This is the story of the "attacking" side of unmanned weapons — the self-destructing drones that loiter over a target and then crash into it (loitering munitions) and the combat drones that work like unmanned fighter jets. These are cheap enough to make by the millions and "expendable" — losing one doesn't hurt. They're flipping the economics of the entire battlefield, and making "the most expensive thing" lose to "the cheapest thing you have the most of" — for the first time in decades.
AeroVironment Partners With Nominal to Digitize Production and Test Data
AeroVironment announced a new collaboration with software provider Nominal to overhaul production and test data management across its autonomous and counter-UAS hardware programs. The partnership focuses on digitizing real-time manufacturing and test data, with Nominal's integrated platform expected to support AeroVironment as it scales output of mission-critical systems for domestic and international customers. AeroVironment is a US defense technology provider with a US$7.8b market cap that builds robotic systems and related services for government agencies and commercial clients worldwide. The company's strategic focus on modular, interoperable, and software-defined platforms, including the newly launched AV Halo open software ecosystem, aligns with the accelerating adoption of AI-powered autonomy and network-centric warfare. The move is seen as addressing operational discipline concerns, including margin pressure after the BlueHalo deal and internal control questions, by centralizing test data from early R&D through end-of-line checks.
AeroVironment Signs Long-Term Agreement With Attalon for Valaris Laser Platform
AeroVironment has executed a long-term agreement with Attalon for delivery of Attalon's Valaris high-energy laser platform across AeroVironment's expanding portfolio of high-energy laser programs. The agreement supports AeroVironment's LOCUST and broader high-energy laser product line as demand for deployable directed energy capabilities continues to grow, with Attalon supplying the mission-ready laser subsystems needed to scale those systems from development and demonstration into sustained operational use. Mary Clum, AeroVironment's president of Space, Cyber, and Directed Energy, said the LTA lets the company proactively scale LOCUST production capabilities ahead of immediate demand, and called Attalon's Valaris S beam-combining laser subsystem central to that effort. To support the agreement and AeroVironment's growing high-energy laser product line, Attalon is investing $15 million to expand production capacity, grow its skilled workforce, and add capital equipment. Attalon Chief Executive Officer John Bergeron said directed energy has reached the moment when delivering capability at production scale, and sustaining it through its service life, becomes the defining challenge.
Swarmer's Ratel Robotics Deal Could Drive $200M in 2027 Revenue
Swarmer, Inc. could reach $200 million in pro forma revenue and $20 million in adjusted EBITDA in 2027 through its pending acquisition of Ukrainian unmanned-ground-vehicle maker Ratel Robotics, according to a research note from Lucid Capital Markets. Swarmer, whose non-executive chairman is Blackwater founder Erik Prince, has a definitive agreement to buy Ratel for up to $224 million, and the note cites $86 million in secured contracts and roughly 37% of Ukrainian government UGV procurement spending. The company will pay about $7.2 million in cash and 1.1 million shares at closing, with most of the remainder tied to Ratel meeting earnout targets. Swarmer held roughly $25 million in cash at the end of the second quarter and raised another $18 million through its equity line as of Aug. 17, giving it about $43 million in pro forma cash. Lucid set a $60 price target based on 24 times EV/sales of an estimated $40 million in 2028 revenue excluding the Ratel deal, while on a pro forma basis, assuming Ratel hits its earnouts, Swarmer could trade at around 4 times 2027 EV/sales and 35 times 2027 EV/EBITDA, compared with an average of 5.5 times 2027 EV/sales for peers including Ondas Holdings, Red Cat Holdings, Unusual Machines and Draganfly.
AeroVironment Shares Jump 5.7% on Nominal Data Platform Deal
AeroVironment shares jumped 5.7% in the afternoon session after Nominal announced a strategic collaboration with the aerospace and defense company to supply test and operations data platform infrastructure supporting defense hardware production across multiple programs. Under the agreement, AeroVironment adopted Nominal's data platform to unify and manage engineering test capture, cross-team reviews, and manufacturing traceability across its uncrewed aircraft and counter-UAS operations. The collaboration is designed to power accelerated test and production data for mission-critical hardware at scale across the company's various development programs. The move comes four days after the stock gained 10.4% on record second-quarter revenue of $480.5 million, up 5.7% year-over-year and above analyst estimates of $457.6 million, alongside a record funded backlog of $1.5 billion, up 37% from a year earlier. AeroVironment is down 39.6% since the start of the year and trades at $154.84 per share, 62.2% below its 52-week high of $409.83 from October 2025.
Saudi Crown Prince Discusses CENTCOM Commander Amid Houthi Tightening Grip on Bab el-Mandeb Strait
Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud discussed the latest regional situation and bilateral relations between Saudi Arabia and the United States during a meeting with Admiral Brad Cooper, commander of United States Central Command, or CENTCOM, in Jeddah today. The meeting took place amid intense clashes between the Houthi group in Yemen and Saudi Arabia. Reuters reported that Crown Prince Mohammed bin Salman asked President Donald Trump for military assistance to strike the Houthis in Yemen, but President Trump declined to approve direct U.S. military strikes on the Houthis. Meanwhile, the Houthis disclosed today that they fired long-range missiles and sent dozens of drones to attack an air base in southwestern Saudi Arabia. In addition, last Thursday the Houthis seized the strategic port city of Mokha, then pushed south into the Bab el-Mandeb Strait on Friday and captured Mayun Island, located in the middle of the strait, enabling the Houthis to tighten their control over the Bab el-Mandeb Strait, which is vital to shipping and connects the Red Sea to the Gulf of Aden.
