According to a May report from Market Research Future, the global military drone market was valued at US$13.42 billion in 2023 and was projected to reach US$30.5 billion by 2035. This growth reflected a compound annual growth rate (CAGR) of 7.09% from 2025 to 2035. Market Research Future identified defense, homeland security, and research and development as the key end-use segments contributing to this trajectory, with significant investment driven by rising defense budgets and an increasing need for advanced surveillance, reconnaissance, and combat capabilities.
The report highlighted that surveillance applications alone were expected to rise from US$5.0 billion in 2024 to US$10.5 billion by 2035. Combat drone applications were projected to increase from US$3.5 billion to US$7.2 billion over the same period, while logistics and reconnaissance roles were also expected to see significant growth.
According to Market Research Future, "Purchasing cutting-edge unmanned aerial vehicles (UAVs) is a top priority for governments in an effort to enhance military operations, surveillance, and reconnaissance."
This investment also extended to technological partnerships. Market Research Future noted increased collaboration between defense organizations and technology companies as a contributing factor to more autonomous and efficient drone systems. These included drones incorporating artificial intelligence (AI) and machine learning to perform independent battlefield tasks, such as route optimization, threat identification, and precision targeting.
Counter-Drone Technologies and Homeland Defense
In a report published on October 13 by The Washington Times, the urgency of building cost-effective counter-drone tools was outlined as a major concern for the U.S. military and law enforcement. The piece focused on the U.S. Army's efforts to upgrade its sensor capabilities, including the integration of Teledyne FLIR's SkyRaider drone with the MUVE B330 payload into the Stryker reconnaissance vehicle system under a five-year, US$168.3 million contract.
Officials cited the increasing use of inexpensive tactical drones by hostile actors as a galvanizing threat. "The wide breadth of this threat requires a no one-size-fits-all approach," said Maj. Gen. David Stewart of the U.S. Army during a panel discussion at the Association of the U.S. Army (AUSA) conference.
Multiple technologies were on display during the AUSA event, including Honeywell's SAMURAI system, which can track and intercept up to 400 drones using radar, cameras, and electronic warfare. Tom Konicki of Honeywell Aerospace Technologies said, "Drones are very much a part of warfare today. But it's not just warfare . . . Everybody is having this problem." His comments emphasized the dual-use nature of drones across both military and domestic security applications.
The article also outlined concerns from lawmakers about the risk drones pose at high-profile public events, prompting increased attention toward directed energy weapons and rifle-mounted systems such as Israel Weapons Industries' ARBEL. This highlighted the broader industry shift toward cost-effective, modular, and scalable anti-drone capabilities.
Global Context and Industry Response
On September 30, Financial News Media reported that technological advances in avionics and precision-guided munitions were critical to the growth of the international drone market. Citing Markets and Markets, the report stated that the military drone sector was projected to grow from US$15.80 billion in 2025 to US$22.81 billion by 2030, at a CAGR of 7.6%.
According to Markets and Markets, "Breakthroughs in avionics, sensors, communication, AI integration in drones have massively boosted the capabilities of these drones." The use of drones equipped with high-resolution surveillance cameras and improved navigation systems enabled more effective and targeted combat operations, reinforcing the sector's strategic importance to modern militaries.
The Financial News Media report also emphasized increased investment in research and development from both major defense contractors and startups. It attributed North America's dominant market share to the presence of leading UAV manufacturers and strong defense budgets, particularly in the U.S.
Also on September 30, NPR reported from Lviv, Ukraine, where the country's growing domestic drone industry was on display. Ukrainian companies like FRDM Group showcased drones ranging from single-use explosive units to reusable strike drones. Maksym Yakovlev of FRDM Group described a model that could carry 30 pounds of weaponry and return after deployment, selling in pairs for under US$70,000.
