%, backed by a $2.08 billion backlog, while GE raised its full-year guidance and generated $3.0 billion in quarterly free cash flow. Kratos faces execution pressures with negative free cash flow of $18.9 million in Q2, while GE's bear case includes supply chain bottlenecks and cyclical risks. Hedge fund data shows 45 funds holding Kratos and 113 holding GE in Q2, with Cathie Wood's Ark Investment Management increasing its Kratos stake by 34% to 4.67 million shares.
KTOS · Demand · Positive Kratos and GE Aerospace won a U.S. Air Force contract for the GEK800 engine, directly increasing demand for Kratos's defense offerings.
GE · Demand · Positive GE Aerospace secured a U.S. Air Force contract for the GEK800 missile engine, boosting demand for its defense products.
AeroVironment wins $51M U.S. Army Switchblade 600 order
AeroVironment has received a $51 million U.S. Army delivery order for additional Switchblade 600 Block 2 loitering munition systems, along with Block 1 systems for a Foreign Military Sale to a key U.S. ally. The award falls under the Army's existing five-year, $990 million IDIQ contract for Lethal Unmanned Systems, issued in August 2024. This follow-on procurement signals continued Army demand for AeroVironment's next-generation Switchblade systems.
Terra Drone Passes Defense Equipment Agency's Interceptor Drone Demonstration Test
Terra Drone announced that its domestically produced interceptor drone, the Terra B1, has passed the demonstration test in the Defense Equipment Agency's 'Interceptor Drone Early Acquisition Program.' Additionally, CSSHD is investing in TechMagic, which specializes in cooking robots and business automation solutions. Osaka Titanium plans to raise up to 22 billion yen through the issuance of 7 million new shares and the sale of 1.05 million shares, raising concerns about supply-demand deterioration. Toyo Asano has revised down its consolidated earnings forecast for the fiscal year ending February 2027. Tokio Marine announced a stock split of 1 share into 15 shares and the introduction of a shareholder benefit program. JT received dividends from its consolidated subsidiaries, Morinaga Milk changed its shareholder benefit program and record date, and Sasadoku Printing newly introduced a shareholder benefit program. Seirogan (Daiko Pharmaceutical) applied for a market change to the Tokyo Stock Exchange Standard Market, and Intage Holdings announced the establishment of a share buyback framework and a change of its corporate name.