Terra Drone to Localize Flight Controllers for Defense Drones
Terra Drone announced on the 14th that it has developed its own flight controller for defense drones and will localize production. Following batteries, the company aims to build a system for producing the core component that serves as the drone's "brain" in Japan, moving away from overseas dependence. The controller is being developed on the premise of being installed in 300 units of a general-purpose defense drone that the company won an order for from the Acquisition, Technology & Logistics Agency in May for approximately 115 million yen and is scheduled to deliver by the end of September this year, and it is also planned to be installed in 1,767 units scheduled for delivery in March next year. According to the Ministry of Economy, Trade and Industry, about 90% of Japan's industrial drone market is made up of overseas products, with components also dependent on China, Taiwan and elsewhere, and for defense use, from the standpoints of geopolitical risk, export controls and cybersecurity, a system capable of managing and mass-producing airframes and key components domestically is essential. The company's consolidated final profit and loss for the February-July 2026 period, announced the same day, showed a loss of 680 million yen, compared with a loss of 394 million yen in the same period a year earlier, as selling, general and administrative expenses swelled due to the expansion of its defense business structure, subsidy income also decreased, and an extraordinary loss was recorded. It left unchanged its forecast of a final loss of about 1.2 billion yen for the fiscal year ending January 2027, and sales from the defense business are not factored into its full-year consolidated earnings forecast for the fiscal year ending January 2027. President Toru Tokushige said at a briefing that sales from the defense business will be "recognized from the third quarter, the August-October period, and accordingly, full-year consolidated earnings are expected to exceed the initial forecast." The company also announced the same day that it will invest through a European group company to make a Ukrainian company that handles interceptor drones a consolidated subsidiary, aiming to expand its defense business by incorporating a product lineup that intercepts the Ukrainian company's small unmanned aircraft. It also announced that it will consider commercializing a high-speed interceptor drone in anticipation of dealing with the jet-engine-equipped attack drone Shahed, and it is also considering establishing a joint venture with a Czech company that develops defense drone systems.
North Korea Conducts Missile and Attack Drone Drills After US-Japan-South Korea Wrap Up Freedom Edge Exercises
North Korea revealed on September 14 that it had held drills involving ballistic missiles, cruise missiles, and attack drones, just one day after Japan, South Korea, and the United States completed their military exercises. Earlier, South Korea's Joint Chiefs of Staff disclosed on Saturday, September 12, that South Korea had detected the launch of multiple missiles from the Wonsan area on North Korea's east coast toward the Sea of Japan, with the missiles traveling about 250 kilometers. The Korean Central News Agency reported that Kim Jong Un, North Korea's leader, did not attend this live-fire drill, which was commanded by Pak Jong Chon, vice chairman of the Central Military Commission of North Korea's ruling party, and Yu Chang Son, head of the North Korean military's artillery bureau. Kyodo News reported that this drill, which included the use of large multiple rocket launchers, aimed to familiarize the military with the operating procedures of an integrated personnel control system and to enhance the strategic counter-response readiness of attack units at all levels. Meanwhile, Rodong Sinmun, North Korea's official newspaper, did not report on the drill last Saturday and has not published any article about the country's missile launches since August, in contrast to the traditional practice of state media, which usually announces missile launch news the following morning. Japan, South Korea, and the United States completed the five-day Freedom Edge exercise on Friday, September 11, which focused on real-time information sharing and the integration of air, maritime, missile defense, cyber, and medical capabilities.
US imposes tariffs of up to 100% on drone imports, Thailand's exports at risk
The United States has announced additional import tariffs on unmanned aircraft systems and components under Section 232 of the Trade Expansion Act of 1962, with US President Donald Trump issuing a formal proclamation on August 13, 2026, citing national security grounds. Mrs. Arada Fuengthong, Director-General of the Department of Foreign Trade under the Ministry of Commerce, disclosed that the additional tariff rates are divided as follows: goods in Annex I are subject to a 100% tariff, covering unmanned aircraft with a maximum takeoff weight exceeding 25 kilograms, unmanned aircraft equipped with thermal imaging cameras, unmanned aircraft operating bases, and certain key components, effective from September 3, 2026. Goods in Annex II are subject to a 25% tariff, covering unmanned aircraft with a maximum takeoff weight not exceeding 25 kilograms, also effective from September 3, 2026. Goods in Annex III are subject to a 25% tariff on certain components, taking effect from February 9, 2027, or 180 days after the announcement, in order to allow opportunities to relocate or expand production in the United States. Annex IV is a reference document comparing the normal customs classifications of the controlled goods in Annexes I through III with the customs classifications in Chapter 99 of the Harmonized Tariff Schedule of the United States, which operators must verify before exporting. In addition, the United States has set a maximum total tariff rate of 15% for goods from the European Union, Japan, South Korea, Taiwan, Switzerland, and Liechtenstein, and no more than 10% for the United Kingdom, if the specified conditions are met. Thailand is not among the countries granted these special tariff rates. Arada added that Thai export statistics for unmanned aircraft and components reflect that the United States is a key export market. Between 2023 and 2025, Thailand exported unmanned aircraft under tariff heading 8806 to the United States worth 0.78 million dollars in 2023, rising to 3.28 million dollars in 2024 and 8.64 million dollars in 2025, an average annual growth rate of 232.82%. Meanwhile, exports of components under tariff heading 8807 to the United States were worth 75.78 million dollars in 2023, rising to 75.84 million dollars in 2024 and 86.55 million dollars in 2025, reflecting that the measure could significantly affect Thai operators. The Department of Foreign Trade therefore urges Thai operators exporting products related to UAS systems, including unmanned aircraft components, to thoroughly check the lists of goods in Annexes I through IV in order to plan to mitigate the impact of the measure, particularly in terms of cost management and pricing.
