We recently published a list of the 10 Best Military Drone Stocks to Buy Now. In this article, we will take a look at where The Boeing Company (NYSE:BA) stands against other best drone stocks.
Modern warfare is rapidly evolving from being the sole domain of soldiers, tanks, and fighters. Swarms of UAVs, guided by artificial intelligence, now fill the skies and can strike enemy targets with pinpoint accuracy. This revolution in warfare has blurred the lines between man and machine, resulting in a need for reassessment of military capabilities.
READ ALSO: 10 Countries with the Most Military Drones in the World and Goldman Sachs Defense Stocks: Top 12 Stock Picks.
The demand for drones has surged over the last few years, with countries actively using UAVs for intelligence, reconnaissance, surveillance, and target operations. These aerial vehicles offer a bird’s eye view of the battlefield, making it difficult for targets to move and hide from the conflict zone.
Drones were a prominent feature of the conflict in the Nagorno-Karabakh region between Azerbaijan and Armenia in 2020. They have been clouding the skies across several towns and cities during the Russia-Ukraine war, which defense experts see as the arrival of a new threat in the aerial defense space.
The US has been operating drones for about a century, having first deployed them during World War II and more recently during the wars in Afghanistan and Iraq. In 2023, the Department of Defense (DoD) announced Replicator, an initiative to build ‘attritable autonomous systems’ in mass over the next 18-24 months. Moreover, the Air Force is developing drone wingmen to fly alongside its fighter and bomber jets under the Collaborative Combat Aircraft (CCA) program. The first two CCA fighters were unveiled in March this year.
However, defense experts view the proliferation of UAVs as a security threat, with American troops increasingly coming under attack from non-state actors in the Middle East. Policymakers in Washington also worry about China getting a leaf out of the Kremlin’s book (Ukraine war) and launching similar strikes against US interests in the Pacific.
Much work is going into guarding countries against the threats posed by UAVs. In October 2024, the DoD awarded a $250 million contract to Anduril Industries to counter drone attacks against American forces. Under the contract, the US will receive 500 recoverable Roadrunner interceptors, which are reusable drones that can intercept incoming drones or land back on the ground if they are not engaged.
With that said, let’s head over to the list of the best drone stocks to buy.
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Methodology
We sampled stocks from ETFs with exposure to military drones and our previous articles on the subject. Both pure-play military drone makers and defense contractors with drone programs were included in our pool. From there, we selected the 10 stocks with the highest number of hedge fund investors, based on Insider Monkey’s database of over 1,000 prominent hedge funds as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 103
The Boeing Company (NYSE:BA) is a leading aerospace company that manufactures commercial airplanes, space systems, and defense equipment for customers in over 150 countries. It also boasts an impressive lineup of uncrewed vehicles that operate in the air, across the sea, on the ground, and beyond the Earth’s atmosphere.
Last year, The Boeing Company (NYSE:BA) delivered the first MQ-25 Stingray to the U.S. Navy for testing. This will be the service’s first carrier-based UAV. The drone will provide aerial refueling capabilities to extend the combat range of deployed fighter jets. Other prominent UAVs built by the company include the ScanEagle and MQ-28 Ghost Bat.
On April 23, The Boeing Company (NYSE:BA) declared financial results for the first quarter of fiscal 2025. It reported a net loss of $31 million, significantly lowering the losses from $355 million a year earlier. The company’s revenue rose 18% year-over-year to $19.5 billion. It also improved its cash burn to about $2.3 billion from the nearly $4 billion in the first quarter of 2024.
Following the earnings call, several analysts raised their price targets for the stock. Investor sentiment in The Boeing Company (NYSE:BA) has also improved over the past month, after its selection by the US Air Force to design and build next-generation fighter aircraft, the F-47, to replace the F-22 Raptor.
Overall, BA ranks 1st among the 10 Best Military Drone Stocks to Buy Now. While we acknowledge the potential of drone companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
