ONDS, UMAC, KTOS, RCAT: Trump’s Drone Bet Has Retail Piling – But One Stock Stands Out With 70% Upside Potential
On Thursday, UMAC was up 57%, RCAT rose 33%, ONDS surged 23%, AeroVironment (AVAV) up 18%, Swarmer (SWRM) advanced 17% and KTOS climbed 14%. The rally added to an already strong month for the sector, with UMAC up 104% in May, ONDS gaining 25%, RCAT rising 26%, and KTOS advancing 6%.
Why Drone Stocks Soared
The Trump administration is exploring funding arrangements with drone companies to expand domestic manufacturing capacity and lower costs, The Wall Street Journal reported on Thursday. The discussions, involving the Pentagon and the Office of Strategic Capital, could reportedly include a mix of loans, debt financing and equity investments, with companies such as Performance Drone Works, Unusual Machines and Neros Technologies reportedly under consideration.
The effort aligns with the Pentagon’s $1.1 billion Drone Dominance initiative, which aims to deploy 300,000 low-cost attack drones by 2027, and also comes as conflicts in Ukraine and the Middle East underscore the growing importance of autonomous systems in modern warfare.
Wall Street’s Top Drone Pick
While UMAC gained the most on Thursday, analyst targets suggest that the biggest potential winner may be a different drone player. According to Koyfin data, KTOS offers the largest implied upside among the group with an average price target of $113.05, representing a 73% upside from current levels. The stock also carries a ‘Strong Buy’ consensus rating from 19 analysts, including 12 ‘Buy’ ratings and four ‘Hold’ ratings.
ONDS ranks second with an average target price of $20.31, implying a 53% upside from its last close. The stock carries a ‘Strong Buy’ consensus rating, supported by six ‘Buy’ ratings and two ‘Strong Buy’ ratings.