Draganfly wins five-year Canadian military drone contract
Draganfly has been awarded a five-year contract by the Canadian government to supply uncrewed aircraft systems and training to the Canadian armed forces. The company will provide 100 low-cost tactical intelligence, surveillance, and reconnaissance uncrewed aircraft systems, along with associated ground control stations, payloads, data links, support equipment, documentation, spare parts, and training. Under the terms of the contract, the Canadian government holds an option to order another 4,900 UAS systems for a contractual value of CAD24.25M, or $17.5M, which would bring the total number of UAS systems from Draganfly to 5,000. Shares are about 6% higher ahead of Friday's open, positioning Draganfly to trade in the green for the first time this week.
Ukraine says Russia risks total manpower exhaustion by 2028 after casualties outpace new recruitment
Lieutenant General Oleh Ivashchenko, head of the intelligence directorate at Ukraine's Ministry of Defence, assesses that the Russian military's manpower and military resources could face complete exhaustion by 2028, as troop morale has fallen sharply and battlefield casualties outpace new recruitment. Ivashchenko told The Times that Russia still has military and economic resources for next year, but that Russia's resources are expected to stretch only another 16 months. Russia recruits roughly 1,000 new personnel per day, sometimes as many as 1,200, but yesterday casualties reached 1,410, and the day before stood at 1,511, of which about 60 percent were killed in action. Meanwhile, a Russian drone struck a shopping mall in the city of Pavlohrad in southeastern Ukraine, killing at least 5 people and injuring 67 others. Officials said shops and vehicles were damaged in the attack, which took place in broad daylight at a time when many people were on the streets, and among the injured were children aged 13, 14 and 15.
AeroVironment Q2 Revenue Beats Estimates on Record Defense Contract Wins
AeroVironment reported second-quarter CY2026 revenue of $480.5 million, up 5.7% year on year and ahead of analyst estimates of $457.6 million, while adjusted earnings per share of $0.59 far exceeded the $0.25 consensus. The company reconfirmed full-year revenue guidance of $2.18 billion at the midpoint, which came in 0.7% below analysts' estimates, and reiterated full-year adjusted EPS guidance of $3.18 at the midpoint, though its EBITDA guidance of $315 million at the midpoint fell short of the $318.2 million analysts expected. Management pointed to major U.S. Army awards, including a $465 million Enduring High-Energy Laser program for its LOCUST directed energy platform, a $117 million Long-Range Reconnaissance contract for its P550 unmanned system, and a $51 million award for Switchblade 600 loitering munitions, alongside international orders such as a Puma procurement for Germany's LARUS program and the first direct commercial sale of the LOCUST laser weapon system to an international ally. AeroVironment ended the quarter with a record $1.5 billion funded backlog, up 37% year on year, providing 86% revenue visibility to the midpoint of full-year guidance, and is expanding capacity through a $100 million innovation center in Southern California, added production space in Salt Lake City, and new or expanded operations in Albuquerque and Huntsville. Chief Financial Officer Sean Woodward cautioned that the pace of government budget approvals remains a potential risk factor even as visibility stays high.
AeroVironment Shares Jump 10.4% on Record Q2 Revenue and Backlog
AeroVironment reported record second-quarter revenue of $480.5 million, up 5.7% year-over-year and beating analyst estimates of $457.6 million by 5%, sending shares up 10.4% in the afternoon session. The $7.10 billion defense contractor posted adjusted EBITDA of $53.4 million, an 11.1% margin that crushed estimates by nearly 37%, while GAAP operating margins improved to -2.3% from -15.2% a year ago. Adjusted earnings came in at $0.59 per share, massively outperforming the $0.25 consensus, and free cash flow improved to negative $35.95 million from negative $146.5 million in the prior-year period. Bookings of $0.7 billion produced a book-to-bill ratio of 1.4 and expanded funded backlog to a record $1.5 billion, a 37% increase from a year earlier. Management reiterated full-year guidance for revenue of $2.18 billion and adjusted EPS of $3.18 at the respective midpoints, though the full-year EBITDA guidance midpoint of $315 million landed slightly below the $318.2 million consensus.
