Drones Increasingly Important on Battlefield, Homefront

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The expansion of drone use in the military and other domestic applications is moving forward at a dramatic pace, as Ukraine has carried out one of its largest-ever drone attacks on Moscow, which is more than 270 miles away from the disputed border between the countries, CNBC reported.

"This is one of the largest attempts to attack Moscow with drones ever. We continue to monitor the situation," Moscow Mayor Sergei Sobyanin said in a Google-translated Telegram post after assessing the strikes resulted in "no damage or casualties at the site of the fall of the debris" in earlier updates reporting the offensives, the network said.

As the technology used for the vehicles improves, they are becoming more ubiquitous in the military and even in American cities and towns.

The aircraft carrier George H.W. Bush now has the world's first air drone warfare center, a control room that will host operators of the MQ-25 Stingray refueling drone, according to the Navy Times. 

After at-sea testing next year, the technology is being planned for other carriers like the Carl Vinson, Theodore Roosevelt, and Ronald Reagan.

"The control station is the latest step toward getting the Stingray into the fleet, where it will refuel fighter jets mid-flight, helping the sea service's strike arm to stay airborne longer — a capability that would be particularly helpful should war with China break out in the watery expanse of the West Pacific," author Geoff Ziezulewicz wrote.

Pushing the Limits of Autonomous Operations

The Air Force is also moving forward with drones in their programs, including Task Force 99 at Al Udeid Air Base in Qatar, which is exploring the use of unmanned aircraft systems (UASs) and other cutting-edge tools like artificial intelligence (AI) and 3D printing, Defense Scoop reported.

"TF-99 is able to push the limits with autonomous operations and artificial intelligence capabilities, building trust in emerging technologies that are becoming more and more relevant," Col. Jeffrey Digsby, commander of the unit, which falls under Air Forces Central (AFCENT) in the U.S. Central Command area of responsibility in the Middle East, said in a release quoted by the site. "We are able to rapidly create new capabilities for the warfighter, find novel ways to utilize those technologies in theater, and demonstrate their usefulness to the larger Air Force and Department of Defense."

"We've got either on-order or on-hand now 98 different UASs across 13 types with ranges from 20 kilometers out to 900 miles," Lt. Gen. Alexus Grynkewich, then commander of AFCENT, told reporters during a Defense Writers Group meeting last fall, according to Defense Scoop. "It's exciting to me to see the department focusing on this. And I think we've got a role to play in advancing that technology and kind of looking at the changes of warfare."

Defense Scoop noted that the Air Force continues to add to its drone fleet and recently issued a solicitation for a new drone.

Not Just For Battle

However, war is not the only application for vehicles. In an article by James O'Donnell for MIT Technology Review on August 16, O'Donnell noted that "No longer limited to small quadcopters with insufficient battery life, drones are aiding search and rescue efforts, reshaping wars in Ukraine and Gaza, and delivering time-sensitive packages of medical supplies. And billions of dollars are being plowed into building the next generation of fully autonomous systems."

One area that could see expansion is the policing industry, O'Donnell wrote, as more than 1,500 U.S. police departments have drone programs, according to the Atlas of Surveillance. They pilot the drones in search rescue operations and to monitor events and crowds.

However, the Federal Aviation Administration's (FAA) "line of sight" rule requires pilots to see their drones at all times, limiting their range and can hold such programs back. Like many, the Scottsdale Police Department in Arizona is seeking a waiver to be able to fly further.

The department said its drone "will kick off its drone-as-first-responder program and will play a role in the department's new 'real-time crime center.' These sorts of centers are becoming increasingly common in U.S. policing and allow cities to connect cameras, license plate readers, drones, and other monitoring methods to track situations on the fly," O'Donnell wrote.

Also on tap is something many thought would be a part of life already with programs from Amazon and Google: Drone deliveries.

Like police departments, those programs were previously limited to flying within the pilot's line of sight. So, Amazon developed an onboard system that will allow its drones to detect nearby objects and avoid collisions.

"Amazon announced the FAA had granted the company a waiver and permission to expand operations in Texas, more than a decade after the Prime Air project started," O'Donnell wrote. "And in July, the FAA cleared one more roadblock by allowing two companies — Zipline as well as Google's Wing Aviation — to fly in the same airspace simultaneously without the need for visual observers."

Unusual Machines Inc.

The West is working quickly to try and counter the world's largest drone maker, the Chinese company DJI, or Da-Jiang Innovations, which has cornered nearly 70% of the global drone market.

One American drone and drone component maker, Unusual Machines Inc. (UMAC:NYSEAMERICAN) wants to fill that void for the military. In a significant milestone for the company, it recently announced that its Rotor Riot Brave F7 Flight Controller has been approved for the Blue UAS Framework list for U.S. Defense Department purchases.

The Blue UAS Framework initiative by the Defense Innovation Unit (DIU) sets rigorous standards for cybersecurity, supply chain integrity, and operational requirements. This is done to ensure that certified UAS are trusted and secure, Unusual Machines noted. In order to be added to the Blue UAS Framework, a Department of Defense (DoD) sponsor needs to advocate for the product, and it has to represent a new capability.

The DoD and other agencies are exploring "the integration of low-cost dual-use technologies — like the products we make — in their procurement and supply chains going forward," said Unusual Machines Chief Executive Officer Allan Evans.

The Pentagon also announced it has chosen systems for the second tranche of its Replicator initiative, which is meant to quickly get thousands of drones ready to counter China in any future conflict.

According to Defense News on August 8, Deputy Defense Secretary Kathleen Hicks unveiled the department's plans for Replicator last year. Since then, the Pentagon has selected its first tranche of capabilities, crafted acquisition strategies and concepts of operation, trained units to use the initial systems, and secured nearly US$1 billion for fiscal years 2024 and 2025.

In addition to being approved for the Blue UAS framework, Unusual Machines was selected to provide drones and components for Red Cat's FANG™ line of FPV systems and launched the first NDAA-compliant Made in the U.S. flight controller for FPV drones.

Analyst: Industry Very Much a Growth Market

*Technical Analyst Clive Maund noted, "This is believed to be a good point for investors to take positions in the stock" because of these catalysts.

"The drone industry is very much a growth market and looks set to remain so for the rest of this decade, with the primary drivers being expanding military conflict, surveillance, and, increasingly, in the case of U.S.-based drone and drone component manufacturers such as Unusual Machines, what is called 'onshoring,' which means production returning from overseas places like China back to the homeland in large part due to security concerns," Maund wrote. "This is a process that is likely to be assisted and expedited by the government."

Maund said the stock has advanced towards the breakout point of a Head-and-Shoulders bottom.

"A breakout from this pattern will mark the start of a major new bull market in the stock," he wrote. "With volume building up this month and the now rising 50-day moving average coming into play beneath to support the price and momentum (MAD) increasingly positive, such a breakout looks imminent, so we stay long, and Unusual Machines continues to be rated a Strong Buy here."

Ownership and Share Structure

About 21.6% of the company is owned by management and insiders, UMAC said. The rest, 78.4%, is retail.

The company's market cap is US$10.95 million, with 9.33 million shares outstanding. It trades in a 52-week range of US$5.54 and US$0.98.