Boeing (BA): Top Pick for Military Drones Investing Right Now

We recently released a list of the 10 Top Military Drone Stocks to Invest in Currently In this piece, we'll examine how The Boeing Company (NYSE:BA) measures up against some of the top contenders in the drone industry.

Contemporary warfare is swiftly transforming beyond just involving soldiers, tanks, and fighter jets. Drones operated through artificial intelligence swarm across the airspace, capable of precisely hitting adversary objectives. This shift in combat scenarios has merged human roles with technological advancements, necessitating a reappraisal of military capacities.

READ ALSO: 10 Nations Leading in Global Military Drone Ownership and Goldman Sachs Recommended Defense Stocks: Leading 12 picks .

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 surveillance, performing reconnaissance, and executing targeted missions. These airborne systems provide an unparalleled overhead perspective of combat areas, complicating movements and concealment efforts within the theater of war.

In the 2020 conflict over the Nagorno-Karabakh region involving Azerbaijan and Armenia, drones stood out as significant elements. Throughout various towns and cities during the ongoing Russia-Ukraine war, these unmanned aircraft have been dominating the airspace, prompting defense analysts to recognize them as a novel challenge in air defense strategies.

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 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 their fighter and bomber aircraft through the Collaborative Combat Aircraft (CCA) project. This past March saw the unveiling of the first two prototype 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 are facing more attacks from non-governmental entities in the Middle East. Additionally, officials in Washington are concerned that China might follow Russia’s example from the Ukraine conflict and carry out comparable assaults on American assets in the Asia-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 obtain 500 recoverable Roadrunner interceptors—drones designed for reuse that can either neutralize approaching drones or safely return to the ground if they do not engage their targets.

Given that, let's move on to the list of top drone stocks worth investing in.

A financier meticulously examining a varied mix of stocks and bonds on a digital tablet.

Methodology

We drew samples from ETFs that have investments linked to military drones and also referred back to our earlier pieces on this topic. Our selection encompassed both companies solely focused on manufacturing military drones and larger defense firms involved in drone projects. Next, out of these picks, we chose the top 10 stocks that attracted the most hedge fund investors, using data from Insider Monkey which tracks more than 1,000 major hedge funds up until Q4 2024.

Why do we focus on the stocks that hedge funds amass? It's straightforward: our studies indicate that mimicking the leading stock choices from premier hedge funds allows us to surpass the market performance. Each quarter, our monthly bulletin chooses 14 small-cap and large-cap stocks, delivering a return of 373.4% since May 2014, which significantly outperforms its benchmark by 218 percentage points. see more details here ).

The Boeing Company (NYSE: BA )

Number of Hedge Fund holders: 103

Boeing Corporation (NYSE: BA), a prominent player in the aerospace industry, specializes in producing commercial aircraft, space systems, and military hardware for clients spanning more than 150 nations. Additionally, they have an extensive range of unmanned vehicles designed to function both within our planet’s atmosphere and far beyond it, as well as across various terrains including aerial, maritime, and terrestrial environments.

In the previous year, The Boeing Company (NYSE: BA) handed over the initial MQ-25 Stingray to the U.S. Navy for evaluation purposes. This marks the naval branch's introduction to having their first unmanned aircraft vehicle designed specifically for use from an aircraft carrier. These drones aim to enhance the operational reach of deployed fighter planes through mid-air fueling services. Among Boeing’s notable unmanned vehicles are also the ScanEagle and the MQ-28 Ghost Bat.

On April 23, The Boeing Company (NYSE: BA) announced its financial performance for the initial quarter of fiscal year 2025. The firm posted a net deficit of $31 million, marking a substantial reduction compared to the $355 million shortfall recorded during the same period last year. Revenue climbed by 18%, reaching $19.5 billion when measured against the previous year. Additionally, the corporation managed to decrease its cash outflow to approximately $2.3 billion from around $4 billion seen in the opening quarter of 2024.

After the earnings call, multiple analysts increased their price targets for the stock. Over the last month, investor confidence in The Boeing Company (NYSE:BA) has risen as well, following its choice by the U.S. Air Force to develop and construct the new generation of fighter jets, known as the F-47, intended to succeed the F-22 Raptor.

Overall, BA ranks 1st Among the top 10 best military drone stocks to consider right now, we recognize their appeal. However, we feel strongly that AI stocks offer even better prospects for substantial gains over a shorter period. One particular AI stock has seen growth year-to-date, whereas many well-known AI stocks have dropped approximately 25%. Should you be searching for an AI stock with stronger potential than BA but trading below five times its earnings, review our detailed analysis in our latest report. cheapest AI stock .

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