L3Harris Technologies (LHX): Top Pick for Military Drones Investment Today

We recently released a compilation of the 10 Top Military Drone Stocks to Invest in Today In this piece, we'll examine how L3Harris Technologies, Inc. (NYSE:LHX) measures up against some of the top players in the drone industry.

Contemporary combat is swiftly transforming beyond just involving troops, armored vehicles, and aircraft. Large formations of unmanned aerial vehicles (UAVs), controlled by AI, dominate the airspace and can hit adversary positions precisely. This shift in warfare has obscured the distinction between human-operated forces and automated systems, necessitating a reconsideration of what military strengths should be prioritized.

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

In recent years, the demand for drones has skyrocketed as nations increasingly employ Unmanned Aerial Vehicles (UAVs) for gathering intelligence, conducting reconnaissance missions, monitoring activities through surveillance, and executing targeted operations. These airborne systems provide an unparalleled overhead perspective of combat zones, complicating efforts for adversaries to evade detection within these areas.

Unmanned aircraft played a significant role in the clash over the Nagorno-Karabakh area involving Azerbaijan and Armenia back in 2020. These devices have also loomed above numerous towns and cities throughout the ongoing Russo-Ukrainian War, prompting analysts to recognize them as an emerging challenge in air defense strategies.

For nearly a hundred years, the U.S. has utilized unmanned aerial vehicles, starting with their deployment during World War II and continuing through recent conflicts such as those in Afghanistan and Iraq. In 2023, the Department of Defense introduced Project Replicator, aimed at producing large numbers of 'attritable autonomous systems' within the following one-and-a-half to two-year period. Additionally, the Air Force is working on drone escorts designed to accompany its fighter planes and bombers via the Collaborative Combat Aircraft (CCA) project. This past March saw the unveiling of the inaugural pair of these CCA aircraft.

Nonetheless, specialists in military defense see the increasing availability of unmanned aerial vehicles (UAVs) as a significant security risk, particularly since U.S. forces have been facing more attacks from non-government groups in the Middle East. Additionally, officials in Washington are concerned that China might take inspiration from Russia’s tactics 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 deal to Anduril Industries for developing systems to defend against drone assaults on U.S. military personnel. As part of this agreement, the country will be supplied with 500 recoverable Roadrunner interceptors—drones designed for reuse that can either neutralize approaching drones or safely return to Earth if they do not encounter their targets.

Given that, let's move on to the lineup of the top drone stocks worth purchasing.

A military jet fighter contrasting against a vivid blue sky with the sun positioned at its rear.

Methodology

We drew samples from ETFs that have investments in military drones, complemented by insights from our earlier pieces on this topic. This selection encompassed both companies exclusively focused on manufacturing military drones and larger defense firms involved in drone initiatives. Next, out of these picks, we chose the top 10 stocks according to the number of hedge fund backers they had, using data from Insider Monkey which tracks more than 1,000 leading hedge funds up until Q4 2024.

Why do we focus on the stocks that hedge funds accumulate? It's straightforward: our analysis indicates that replicating the leading stock choices from premier hedge funds allows us to exceed market performance. Each quarter, our quarterly newsletter recommends 14 small-cap and large-cap stocks through this approach and has achieved a return of 373.4% since May 2014, surpassing its benchmark by 218 percentage points. see more details here ).

L3Harris Technologies, Inc. (NYSE: LHX )

Number of Hedge Fund Owners: 48

L3Harris Technologies, Inc. (NYSE:LHX) specializes in wireless and night vision devices, command and control systems, avionics, as well as terrestrial and space-based antennas. The company is also recognized as an industry pioneer in unmanned and autonomous technologies.

Last November, the Defense Innovation Unit (DIU) chose L3Harris Technologies, Inc. (NYSE:LHX) to create a prototype for a command and control system capable of managing thousands of autonomous systems at once. This effort aligns with the Department of Defense’s Replicator program aimed at strengthening U.S. military capabilities via fleets of unmanned aerial, maritime, and land vehicles.

On February 10, L3Harris Technologies, Inc. (NYSE:LHX) unveiled AMORPHOUS, a novel software solution. This tool offers a unified user interface for managing multiple autonomous devices concurrently. Engineered with openness in mind, AMORPHOUS enables the U.S. military to oversee various platforms, payloads, and systems all at once—even those produced by different manufacturers.

L3Harris Technologies, Inc. (NYSE:LHX), which plays a crucial role in the U.S. defense industry, has seen increased interest from investors following several significant contract wins recently. Earlier this year, in January, they secured a $263 million contract from the U.S. Army for more Enhanced Night Vision Goggles—Binoculars (ENVG-B). Then, in March, L3Harris entered into a lengthy pact worth potentially up to one billion euros with the Dutch government under their FOXTROT program for providing them with Falcon IV radio equipment.

On April 24, L3Harris Technologies, Inc. (NYSE:LHX) disclosed its financial performance for the initial quarter of fiscal year 2025. The firm posted revenues totaling $5.13 billion, marking a decline of 1.5% compared to the previous year and falling short of analyst projections which were set at $5.22 billion. However, the corporation's non-GAAP diluted earnings per share came out as $2.41, representing an increase of 7% over the same period last year and surpassing forecasts by 9 cents. This makes it among the top picks when considering drone-related stock investments.

Overall, LHX ranks 6th Among the top 10 military drone stocks currently worth investing in, we recognize their potential yet lean towards believing that AI stocks offer better prospects for substantial gains over a shorter period. One particular AI stock has surged since early 2025, contrasting with many well-known AI stocks which have declined approximately 25% during the same timeframe. Should you seek an AI stock showing stronger promise compared to LHX and trading below five times its earnings value, consider reviewing our detailed analysis on this topic. cheapest AI stock .

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Disclosure: None. This article is originally published at Insider Monkey .