U.S. government is reportedly set to invest in drone industry. These are Wall Street’s favorite plays

With the Trump administration reportedly discussing potential funding deals with drone companies, Wall Street analysts think names like Unusual Machines and Motorola Solutions are most likely to benefit. Drone stocks surged on Thursday after The Wall Street Journal reported , citing people familiar with the matter, that the Pentagon has held talks with a group of drone companies. The Journal reported that the deals could involve stakes that would award the federal government some form of ownership. In a Thursday note, Oppenheimer analyst Timothy Horan doubled his drone total addressable market for 2027 to $140 billion from $70 billion. Advancements in artificial intelligence are also setting up a new leg of growth for the drone market. In March, Barclays analyst Zornitsa Todorova called drones a physical embodiment of AI. Wall Street's favorite drone plays In another note from March, analysts at Canaccord Genuity wrote the Iran war's impact will likely favor makers of both tactical drones and counter-unmanned aerial systems. Specifically, AeroVironment would be a particular beneficiary, the firm said. Canaccord Genuity analyst Austin Moeller also wrote that AeroVironment and Kratos are the best-positioned stocks in the market for one-way attack and attritable drones, or ones that are reusable but cheap enough they can be lost in combat. Roth Capital Partners also sees Unusual Machines gaining as the U.S. continues investing in its domestic drone push. …