AeroVironment Jumps 5% on First International LOCUST Laser Order
AeroVironment shares rose 5% to $147.90 in early Thursday trading after the company announced its first international commercial order for the LOCUST directed-energy counter-UAS laser weapon system, a $50 million deal covering an initial delivery of systems and associated support. The order follows AeroVironment's selection for the U.S. Army's $464.8 million Enduring High Energy Laser production contract, which the company describes as the first production award for high-energy laser weapon systems in U.S. history. The company also reported fiscal Q1 2027 adjusted EPS of $0.59, beating the $0.2479 consensus, on revenue of $480.49 million that grew 5.7% year over year, with the Autonomous Systems segment contributing $346 million, up 21%. Funded backlog reached a record $1.5 billion and management reaffirmed fiscal 2027 revenue guidance of $2.125 billion to $2.225 billion. CEO Wahid Nawabi said LOCUST gives customers an affordable, scalable way to defeat drone threats without relying solely on expensive interceptors, and the company says engagements cost less than $10 per shot; management framed LOCUST as a potential half-a-billion-dollar-plus annual franchise over time. The move was company-specific, with the Defiance Drone and Modern Warfare ETF down 1% and the SPDR S&P 500 ETF Trust off 0.46%, while Ondas slipped 1% to $7.21 and Unusual Machines held steady at $24.34; AeroVironment stock remains down 39% year to date.
AeroVironment Jumps 6% on Record FQ1 Revenue, Cooper Companies Sinks 16%
AeroVironment shares jumped 6% after the defense contractor reported record FQ1 revenue of $480.5M, up 6% year over year and $24.5M above consensus, while adjusted EPS of $0.59 more than doubled the $0.25 estimate. Autonomous Systems revenue climbed 21% to $346M, led by a 71% increase in uncrewed aircraft systems sales to $120M, while Space, Cyber, and Directed Energy revenue fell 21% to $134.5M. Gross margin expanded to 26% from 21%, though adjusted EBITDA declined to $53.4M from $56.6M, and the company maintained its FY2027 revenue outlook of $2.125B-$2.225B and adjusted EPS guidance of $3.02-$3.34, both midpoints below consensus. The Cooper Companies tumbled 16% after its board decided to retain CooperSurgical following a strategic review, citing a valuation disconnect, and cut its FY2026 revenue guidance to $4.229B-$4.252B from $4.285B-$4.321B, below the $4.31B consensus, while lowering non-GAAP EPS guidance to $4.51-$4.55 from $4.58-$4.66 and raising its share repurchase authorization to $3B from $2B. American Eagle Outfitters plunged 11% despite beating Q2 expectations, with sales rising 9.4% year over year and profit up 34% to $0.79 per share, a result that included nearly $200M in tariff refunds, while the namesake brand's comparable sales declined 1%, partly offset by a 19% increase at Aerie and OFFLINE. The retailer expects Q3 operating income of $110M-$115M with mid-to-high-single-digit comparable sales growth, and raised its FY2026 operating income guidance to $540M-$550M from $390M-$410M.
Teledyne Energetics UK wins $15.4M drone energetics contract in Europe
Teledyne Energetics UK, a subsidiary of Teledyne Technologies Incorporated, has secured a $15.4M contract with a European defence technology manufacturer to supply specialist energetics products for advanced unmanned systems. The agreement establishes a long-term supply framework with potential total value exceeding $50M as production requirements scale. Teledyne will deliver advanced initiation and energetic solutions designed for compact, high-reliability applications in next-generation European drone platforms. The award reinforces Teledyne's role as a key technology partner in expanding sovereign European defense manufacturing capabilities and supply-chain resilience for unmanned systems. Deliveries under the agreement will begin immediately to support ongoing development activity, with expectations of expanded volume as production increases.
Proposed Drone Restrictions Could Boost U.S. Manufacturers, Piper Sandler Says
A potential federal ban on the sale of certain previously approved foreign-made drones could accelerate the growth of the U.S. drone industry, according to a Piper Sandler research report published Wednesday. The Federal Communications Commission is considering restrictions that would prohibit the importation and sale of foreign uncrewed aircraft systems and critical components placed on its Covered List, with public comments due September 2. Unlike earlier measures focused on preventing new equipment certifications, the proposal could also affect products that have already received approval and are currently available for sale, including drones with thermal-imaging or LiDAR capabilities, aircraft equipped to dispense aerosols, drone docking stations, and drones weighing more than 55 pounds. If adopted, the restrictions could significantly shorten the timetable for reducing U.S. reliance on Chinese drone technology, creating opportunities for domestic manufacturers of drones, optical systems, components, and supporting technology. The report also highlighted a second catalyst: new investments from the Office of Strategic Capital under the federal Drone Dominance Program, which in July made a conditional $820 million loan commitment to an unnamed private drone supplier to establish high-volume U.S. production of propulsion, power, control systems, vision technology, and other components. Piper Sandler named AeroVironment, Unusual Machines, and LightPath Technologies as its preferred publicly traded companies in the drone and drone-supply-chain market, maintaining Overweight ratings with price targets of $235, $38, and $15, respectively.
