Looking to invest in drones? There are tons of publicly traded drone stocks. And while we’re not going to tell you whether or not to invest in drone stocks — talk to your investment advisor for that one — we can tell you about some of the biggest drone companies out there to invest in.
German-based drone analytics firm Drone Industry Insights took a look at some of the biggest global drone stocks. Here’s a look at what they’re trading at (as of mid-April 2021), how they’ve done over the past three years — and where drone stocks are headed.
Tech giants that are involved in drones
If you want to invest in a big company that’s diversified in many aspects of tech, look to large cap stocks whose companies are involved in some aspects of drones, such as Amazon or Nvidia.
That’s a way to mitigate some risk should the drone industry never actually take off. In a way, Amazon on its own is a diverse investment — you’re investing in the cloud via the company’s Amazon Web Service, e-commerce with the site’s bread-and-butter online shopping arm, groceries via its Whole Foods acquisition and — yes — drones via Amazon Prime Air drone delivery.
Similarly, a company like Nvidia allows you to invest in tons of sensor and computer graphics tech. Betting on Nvidia is a bet on the drone industry, but it’s also a bet on other tech like self-driving cars.
Here are some major companies that have some involvement in drones, but aren’t solely centered around them:
- Amazon (AMZN)
- Ambarella (AMBA)
- Boeing (BA)
- GoPro (GPRO)
- Northrop Grumman (NOC)
- Nvidia (NVDA)
Drone stocks we’re watching in the market
Here are some drone companies to put on your radar. Three drone companies — all of which specifically are focused on air taxis — have announced plans to go public. Keep an eye out for these companies:
Archer Aviation (ACHR) announced plans in February 2021 to go public through a “business combination agreement with Atlas Crest Investment Corp (NYSE: ACIC). The company, which was founded in 2018 in Palo Alto, California, recently received an order worth $1billion from United Airlines, and is valued at approximately $3.8 billion.
Joby Aviation is perhaps best known for having acquired Uber Elevate in December 2020. The Santa Cruz-based company was founded in 2009 and has received $820 million in funding, with a $6.6 billion valuation.
Lilium (LILM) announced a deal in March 2021 with Qell Acquisition Corp, valuing it at $3.3 billion. The German-based company was founded in 2015.
All three of these companies are using a SPAC (Special Purpose Acquisition Company), which is a bit different than an IPO (initial public offering). A SPAC is essentially a “shell company”created by investors to allow companies to more quickly enter the market because the company it’s been acquired by is already publicly traded.
Other drone companies to watch out for (even though we don’t know when/if they’ll be publicly traded)
There are hundreds of private drone companies out there, and it’d be impossible to name them all. That said, there are a few that stand out as potential big players that seem likely to either one day become public companies on their own,, or that are ripe for acquisition.
- Volocopter: Founded in 2011 in Bruchsal, Germany and received $241M Series D Funding in February.
- Wisk: Founded as a venture by Boeing and Kitty-Hawk in 2019 in California’s Silicon Valley
- Skydio: The American drone maker that looks most likely to compete with DJI in the consumer, camera drone space that is famous for its nearly crash-proof, follow-me drone.
One publicly traded drone company to probably skip
While this is not financial advice, there’s one public traded drone company that’s been wildly volatile — so unless you’re a day-trader betting on risky investments, this one probably isn’t buy-and-hold material. EHang (EH), which has been involved in multiple aspects of the drone industry ranging from consumer-focused camera drones to human-toting, flying taxis, is already publicly traded.
Its stock rose in early February after rumors about a partnership with Volkswagen. But a couple weeks later, “their stocks plummeted more than 60% in a single day after a short-seller claimed that the company had “grossly misrepresented its revenue, intellectual property, and progress,” according to a report from Drone Industry Insights.
Should you invest in drone stocks?
We won’t tell you one way or another, and you should always do your own research before investing in any stock — drone stock or not. That said, drone companies are making headlines, and especially with the recent new final rule on Remote ID, the U.S. government has taken a major step in enabling widespread commercial drone use. But still, the industry is volatile and a number of regulations are still holding back the drone industry — whether it’s restrictions on certain companies (as DJI saw with its addition to a restricted trade list), or restrictions around where you can and can’t fly.
“Yet in a disruptive and ever-evolving sector such as drone tech, there is no linear growth on stock prices,” DII report stated. “Drone-specific companies are indeed out there being publicly-traded, and there will be more. Given how rapidly the technology is evolving and specializing, perhaps by 2030 we will have an umbrella that includes ‘passenger drone stocks’ and “counter-drone stocks” rather than merely drone stocks’.”
Curious how to get started? Here’s a guide from NerdWallet on How to Buy Stocks.
Are you invested in any drone stocks? Leave a comment below!