Elbit Systems: A Top Pick for Military Drones Investing Today

We recently released a compilation of the 10 Top Military Drone Stocks to Invest in Today In this piece, we will examine how Elbit Systems Ltd. (NASDAQ:ESLT) measures up against some of the top contenders in the drone stock market.

Contemporary combat is swiftly transforming beyond just involving troops, armored vehicles, and fighter jets. Currently, swarms of unmanned aerial vehicles (UAVs), driven by artificial intelligence, dominate the airspace and can accurately hit adversary objectives. This transformation in warfare has obscured the boundaries between human operators and technology, leading to an urgent requirement to reconsider military capacities.

READ ALSO: 10 Nations Boasting the Highest Number of Military Drones Globally and Goldman Sachs' Recommended Defense Stocks: Leading 12 Choices .

In recent years, there has been a significant increase in the demand for drones as various nations utilize Unmanned Aerial Vehicles (UAVs) extensively for gathering intelligence, conducting reconnaissance missions, performing surveillance activities, and executing targeted operations. These airborne systems provide an unparalleled overhead perspective of combat zones, complicating movements and concealment efforts for adversaries within these areas.

Unmanned drones became a significant element in the clash over the Nagorno-Karabakh area involving Azerbaijan and Armenia in 2020. These devices have also loomed overhead above multiple urban centers throughout the Russia-Ukraine conflict, marking what analysts perceive as an emerging challenge for air defenses.

For nearly a hundred years, the U.S. has utilized unmanned aerial vehicles (UAVs), initially deploying them during World War II and most recently during conflicts in Afghanistan and Iraq. In 2023, the Department of Defense (DoD) introduced Project Replicator, aimed at producing large numbers of 'attritable autonomous systems' within the coming one-and-a-half to two-year period. Additionally, the Air Force is working on drone escorts designed to accompany their fighter planes and bombers as part of the Collaborative Combat Aircraft (CCA) project. This year, in March, the first pair of these CCA aircraft was revealed.

Nevertheless, specialists in military defense see the increasing availability of unmanned aerial vehicles (UAVs) as a significant security risk, particularly because U.S. forces are facing more attacks from non-governmental groups in the Middle East. Additionally, officials in Washington are concerned that China might take cues from Russia’s playbook during the Ukraine conflict and initiate comparable assaults on American assets across the Pacific region.

A significant amount of effort is being directed towards protecting nations from the dangers presented by unmanned aerial vehicles (UAVs). In October 2024, the Department of Defense (DoD) granted a $250 million contract to Anduril Industries for developing systems to thwart drone assaults on U.S. troops. As part of this agreement, the country will be supplied with 500 recuperative Roadrunner interceptors—drones designed for reuse that either neutralize approaching drones or safely return to earth if they remain unengaged.

Given this introduction, let’s move on to the list of top drone stocks worth investing in.

A drone aircraft up in the air, its outline lit up by the nighttime glow.

Methodology

We drew samples from ETFs that have investments linked to military drones, along with referencing information from our earlier pieces on this topic. Our selection encompassed both companies exclusively involved in manufacturing military drones and larger defense firms that also run drone initiatives. Following this, we identified the top 10 stocks among them, choosing those backed by the greatest number of hedge fund investors according to Insider Monkey’s extensive record of more than 1,000 major hedge funds up until the fourth quarter of 2024.

Why do we pay attention to the stocks that hedge funds accumulate? It's straightforward: our analysis indicates that mimicking the leading stock choices from premier hedge funds allows us to surpass market performance. Each quarter, our monthly publication features 14 small-cap and large-cap equities selected through this approach. Since May 2014, this method has yielded a return of 373.4%, exceeding its benchmark by 218 percentage points. see more details here ).

Elbit Systems Ltd. (NASDAQ: ESLT )

Number of Hedge Fund Owners: 15

Elbit Systems Ltd. (NASDAQ: ESLT), headquartered in Israel, specializes in developing a wide array of aerospace, ground, and maritime technologies mainly aimed at enhancing defense capabilities and securing domestic safety. This firm provides an extensive lineup of unmanned aerial vehicles, including compact models like the portable Skylark LEX up to more versatile platforms such as the multifunctional Hermes-900.

Last November, Elbit Systems Ltd. (NASDAQ:ESLT) secured contracts totaling $335 million for providing military equipment to a nation in Europe. This agreement, set to unfold across thirty-nine months, encompasses PULS missile launchers along with missiles and Hermes 900 drones outfitted with sophisticated payload capabilities.

The Hermes 900 is the biggest unmanned aerial vehicle (UAV) produced by Elbit Systems Ltd. (NASDAQ:ESLT). This aircraft is tailored for multiple security tasks including maintaining control of an area, continuous monitoring, gathering intelligence, conducting reconnaissance, and identifying targets both on land and at sea. The system is currently utilized by more than two dozen clients around the globe.

Elbit Systems Ltd. (NASDAQ: ESLT), which specializes in counter-Unmanned Aircraft System (UAS) technologies, secured a contract worth $60 million earlier this year when it was selected by a NATO member state in Europe for its comprehensive C-UAS solution. This firm stands out among top picks for investment, particularly since at least 15 hedge funds were reported to have stakes in Elbit during the fourth quarter of 2024, based on data provided by Insider Monkey.

Elbit Systems Ltd. (NASDAQ:ESLT), on March 18, announced its consolidated financial outcomes for the fourth quarter of fiscal year 2024. The revenue stood at $1.93 billion, which marks an increase compared to $1.63 billion recorded in the same time frame last year. Excluding one-time items, the adjusted earnings per share came out as $2.66, surpassing expectations of $1.95 per share and reflecting a rise of 71% when measured against the previous year’s figures.

Overall, ESLT ranks 10th Among the top 10 best military drone stocks to consider right now, we recognize their appeal. However, our preference leans toward AI stocks as they seem poised to offer superior returns over a shorter period. One particular AI stock has surged since the start of 2025, even as many well-known AI stocks have dropped roughly 25%. Should you be seeking an AI stock with better prospects than ESLT yet trading below five times its earnings, explore our detailed report on this topic. cheapest AI stock .

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Disclosure: No conflicts of interest. This article was initially published here. Insider Monkey .