Zelensky Warns Airlines to Avoid Russian Airspace as Ukraine Expands Drone Attacks
Ukrainian President Volodymyr Zelensky has called on airlines to avoid Russian airspace, warning that the risks to aviation have increased following Ukraine's expansion of long-range drone operations into Russian territory. In his daily address, Zelensky said Ukraine wants to warn all airlines still using Russian airspace, as well as insurance companies, that safety in that airspace has significantly declined. While most Western airlines have avoided Russian airspace since 2022, carriers from China and the Gulf, including Qatar and the United Arab Emirates, continue to use these routes, which shorten flight times between Asia and Europe. In response, President Vladimir Putin dismissed the threat as state terrorism and vowed to intensify attacks on Ukraine while ruling out negotiations, saying, "You don't negotiate with terrorists." Tensions are rising as Ukraine expands its drone strikes and Russia plans a major assault on Ukraine's energy infrastructure, extending the risks of war to airspace and civilian activities.
AeroVironment Forms AV Eagle Joint Venture in Greece
AeroVironment has formed AV Eagle, a new joint venture in Greece with Athens-based Eyeonix SA, to expand its presence in Europe. The venture marks AeroVironment's first major industrial footprint in Europe, focused on local production of unmanned systems and loitering munitions. AV Eagle plans to work with the Hellenic Center for Defence Innovation to pursue defense and civil protection contracts across European markets. The company, with a market cap of about $7.7 billion, aims to convert this setup into concrete European contracts, targeting operational status in fiscal 2027 and production by 2028.
Kratos and GE Aerospace Secure U.S. Air Force Contract for Missile Engine
Kratos Defense & Security Solutions and GE Aerospace announced that their jointly developed GEK800 engine received the U.S. Military Engine Type Designation F143-ZZ-100 and secured a U.S. Air Force Engineering, Manufacturing, and Development contract for the Joint Air-to-Surface Standoff Missile. The low-cost, high-performance turbofan is designed for cruise missiles and uncrewed aerial vehicles, marking a milestone in aligning defense primes with specialized tech disruptors. In Q2 2026, GE Aerospace reported $13.3 billion in GAAP revenue, up 21% year-over-year, and adjusted EPS of $2.02, up 22%, while Kratos reported revenue of $458.8 million, a 30.5% total increase and 19.1% organic growth, with adjusted EPS of $0.21. Kratos also raised its full-year organic revenue growth guidance to 18%–23%, backed by a $2.08 billion backlog, while GE raised its full-year guidance and generated $3.0 billion in quarterly free cash flow. Kratos faces execution pressures with negative free cash flow of $18.9 million in Q2, while GE's bear case includes supply chain bottlenecks and cyclical risks. Hedge fund data shows 45 funds holding Kratos and 113 holding GE in Q2, with Cathie Wood's Ark Investment Management increasing its Kratos stake by 34% to 4.67 million shares.
AeroVironment wins $51M U.S. Army Switchblade 600 order
AeroVironment has received a $51 million U.S. Army delivery order for additional Switchblade 600 Block 2 loitering munition systems, along with Block 1 systems for a Foreign Military Sale to a key U.S. ally. The award falls under the Army's existing five-year, $990 million IDIQ contract for Lethal Unmanned Systems, issued in August 2024. This follow-on procurement signals continued Army demand for AeroVironment's next-generation Switchblade systems.
Terra Drone Passes Defense Equipment Agency's Interceptor Drone Demonstration Test
Terra Drone announced that its domestically produced interceptor drone, the Terra B1, has passed the demonstration test in the Defense Equipment Agency's 'Interceptor Drone Early Acquisition Program.' Additionally, CSSHD is investing in TechMagic, which specializes in cooking robots and business automation solutions. Osaka Titanium plans to raise up to 22 billion yen through the issuance of 7 million new shares and the sale of 1.05 million shares, raising concerns about supply-demand deterioration. Toyo Asano has revised down its consolidated earnings forecast for the fiscal year ending February 2027. Tokio Marine announced a stock split of 1 share into 15 shares and the introduction of a shareholder benefit program. JT received dividends from its consolidated subsidiaries, Morinaga Milk changed its shareholder benefit program and record date, and Sasadoku Printing newly introduced a shareholder benefit program. Seirogan (Daiko Pharmaceutical) applied for a market change to the Tokyo Stock Exchange Standard Market, and Intage Holdings announced the establishment of a share buyback framework and a change of its corporate name.
First Breach Completes First Drone Prototype Flight, Targets Q2 2027 Production Scale-Up
First Breach has completed the first flight of its proprietary drone prototype and is targeting the second quarter of 2027 to begin scaling production, with planned capacity of more than 2,500 drones per week as it expands beyond ammunition into unmanned aerial systems. The company expects to complete its initial prototypes in the fourth quarter of 2026 before beginning to scale production in Q2 2027. A strategic agreement with Hellbender provides engineering, design, technical support and component manufacturing, while First Breach retains ownership of the drone platforms and intellectual property. More than 200,000 square feet of contiguous space at the company's Maryland facility is designed to support drone manufacturing, robotic assembly, automated logistics and additional ammunition production.
