Market Insights

19 - 25 October 2026

The drone! The drone!

This week’s insights include:

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Drones have become a serious investment theme: No longer just toys or weapons, they are reshaping defense, delivery and farming. One forecast has the global drone market roughly doubling from about US$69 billion in 2026 to US$148 billion by 2036.

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The economics are hard to ignore, especially in defense: An FPV drone costing as little as US$400 can take out a tank worth many times more, and is far quicker to replace. It’s why the US launched a US$1 billion plan to buy up to 340,000 combat drones over two years. The community’s Next Age Defense Tech watchlist tracks names at the edge of this.

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Delivery and agriculture are the next frontiers: One estimate sees business-to-consumer drone deliveries jumping from 5 million in 2024 to over 808 million within a decade, while drone-sprayed US farmland rose almost 59% year over year. The use cases are multiplying faster than the regulation around them.

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The fastest-growing niche might be stopping drones, not flying them: As drones spread, so does the tech built to detect and defeat them. One forecast has the counter-drone market growing from US$11.6 billion in 2025 to US$55.3 billion by 2034, with Droneshield (ASX:DRO) among the listed pure-plays.

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A hot theme isn’t the same as a good investment: The market-size forecasts vary wildly, clean drone exposure is surprisingly hard to find on public markets, and even bullish community narratives admit a lot of growth is already in the price. The trick is finding the right opportunity, not just the right theme.

This week's Market Insights article is a 10 minute read!

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Hi everyone,

‘Drones’ is one of those themes that’s hard to ignore. Whichever way you look at it, I get the sense that they are ‘the way of the future’ in many regards. The numbers are enormous, the use cases keep multiplying, and the total addressable market (TAM) charts all point up and to the right.

But a big market and a good investment aren’t the same thing, and the gap between them is where most of the money is won or lost.

The parallel I’d draw is AI. Frontier labs are posting revenue growth almost no one has seen before, and yet the question that remains for investors is whether that growth ever turns into durable cash flow and profit. Enormous demand doesn’t help you much if the thing being sold has no moat around it.

Drones strike me as similar. Building a drone, it turns out, isn’t especially hard, lots of companies can do it, which starts to look a lot like commodification. And commodities, however fast the market grows, tend to compete their own margins away.

So the more interesting thought experiment is whether a given drone company has something its rivals don’t… real technical difficulty, network effects, scale, a regulatory edge, anything that lets it earn a return the rest of the field can’t. That’s usually where the counter-drone and specialist niches get more interesting than the hardware itself.

That’s the lesson I took from this week’s Market Insights. To look past the trend and the TAM, and ask what is actually special.

Sincerely,

Mitchell Lawler, Senior Investment Editor