Investing in drones may sound boring.
But the numbers say otherwise.
In fact, the global drone market could be one of the more exciting growth stories of the next several years. Analysts project the market could surge from about $8.8 billion to more than $82.5 billion by 2032.
That kind of growth is already helping lift drone-related stocks like AeroVironment (AVAV), Draganfly (DPRO), and L3Harris Technologies (LHX).
And this may only be the beginning.
One of the biggest catalysts is the push to move away from Chinese-made drones.
For years, Chinese manufacturers have dominated the global drone market, with estimates putting their market share somewhere between 70% and 90%. But that dominance is now being challenged.
The U.S. defense industry, state and local law enforcement agencies, and even commercial businesses are increasingly moving to ban Chinese-made drones and drone components because of national security concerns.
That shift could create a massive opportunity for U.S.-based drone and defense companies.
Better yet, demand for drones is exploding across multiple industries.
The U.S. military is using drones for surveillance, reconnaissance, and battlefield support. Farmers are using them for crop monitoring and spraying. Logistics companies are testing drones for delivery and warehousing. Oil and gas companies are using them for inspection. Mining, construction, emergency management, and renewable energy companies are all finding new use cases as well.
In other words, drones are no longer just a niche technology.
They are quickly becoming essential tools across some of the world’s biggest industries.
While investors can always look at individual drone stocks, there are also exchange-traded funds that offer exposure to the broader theme.
iShares U.S. Aerospace & Defense ETF (ITA)
One way to play the drone boom is through the iShares U.S. Aerospace & Defense ETF (ITA).
The ETF invests in U.S. aerospace and defense companies, including businesses that manufacture commercial aircraft, military aircraft, and defense-related equipment.
Some of its top holdings also have exposure to drone and defense technology.
For example, GE Aerospace is currently the fund’s largest holding, with a weighting of about 21.04%. RTX Corp. is another major holding, with a weighting of about 14.42%.
As defense spending remains elevated and drone demand continues to grow, ITA could benefit from the broader strength in aerospace and defense.
ARK Autonomous Technology & Robotics ETF (ARKQ)
Another ETF to watch is the ARK Autonomous Technology & Robotics ETF (ARKQ).
This Cathie Wood-managed ETF focuses on companies involved in autonomous technology, robotics, artificial intelligence, energy storage, and next-generation transportation.
It also holds several drone-related names.
For example, Kratos Defense & Security makes up about 9.7% of the fund, while AeroVironment accounts for about 3.67%.
The fund has an expense ratio of 0.75% and invests at least 80% of its assets in companies tied to autonomous technology and robotics.
As drones become more important to defense, agriculture, logistics, and industrial operations, ARKQ could offer investors a diversified way to gain exposure to the trend.
The Bottom Line
Drones may not sound like the most exciting investment theme.
But sometimes the most “boring” ideas are the ones that quietly produce the biggest gains.
With the global drone market expected to grow significantly, Chinese-made drones facing restrictions, and demand rising across defense and commercial industries, drone-related stocks and ETFs could see strong upside in the years ahead.
For investors looking for exposure, names like AVAV, DPRO, and LHX are worth watching.
And for those who prefer a basket approach, ETFs like ITA and ARKQ may be two of the easiest ways to play the drone boom.
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