US-China high-tech rivalry intensifies ahead of summit
As the United States and China vie for dominance in high-tech, their exchanges are growing sharper ahead of a summit scheduled for September 24. In late July, the US Federal Communications Commission banned imports of foreign-made humanoid robots, citing information-leak risks, with Chinese players such as Unitree Robotics in mind. China's Ministry of Commerce countered by tightening export controls on drones bound for the US, and in August the US administration imposed tariffs of 15 percent on polysilicon products, a key raw material for solar power and semiconductors, and up to 100 percent on drones. A former senior US trade representative official noted that both sides are probing how far they can go without crossing a line that would jeopardize the summit. At the May summit, the two sides agreed to establish a trade committee and are expected to cut tariffs by 30 billion dollars each on items that pose no national security threat.
Trump's New Drone Tariffs Give AeroVironment, Kratos and Red Cat a Policy Tailwind
President Trump signed a proclamation on August 13 imposing sweeping new tariffs on foreign drone imports, giving American manufacturers AeroVironment, Kratos Defense & Security Solutions, and Red Cat Holdings a structural policy advantage. The order, issued under Section 232 of the Trade Expansion Act, sets a 100% ad valorem tariff on heavy industrial and military-grade drones weighing more than 25 kilograms or equipped with thermal imaging, as well as docking stations and other crucial hardware, while smaller commercial and recreational drones face a 25% tariff. Core tariffs take effect September 3, with certain non-sensitive component tariffs delayed until February 2027, and the Commerce Department is directed to establish an onshoring program allowing duty-free component imports for companies committing to new US manufacturing before January 2029. AeroVironment is seen as the biggest direct beneficiary given its position in small tactical drones and loitering munitions for the US military, while Kratos gains support for its high-volume attritable drone push under the Pentagon's $1.1 billion Drone Dominance program targeting 300,000 low-cost attack drones by end-2027, and Red Cat benefits from reduced reliance on Chinese components, especially from DJI, which is fighting a December 2025 FCC ban in federal court. Hedge fund ownership declined for AeroVironment from 40 to 37 funds in the first quarter, while Kratos rose from 41 to 46 funds and Red Cat from 16 to 23 funds, reflecting varied institutional sentiment. The bear case notes scheduling risk with core tariffs not effective until September 3 and some component charges deferred to 2027, plus allied nations facing reduced rates of 10-15% instead of 100%, which may limit the domestic demand boost.
Kratos Defense Scales Production as Backlog Reaches $2.08 Billion
Kratos Defense & Security Solutions is entering a scale-up phase as rising defense demand translates into higher production volumes. Consolidated backlog increased to $2.08 billion, while bookings reached $492.2 million in the second quarter, and over the last 12 months bookings totaled $1.99 billion for a 1.3x book-to-bill ratio. The company plans to ramp production to 3,000 small jet engines in 2027 and approximately 40 Valkyrie aircraft annually beginning in 2028, while expanding facilities for hypersonics, advanced manufacturing, microwave electronics, engines, space and unmanned systems. Kratos forecasts $125-$135 million of 2026 capital expenditures and $250-$275 million of total investments, which pressures near-term cash generation but is expected to create operating leverage as fixed infrastructure is utilized more efficiently. The main risk is execution, including supply-chain constraints, parts shortages, hiring and production ramps, but second-quarter results indicate the company is transitioning from a defense technology developer into a scaled production platform.
Northrop Grumman and Kratos Win Marine Corps Autonomous Aircraft Contract
Northrop Grumman and Kratos have been awarded the MUX TACAIR CCA contract to deliver Missionized Valkyrie Air Vehicles for the U.S. Marine Corps. The program focuses on MVAV platforms equipped with proprietary mission kits and open autonomy software for next generation tactical aviation. The award expands Northrop Grumman's role in autonomous and collaborative uncrewed systems for U.S. defense customers. The companies target completion of the first prototype MUX TACAIR Valkyrie Air Vehicle for summer 2026.
AVIC UAS 2026 interim net profit reaches 54.93 million yuan, up 72.87% year on year
AVIC UAS released its 2026 interim report, with net profit attributable to the parent company of 54.93 million yuan, up 72.87% from the same period last year. Total operating revenue was 1.634 billion yuan, an increase of 1.195 billion yuan from a year earlier, up 272.48% year on year, marking a second consecutive year of growth. Net cash inflow from operating activities was 548 million yuan, an increase of 1.471 billion yuan from the same period last year. The company's latest asset-liability ratio was 33.95%, down 4.40 percentage points from the previous quarter; the latest gross margin was 10.74%, down 15.80 percentage points from a year earlier. Diluted earnings per share were 0.08 yuan, up 60.00% year on year.
