Drone stocks are gaining media and investor attention – Magic Post

Headlines continue about unidentified drone sightings in New Jersey spreading across multiple states with no explanation as to the origin or purpose of these anomalies. Much attention has been drawn to the topic of drones, whether they are used for hobby, delivery, inspection, military, or photography. This has sparked interest among investors, as evidenced by the significant rise in the volume and price of drone stocks. Here are two stocks that are gaining from the growing media interest in drones.

Red Cat: Vertically integrated drone products and services

Red cat today

$11.89 +0.86 (+7.80%)

(As of 12/24/2024 at 05:19 PM ET)

52 week range

$0.56

▼

$13.89

Price target

$4.00

Drone technology company Red Cat Holding Company Nasdaq: RCAT Provides unmanned robotics hardware and software for military and commercial operations. The company operates through two wholly-owned subsidiaries: Teal Drones and FlightWave Aerospace.

Teal specializes in military drones used for short-range reconnaissance (SRR). It was awarded production selection for the US Army’s Short Range Reconnaissance Program. FlightWave produces and sells the Edge 130 Enterprise 130 vertical take-off and landing (VTOL) tricopter for commercial and military use. With a flight time of just two hours, its autopilot technology allows entire missions to be planned and executed with just a few clicks.

With a market capitalization of $861.7 million, Red Cat stock is up 1,121.5% year-to-date as of December 20, 2024.

Red Cat Stock: Driven by Expectations and Unbridled Expectations?

In the fiscal second quarter of 2025, Red Cat lost $9.1 million on revenue of $1,535 million. Losses since the beginning of the year were US$16.8 million and revenues were US$4.3 million. Red Cat has completed its acquisition of Flightwave Aerospace. The company also received a $1 million contract for Edge 130 Blue drones from the U.S. Army Communications Electronics Command (CECOM). It also received a Tactical Funding Augmentation contract from the US Air Force for FlightWave. The company has embarked on the construction of a new manufacturing facility to enhance production capacity to fulfill existing contracts and expand future sales.

For full calendar 2025, Red Cat expects sales of $80 million to $120 million. This is due to the Army’s SRR T2 contract, which could add up to $79 million in revenue and $50 to $55 million in revenue for other projects.

Partnership with Palantir

Red Cat announced a partnership with Palantir Technologies Inc NASDAQ:PLTR To equip its drones with Palantir’s Visual Navigation (VNav) software, which uses artificial intelligence and satellite imagery to precisely navigate drones without GPS.

“The visual navigation that Palantir has is unlike anything else. There are 40 companies trying to do this right now, but they have access to real-time capabilities in satellite imagery. So, if you’re on a battlefield and three of the buildings are gone and the road is gone… “We can get real-time updates to that map comparing the visuals, what the camera sees to what the map on board, Black Widow, sees,” CEO Jeff Thompson said.

Ambarella: AI-powered SoCs for drones

Ambarella today

$74.05 +0.86 (+1.18%)

(As of 12/24/2024 at 05:19 PM ET)

52 week range

$39.69

▼

$81.32

Price target

$84.17

Semiconductor company Imparella Company Nasdaq: AMBA It develops system-on-a-chip (SoC) designs that enable high-definition (HD) video compression and image processing. Its SoC chipset allows the drones to capture high-quality 4K, 6K, and 8K videos. AI and computer vision algorithms help drones see and understand their environment, helping them better detect and avoid obstacles, track targets, and fly autonomously. Their chips accelerate deep learning inference in drones. Ambarella chips are used in consumer, commercial and security drones. The company competes with some major companies in the computer and technology sector, such as Nvidia company Nasdaq: NVDA Jetson AI platforms, Qualcomm company Nasdaq: Qcomand Intel Corporation NASDAQ:INTEC.

FQ3 results are driven by Edge AI demand on inference processors

For the fiscal third quarter of 2025, Ambarella reported earnings per share of 11 cents, beating consensus estimates by 8 cents. Revenue rose 63.4% year over year to $82.65 million, beating analysts’ estimates of $79.01 million. This increase was due to AI-driven inference processors, which increased revenues by 30% sequentially. The company raised fourth-quarter revenue guidance to a range of $76 million to $80 million, beating consensus estimates of $69.13 million.

“Company-specific factors more than offset widespread market weakness, and we report 30% sequential revenue growth in the fiscal third quarter, above the high end of our guidance range, with strength once again led by new products for our customers, especially Those that include “our highly priced AI inference processors,” said CEO Fermi Wang.

Wang also said that Edge AI now accounts for 70% of total revenue, a record high, and is expected to drive growth in the Internet of Things (IoT) and automotive markets through 2025 and 2026.

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