Ukraine, which had no significant drone industry before Russia's 2022 invasion, was expected to produce over four million drones in 2025. Yaroslav Azhnyuk, a former Silicon Valley entrepreneur, said, "Ukraine today is the defense valley of the world," reflecting how necessity had fueled innovation. NPR noted that some Ukrainian drones had been used to strike oil infrastructure deep inside Russian territory, underscoring their operational significance.
Ukrainian officials indicated that the country now produced nearly 40% of its own weapons and was developing long-range systems like the Flamingo cruise missile, capable of traveling 1,800 miles.
Commercial Expansion and Broader Applications
Earlier, in the summer, a report from Nasdaq described the global drone market as undergoing expansion beyond military uses into sectors such as agriculture, logistics, and infrastructure inspection. In China alone, more than 2.2 million drones were registered, with the country forecasting a "low-altitude economy" valued at US$490 billion by 2035.
The Nasdaq article reported that U.S. policy and favorable regulatory environments had contributed to a surge in commercial drone activity. Companies with diversified portfolios spanning military and civilian use cases were considered well-positioned. The report cited advances in 5G, LiDAR, and autonomous flight systems as key enablers of growth. AeroVironment, AIRO Group, and Kratos Defense were named as notable performers in 2025, reflecting growing investor interest in the sector.
As the drone sector continues its rapid evolution, one company has emerged with particular momentum in bridging hardware and defense applications. That company is Unusual Machines, which has gained attention for positioning itself at the intersection of drone manufacturing, component supply, and defense contract engagement.
Unusual Machines
On October 15, Unusual Machines Inc. (UMAC:NYSEAMERICAN) announced a new order from the U.S. Army’s 101st Airborne Division for 3,500 NDAA-compliant motors to power the Division’s Attritable Battlefield Enabler (A.B.E.) V1.01 drones. The order includes additional U.S.-made components—such as the Aura Analog Camera, Aura VTX, Brave Flight Controller, and Brave ESC—all of which are BLUE UAS-listed and meet federal compliance standards. The motors will be produced at Unusual Machines’ new Florida-based manufacturing facility. According to the company, the Army has indicated plans to expand its procurement with a potential follow-on order of 20,000 components in 2026.
Earlier in the month, on October 3, Unusual Machines reported that it had secured an US$800,000 order from Red Cat Holdings Inc. (RCAT:NASDAQ) for use in the FANG™ drone platform. The order includes a range of NDAA-compliant components such as the BLUE UAS-listed Aura Analog Camera, Aura VTX, Brave Flight Controller, Brave ESC, HDO+ Goggles, and motors. These will support Red Cat's efforts to bring American-made FPV drones to market for defense, public safety, and government agency applications.
Stacy Wright, Executive Vice President of Revenue at Unusual Machines, said, "High-quality, NDAA-compliant components are now table stakes — what truly matters is how fast you can deliver them." Jeff Thompson, CEO of Red Cat, added that the partnership would "strengthen our ability to deliver high-performance, NDAA-compliant systems that defense and public safety operators can trust."
The company also announced a US$12.8 million order on September 30 to supply over 160,000 components for Strategic Logix's Rapid Reconfigurable Systems Line (RRSL), an interoperable UAV platform designed for scalable deployment. The order includes core flight components such as Unusual Machines' Aura Analog Camera, Brave ESC, and other ground control systems. The RRSL platform offers manual, autonomous, and fiber-enabled configurations, with entry points starting at US$800 per unit.
Strategic Logix CEO Jeremy Schnipke said, "The RRSL is more than a product line — it's a foundation for partnership. By working alongside Unusual Machines and a coalition that includes defense leaders, we can move with speed today while building the framework for deeper government relationships."
Litchfield Hills raised its target price for Unusual Machines to US$25 per share on October 2, up from its trading price of US$14.86 at the time of the report. Analyst Barry Sine cited "a series of transformative moves" by the company and reiterated a Buy rating.
With production and deliveries set to begin in the fourth quarter, Unusual Machines said it continues to expand its role in the domestic drone supply chain. Wright stated, "We've been deliberate — maintaining the discipline and flexibility necessary to scale with the industry. That foundation lets us execute on short timelines with reliability as demand develops."