Pentagon procurement surge to benefit major defense contractors
The Pentagon is pushing defense contractors to rapidly scale production of missile interceptors, munitions, and drones following significant inventory depletion, creating a broad procurement surge across the U.S. defense industrial base. Deputy Defense Secretary Steve Feinberg gave industry leaders 21 days to submit proposals for faster deliveries, while President Donald Trump has pressed contractors to direct more capital toward production capacity rather than buybacks and dividends. Within the roughly $1.5 trillion defense budget request, autonomous vehicles and drone defense at $122 billion and missiles and missile defense at $123.7 billion represent the two largest growth areas. Lockheed Martin and Northrop Grumman are the dominant large contractors with direct interceptor and drone program exposure, while Kratos Defense & Security Solutions and AeroVironment offer more focused drone and counter-drone exposure. Lockheed Martin posted $65 billion in new orders in its most recent quarter, pushing its backlog to a record $230.4 billion, and Boeing and RTX reached framework agreements with the Pentagon to boost production of SM-3 Block IIA and Block IB interceptor components.
Rakuten to partner with German drone startup Helsing to support delivery to Japan's Ministry of Defense
It was learned on the 17th that Rakuten Group will partner with Helsing, a German startup developing military attack drones. Rakuten will serve as Helsing's point of contact in the Japanese market and support delivery of the company's HX-2 drone to the Ministry of Defense. Helsing's drones are remotely operated from land to stop submarines and other threats approaching the coast, and the Ministry of Defense will conduct demonstration tests through the end of September to consider whether to introduce them in the Ground Self-Defense Force. The use and procurement scale are undecided, but depending on the test results, domestic mass production could also be considered. Helsing is based in Munich in southern Germany and has delivered several thousand HX-2 drones to Ukraine, but it has little track record in Japan, so Rakuten, which has connections with the Ministry of Defense, has effectively become an intermediary. Rakuten already operates a drone business, but it has focused mainly on building exterior wall surveys and inspections and has not handled defense use.
Piper Sandler Initiates Unusual Machines at Overweight With $38 Target
Piper Sandler initiated coverage of drone-maker Unusual Machines with an Overweight rating and a $38 price target, implying 39.5% upside. The analysts see the company benefiting from FCC restrictions on Chinese-made drones and a U.S. government push for domestic manufacturing, noting that more than half of the 11 winners in the first phase of the Pentagon's Drone Dominance competition are already Unusual Machines customers. Unusual Machines landed a $2.1 million purchase order for domestically assembled drone systems for defense use this year, and Piper Sandler believes the largest tailwind may come from the commercial market. The firm also flagged execution risks as Unusual Machines plans to expand motor capacity from about 15,000 units a month to more than 100,000 through an automated production line in Orlando. Unusual Machines reported second-quarter revenue of $16.72 million, up almost eightfold year over year, with a loss per share of $0.16 compared with $0.32 a year earlier.
Taiwan's parliament approves 2026 budget after record delay
Taiwan's parliament has approved the 2026 budget after a record delay, cutting the originally proposed budget by 48 billion Taiwan dollars, but retaining 63.4 billion Taiwan dollars for a drone development program to strengthen national defense capabilities amid pressure from China. The budget, which should have been approved by the end of last year, was delayed by conflict between the Democratic Progressive Party government and the opposition, which holds a majority in parliament. The opposition said it approved 98.4 percent of the general budget to allow the country to move forward normally, while the cabinet is preparing to submit the 2027 budget proposal on August 20, increasing defense spending by 16 percent from the previous year.
Trump's 100% Drone Tariff Sends Unusual Machines Up 22%
President Trump's proclamation imposing tariffs on imported drones and unmanned aircraft parts sent shares of Unusual Machines soaring 22% to $33.24 midday Friday, while Red Cat Holdings climbed 8% to $11.02 and Ondas Holdings rose 4% to $9.27. The tariffs, which include a 100% duty on larger drones and certain key parts and a 25% duty on smaller drones and additional components, take effect 21 days after the proclamation, with duties on less-sensitive components delayed 180 days. AeroVironment and Kratos Defense & Security Solutions gained just 1% and 2% respectively, as established Pentagon contractors face less import competition and benefit less from the tariffs. Unusual Machines had already surged 114% year to date before Friday's spike, raising the valuation bar for investors chasing the tariff-driven rally.
Unusual Machines stock surged 26% after President Trump announced new tariffs of up to 100% on imported drones and drone parts. The tariffs aim to boost U.S. drone production and national security, with imports from China facing significantly higher levies than those from allied nations. Friendly nations such as Japan, Liechtenstein, South Korea, Switzerland, Taiwan, and EU countries will be tariffed at 15%, while the U.K. will face a 10% rate. Drones with thermal imaging equipment will be subject to 100% tariffs, with implementation beginning in three weeks and full effect in six months. Unusual Machines, which makes drone parts in the USA, is expected to benefit as U.S. drone companies seek non-Chinese suppliers.
