The drone industry has been experiencing explosive growth in recent years, with no signs of slowing down. Industry experts predict that this trend will continue in the coming years, with a CAGR of 38.6% from 2023 to 2030, offering a potentially profitable investment opportunity for interested investors.
The adoption of drone technology has been on the rise in various industries, including the military, agriculture, real estate, delivery services, and surveillance, among others. As the drone and unmanned aerial vehicle (UAV) market continues to grow, many different companies are emerging as industry leaders and presenting a range of investment opportunities for investors.
In this article, we will take a closer look at the drone and UAV market and highlight four companies that are making a name for themselves in the sector: EPAZ, AVAV, KTOS, and AITX.
The first stock we're going to look at is Epazz, Inc. (OTC: EPAZ). Epazz is an emerging player in the drone technology space with their spinoff company, ZenaDrone. Their flagship drone, the ZenaDrone 1000, has caught the attention of various branches of the US military. ZenaDrone also recently secured a utility patent for its game-changing AI-predictive drone, the Smart Charging Pad.
EPAZ's success with the military follows on the coattails of multiple meetings and demonstrations with various branches of the military; their most recent demonstration was a full-flight demonstration of the ZendaDrone 1000 with the US Army.
Last month, Epazz announced that ZenaDrone has advanced to Technology Readiness Level 7 (TRL 7). This is a measure of technology maturity during the acquisition phase of the SBIR program, with 9 being the most mature technology.
Now that ZenaDrone has achieved TRL 7, it is eligible to submit a Phase II SBIR grant for external funding of its cargo delivery solution. Phase II SBIR grants are typically worth up to $1.2 million over a two-year period and are a non-dilutive source of funding. This is an impressive achievement for ZenaDrone, as it marks the second time the company has progressed directly to a Phase II SBIR grant.
More support came from the military when ZenaDrone received a letter of support from the US Air Force to use ZenaDrone 1000 for drone cargo delivery, which includes blood transport. The company has been invited to work with the US Air Force at an overseas base to test the ZenaDrone 1000 platform under battlefield conditions.
To keep up with rising demand, Epazz announced that it is expanding its facilities in Dubai, UAE, to increase production of the ZenaDrone 1000. The drone is in the process of qualifying for Green UAS certification, a new US government compliance program, which is a crucial step for becoming a government provider of drone technology.
Investors looking to benefit from the growing drone market should keep a close eye on Epazz and its advances as a supplier of military drones to various branches of the US military. The potential for revenue from ZenaDrone, along with the expanding commercial drone segment, makes Epazz an attractive penny stock for investors seeking big potential.
A larger and more established player in the segment is AeroVironment, Inc. (NASDAQ: AVAV). Aerovironment is a company that creates, designs, manufactures, delivers, and provides support for a range of robotic systems and related services. Their customers include businesses and government agencies around the world.
In recent weeks, AeroVironment experienced a boost in its stock price after being upgraded to a strong buy rating by investment bank Raymond James. This upgrade came as a surprise to many investors, given that just a few weeks prior, AeroVironment reported a significant earnings miss of 20% in its fiscal Q3 2023 earnings report. AVAV has been trading in a similar range since the upgrade.
Despite the earnings miss, AeroVironment is already exceeding analysts' predictions for sales growth, with an impressive 49% year-over-year increase last month. Despite this positive development, the company's profits on those sales did not meet expectations. However, investors may want to note that the management team reported that the backlog in Q3 grew by a staggering 83%. This is a clear indication of even more robust revenue growth on the horizon, with the potential for corresponding increases in earnings. Keep AVAV on your radar to see if its successes continue.
Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a drone technology company that develops and delivers innovative products and solutions to meet the needs of US national security. KTOS emphasizes affordability as a key component of its technological advancements and strives to accelerate the time-to-market by bringing actual products, systems, and technologies instead of just mere proposals. The company's stock has recorded a low of $8.90 and a high of $18.61 over the past 12 months.
Kratos Defense has a proven track record of using a combination of commercial and venture capital-based strategies, such as internally funded research and streamlined development processes, to stay ahead of the competition and be the first to introduce groundbreaking solutions to the market.
Although Kratos Defense & Security Solutions' share price has fluctuated due to market factors such as buying and selling trends, the company remains a competitive player in the national security sector. Investors still should take note of the company's innovative advances in advanced technology, such as rocket support operating systems, and recognize its stock market potential for long-term growth.
Another player on the up-and-coming side of the drone market is Artificial Intelligence Technology Solutions Inc. (OTC: AITX). AITX is a forward-thinking company that provides cutting-edge AI-driven robotic security solutions through its subsidiary, Robotic Assistance Devices, Inc., or RAD. By offering solutions-as-a-service, RAD is capable of providing cost-effective alternatives to traditional manned security models that can save businesses anywhere from 35% to 80%.
All of RAD's advanced robotic solutions, including AI-based analytics and software platforms, are developed in-house. With a sales pipeline of more than 35 Fortune 500 companies and other potential clients, RAD is poised for significant growth and recurring revenue as it converts existing sales opportunities into deployed clients.
Last week, AITX announced that it had secured a substantial order for 11 ROSA security robots and 2 AVA access control solutions, which will be deployed at a large warehouse center belonging to a Fortune 250-ranked supplier of technology-driven solutions for the global energy industry.
These robots will be responsible for detecting and deterring security breaches such as trespassing and loitering. One of the AVA units will replace a security guard at a secure entrance gate, while the remaining AVA unit will supplement the tasks of another security guard at a gated entrance to the facility. This deployment is expected to replace human labor valued at $400,000 to $600,000 annually. RAD aims to deliver the full 13-unit order to the project site by the end of April 2023 and begin invoicing for the deployment in May or June.
This order is indicative of the growing demand for AITX's innovative security solutions and the company's expanding presence in the industry, attracting new clients. With its advanced robotic technology, RAD is changing the landscape of the security and guarding services industry and offering clients a cost-effective alternative to traditional manned security models.
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