Software Eats the Battlefield
Jason@nolovedeepweb
+0.3%
since Oct 16
The idea
I believe defense spending is shifting away from big legacy hardware toward swarms of cheap autonomous drones, the systems built to shoot them down, and the software that ties it all together. This basket leans into smaller drone makers as the highest-conviction piece, backs it with counter-drone specialists since every cheap attacker creates demand for a cheap defense, and steadies the whole thing with large contractors building drone wingmen and tanker drones plus an AI software layer for coordination and targeting.
What it owns
- These companies build the attack and scout drones the Pentagon wants to buy by the hundreds of thousands, and their stocks fell this year even as orders grew. · Kratos Defense & Security SolutionsIt builds the Valkyrie jet drone and the small engines that power drones like it, a direct bet on cheap unmanned aircraft flying next to or instead of pricey crewed jets., AeroVironmentIt makes the Switchblade loitering munition and small recon drones, exactly the cheap, numerous gear defense budgets are moving toward., Ondas HoldingsIt sells both drones and systems that knock drones down, giving it exposure to both sides of the unmanned battlefield shift., Red Cat HoldingsIt makes small scout quadcopters for the Army, the kind of cheap, mass-produced drone defense budgets are meant to buy in volume., Unusual MachinesIt sells US-made drone parts like motors and components, so it benefits whichever American drone maker wins as long as the Pentagon favors domestic supply chains., AIRO Group HoldingsIt is a small drone upstart positioned to benefit if the drone buildout spreads past the obvious winners to new players.34%
- Every cheap attack drone creates demand for a cheap way to stop it, and defense budgets now set aside significant funding for exactly that. · RTX CorporationIt makes the Coyote interceptor, a cheap drone built to shoot down other drones, which is the counter-drone half of this take., L3Harris TechnologiesIt builds sensors, radios and counter-drone systems that detect and jam enemy drones, so more drones on the battlefield means more demand for what it sells., Leonardo DRSIt builds the Army's counter-drone vehicles and sensing gear, and recently won a counter-drone contract from the Pentagon's counter-drone task force., Elbit SystemsIt is Israel's big defense maker with drone defense that has been used in real combat, making it a proven option as other countries shop for counter-drone systems., Teledyne TechnologiesIt owns FLIR, whose thermal cameras and sensors spot drones and also ride on them, so it earns on both sides of the drone fight.27%
- Large defense companies building drone wingmen and tanker drones steady the basket if the smaller makers stumble. · Northrop GrummanIt is building unmanned wingman aircraft that fly alongside crewed jets, steadying the basket through the long shift to autonomous systems., BoeingIt builds the MQ-25, a Navy refueling drone, a sign that even the biggest aircraft programs are going unmanned., TextronIt makes Aerosonde drones used by the military for scouting, a steady, established drone business inside a big contractor.18%
- Software that connects drones, sensors and targeting decisions represents the pure software piece of the shift to unmanned systems. · Palantir TechnologiesIt is the software layer that ties drones, sensors and targeting together, the artificial intelligence targeting and decision software piece of this take.9%
- Cash12%