Whatever your view of government, it’s hard to ignore the impact federal spending can have on the broader economy. Congressional appropriations always reflect the majority’s priorities, but they also offer clear signals about which sectors are poised to benefit from Washington’s attention.
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The drone industry – unmanned aerial vehicles – is one of those areas. Drones now play a role across a wide range of fields, from defense and public safety to mapping, inspection, and delivery services. And continued innovation is only strengthening their relevance. Improvements in battery efficiency, AI-driven autonomous flight, and advanced sensor technology are steadily expanding the capabilities and real-world adoption of drones.
Globally, the drone market reached $73.06 billion in 2024, and according to Grand View Research, that figure is expected to climb to $163.6 billion by 2030, for a CAGR of 14.3% over the forecast period.
Against this backdrop, Needham analyst Austin Bohlig lays out how government demand is beginning to shape the next phase of the industry’s growth.
“Our core thesis has long been anchored by the unprecedented investment from the U.S. Department of War, driven by the One Big Beautiful Bill (OBBB), which we estimate is allocating over $10B toward offensive and defensive unmanned systems. While the timing of this funding deployment has been a key question among investors, recent actions suggest that capital is now beginning to flow,” Bohlig explained.
With that tailwind in mind, Bohlig highlights two drone stocks he believes have the potential to double, or more, over the coming year. And according to the TipRanks platform, both names have picked up Buy ratings from the rest of the Street as well. Let’s take a closer look.
Draganfly (DPRO)
The first drone company we’ll look at here, Draganfly, has over 25 years of experience in the field and produces a varied line of drones and ancillary equipment and software. The company’s drones have found use in multiple fields, including agriculture, insurance, public safety and public health, energy, and defense. Draganfly’s first commercial quadrotor UAV was launched in 1999, and in 2001 the company was the first to put multirotor UAVs with integrated camera systems on the commercial market.
Draganfly has built its drone business on a foundation of engineering skill. The company has developed its own institutional experience in fields like aviation, model building, and robotics – all vital in the drone industry – and works to combine both artisanal craftsmanship and engineering savvy in its drone lines.
Like many commercial drone companies, Draganfly is expanding its government exposure. The company has close connections with governmental organizations, particularly with law enforcement and the military, where its capabilities in providing intelligence and data infrastructure are in high demand. Draganfly is able to design custom airframes, payloads, and robotics to meet the strict demands of military-grade customers.
Last month, Draganfly provided live demonstrations of its Outrider Border Drone platform for a variety of Federal, state, and local law enforcement officials, as well as military officers, in Cochise County, Arizona. The company received feedback indicating that the demonstrations are driving increased interest in the drone platform among law enforcement and military officials in the border region.
Also in November, Draganfly scored a significant contract win, securing an international military order for its Commander 3XL drones. These drones feature a 50-minute flight time over 2 kilometers, with a 22-pound payload capacity, and are configurable for a wide range of missions. They are small, man-portable quadcopters, well suited to field surveillance. Due to regulatory restrictions, Draganfly could not publicly reveal customer specifications.
In his coverage of Draganfly, analyst Bohlig points out several factors that point toward a bright future. Laying out a bullish case for the stock, he writes, “We continue to believe the company is entering 2026 with a robust pipeline, led by the upcoming Outrider and the currently available Flex FPV platforms. Coupled with large scale defense programs in Canada and U.S., for border security as well as onsite production of drones at the base level, we believe DPRO remains on plan for a meaningful inflection in revenues in 2026. Given the size of these opportunities, coupled with the company’s planned capacity expansion to ~$400M in 2026, we see the opportunity for potential meaningful upside to estimates as these programs ramp.”
Bohlig quantifies his stance with a Buy rating and a $14 price target that suggests a robust one-year upside potential of 101%. (To watch Bohlig’s track record, click here)
The Strong Buy consensus rating here is based on 4 unanimously positive analyst reviews. Shares in DPRO are currently selling for $6.95 and the $14.50 average price target implies a 109% gain over the next 12 months. (See DPRO stock forecast)
Unusual Machines (UMAC)
Next on our list is Unusual Machines, a Florida-based drone company that has been in business since 2019, and has established itself in building and selling drone components. The company’s focus is on first-person view, FPV, drone technology, and last year Unusual Machines made two acquisitions in this field: the company acquired Fat Shark, a designer/distributor of the ultra-low-latency video goggles favored by FPV drone operators, and it picked up Rotor Riot, an online marketplace for drones, drone accessories, and FPV kits. Through these strategic acquisitions, Unusual Machines has staked out positions in both the development and manufacture of drone tech as well as in the sale and distribution of commercial FPV drones.
Unusual Machines has set out an overall strategic approach to the drone business that features several important attributes. First, the company aims to both lock in its existing customer base’s loyalty – and to expand that base – by producing high-end products. Second, the company has committed to keeping its drone business domestic – and to avoid the Chinese supply chain in tech parts. Unusual Machines also aims to leverage the existing marketing channels brought by the Fat Shark and Rotor Riot acquisitions to boost its reputation with the drone pilot community and to expand its social media presence. And finally, the company is working to establish itself as a vital strategic partner for drone manufacturers and suppliers of drone components.
In recent months, Unusual Machines has scored some important contracts, and has expanded its production capabilities. One example of the former: the company in early October announced that it received an order to supply 3,500 NDAA-compliant motors to the US Army’s 101st Airborne Division, which will install them in its deployment of Attritable Battlefield Enabler (A.B.E.) V1.01 drones.
This announcement leads directly to one of the company’s expansion efforts. At the end of October, Unusual Machines announced the opening of its motor production facility in Orlando, Florida. The new facility totals 17,000 square feet of floor space and is described as a ‘key milestone’ in Unusual Machines’ US manufacturing expansion. The new facility will manufacture the motors in the above announcement.
Unusual Machines has also announced the opening, again in Orlando, of a 25,000-square-foot warehouse and order fulfillment center. The new warehouse is located in close proximity to the new manufacturing site, and marks a strong expansion of the company’s logistics footprint and capabilities.
The key points for Needham analyst Bohlig are UMAC’s growing pipeline and the company’s potential to continue expanding its footprint in the drone industry. Following the Q3 readout, he wrote, “We were most encouraged by the company’s growing pipeline of Enterprise orders, which now exceeds $16M that will be shipped through 1H26. Given UMAC’s unique position to provide parts for high volume programs such as PBAS and Skyfoundry, we continue to view UMAC’s growth trajectory and expanding order pipeline favorably and see further potential upside to our 2026 estimates as demand for attributable drones inflects in 2026… While we expect revenues to increase 240% Y/Y to $~33M in 2026, we believe as orders continue to flow in the coming quarters we see additional upside potential to our estimates.”
Following from this, Bohlig rates Unusual Machines’ stock as a Buy, with a $20 price target that indicates a strong 122% upside potential over the next year.
This stock holds a Strong Buy consensus rating, based on a unanimous 3 recent positive analyst reviews. The shares are priced at $9, and their $18.67 average price target suggests a share appreciation of 107% on the one-year horizon. (See UMAC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.