Trump imposes drone tariffs, Goldman weighs Nvidia AI financing
President Trump announced tariffs on imported drones and components, with most measures taking effect in 21 days, including a 100% tariff on certain larger or national-security-sensitive drones and a 25% levy on smaller models. Goldman Sachs is discussing participation with potential investors in Nvidia's planned $500 billion AI infrastructure financing initiative, with U.S. insurers, asset managers, and banks expected to provide much of the capital. Apple has trained a large language model specifically for the China market with support from Alibaba, reflecting constraints on deploying generative AI in China. Google launched Gemini 3.7 Flash, a new AI model designed to improve coding and knowledge work, at half the original 3.6 Flash price per million tokens. U.S. Central Command announced Task Force Falcon Strike, its first multinational attack-drone task force, combining U.S. personnel with regional partners in the Middle East.
AIRO Group Holdings reported second-quarter revenue of $43.2 million, up 76% year over year, driven by outperformance in its unmanned aircraft systems segment. Gross margin improved to 64% from 61% a year earlier, and the company swung to operating income of $1.7 million from a loss of $19.7 million. Drone backlog rose 9% sequentially to $163 million, and management reiterated full-year revenue growth guidance of 15% to 25%. The company also announced Blue UAS certification for its RQ-35 drone and unveiled the RQ-70 long-range ISR platform, with production expected to begin in January 2027.
Red Cat Holdings Reports 520% Revenue Growth in Q2 2026
Red Cat Holdings reported second quarter 2026 revenue of $20.2 million, a 520% increase from the prior year period, driven by increased deliveries across its drone portfolio. Gross margin improved to 16.1% from 12.7% in the first quarter, reflecting higher production volumes and better absorption of manufacturing overhead. The company held $325.6 million in cash as of June 30, 2026, up from $167.9 million at year-end 2025, and reaffirmed its annual revenue target of $150 million to $180 million. Management noted that Army revenue concentration fell to 50% of total revenue in the first half from 73% in fiscal 2025, with an ally in Japan and the NATO Support and Procurement Agency becoming the second and third largest customers respectively. The company also highlighted $50 million to $80 million in drones available for immediate shipment and expects gross margin to reach 30% by the end of 2026.
US administration to impose tariffs of up to 100% on imported drones from September 3
The Trump administration announced on the 13th that it will impose tariffs of up to 100 percent on imported drones and related components. The measures will take effect on September 3, aiming to encourage expansion of domestic production, reduce import dependence on China and other countries, and address national security risks. Drones weighing more than 25 kilograms will face a tariff rate of 100 percent because they are more likely to be used for military purposes, and those equipped with infrared imaging devices will also be covered. Products for delivery, agriculture, and the Department of Defense will be exempt. The tariff rate for products weighing 25 kilograms or less without infrared imaging devices will be 25 percent, and a measure will also be introduced to reduce the tariff to zero based on annual production volume if plans for factory construction or renovation in the United States are approved. The Chinese government this month tightened export controls on drones to the United States in response to US trade measures and announced stricter export screening for dual-use items, intensifying the back-and-forth between the two countries ahead of a planned US-China summit in September.
Duke Robotics Reports Q2 2026 Results and Business Update
Duke Robotics reported second quarter 2026 financial results and provided a business update, including the commencement of an expanded 2026 Israel Electric Corporation IC Drone grid-maintenance season expected to generate over $1 million in revenue during 2026. The company also received a new Bird of Prey order through Elbit Systems with deliveries expected during 2026, completed an underwritten public offering generating approximately $9.2 million in gross proceeds, and uplisted to the Nasdaq Capital Market. Yiftach Kleinman was appointed incoming Chief Executive Officer to lead expansion of defense business and commercial platforms. Revenues were $149,000 for the three months ended June 30, 2026, compared to $143,000 for the same period in 2025, while net loss widened to $726,000, or $0.26 per share, from $269,000, or $0.12 per share, a year earlier. Cash and cash equivalents and restricted cash totaled $6,989,000 as of June 30, 2026, up from $750,000 at the end of 2025, reflecting the net proceeds of the May 2026 public offering.
Kratos Q2 Earnings Beat Estimates and Lifts Full-Year Revenue Guidance
Kratos Defense & Security Solutions reported second-quarter results that beat analyst estimates and raised its full-year revenue guidance. Revenue came in at $458.8 million, up 30.5% year over year and above the $411.2 million consensus, while adjusted EPS of $0.21 beat the $0.15 estimate. The company lifted its full-year revenue guidance to $1.78 billion at the midpoint from $1.73 billion, though its EBITDA guidance of $174.5 million fell short of the $177.7 million analysts expected. CEO Eric DeMarco attributed the strong performance to accelerated demand across hypersonics, jet engines, and defense support, and highlighted new program awards in hypersonics and directed energy counter-UAS systems.
Neros valuation triples to $2.5 billion as drone maker raises $250 million
Defense technology startup Neros has raised $250 million in new funding, tripling its valuation to $2.5 billion. Sequoia Capital and American Strategic Technology Fund co-led the equity round, with Thiel Capital and existing investors also participating. The Torrance, California-based company plans to use the capital to develop new drones, expand overseas, and support manufacturing in allied countries. Neros aims to boost annual production capacity of its Archer one-way attack drone to 1 million units by 2028, up from about 65,000 currently, and expects to deploy its Bandit interceptor drone in combat by year-end. The fundraising follows a five-year U.S. Army contract awarded last month that could be worth as much as $500 million.