Unusual Machines Maintains Strong Growth Trajectory
Unusual Machines is continuing to gain traction as a U.S.-based manufacturer of drone components, with a focus on first-person view (FPV) systems used across commercial and defense sectors. Headquartered in Florida, the company is building a key role in the UAV supply chain by supplying NDAA-compliant parts for cost-efficient, remotely piloted aircraft.
In July, the company announced that its Fat Shark Video Transmitter (VTX) had been approved by the Defense Innovation Unit for inclusion in the Blue UAS Framework. This designation confirms the VTX's cybersecurity compliance for Department of Defense use. The component joins a growing lineup of core FPV products offered by Unusual Machines that meet federal procurement requirements. Designed for analog video transmission, the VTX supports real-time, low-latency visual feeds over extended distances — an increasingly important feature in the deployment of low-cost tactical drones. To meet anticipated demand, the company is expanding its manufacturing footprint with a 17,000-square-foot motor production facility in Orlando, expected to come online in September.
According to Barry Sine of Litchfield Hills Research, Unusual Machines has been "moving at the speed of crazy," as stated in a September 24 research note. "Collectively, we believe that these [recent] moves set the stage for a step-function in growth, with enterprise revenues expected to nearly triple in 2026." He noted that new components are already gaining traction in government markets. "Unusual Machines Inc.'s rotorriot.com, historically focused on the first-person view hobbyist market, is now serving institutional customers, including military units.
Analyst Barry Sine cited "a series of transformative moves" by the company and reiterated a Buy rating.
Sine also provided updated financial projections, stating in an October 2 note, "Our updated model on Unusual Machines Inc. suggests a significant earnings per share beat for Q3/25, which should attract attention from the quantitative funds that dominate microcap trading. We expect this to drive meaningful upward momentum in the share price."
The firm forecasts full-year 2025 enterprise revenue of US$3.5 million, backed by a US$1.6 million order for goggles and cameras. Additional revenue from Brave F7 controller orders is expected to meet or exceed Litchfield Hills' US$2.5 million enterprise revenue estimate for the second half of 2025. While drone manufacturers have previously purchased small lots to prototype new builds, this represents the first confirmed military procurement via a retail website," he wrote in an October 14 update.
Earlier, on August 19, Sine emphasized the potential for a major turning point. "We believe that Unusual Machines Inc. is standing at the threshold of a major order cycle. Execution on defense supply chain integration, combined with domestic production scale-up, could rapidly transform the company's revenue trajectory and margin profile." That same day, Austin Bohlig of Needham & Co initiated coverage with a Buy rating, citing "a robust component portfolio, a new U.S. manufacturing facility ramp and strong Trump Administration ties," and noted that the company appeared well-positioned to "capture share in the ~$620M U.S. component market and drive substantial growth."
Momentum has also been reflected in recent stock performance. On August 5, Thomas Hughes of MarketBeat wrote, "Unusual Machines Inc.'s stock price action suggests it is set to pop when the Q2/25 earnings report is released. The action in early August is mixed, but it supports an uptrending market and only needs a catalyst to spark another wave of buying."
Domestic Manufacturing, Legislation, and Strategic Growth
Several ongoing developments in the U.S. drone sector align with Unusual Machines’ recent activity, including increased government and defense priorities. The company signed a lease for a 17,000 square foot motor manufacturing facility in Orlando, Florida, with initial deliveries expected to begin in September 2025. This domestic production capability is expected to reduce reliance on foreign suppliers and support the rollout of 2207, 2807, and 3220 class motors for 5", 7", and 10" propeller drones.
The company has also entered a definitive agreement to acquire Rotor Lab, an Australia-based motor manufacturer. This acquisition is expected to bring engineering expertise and international customer relationships that will enhance Unusual Machines' production capacity and market reach.
Recent legislation, such as the American Securities Drone Act, the Countering CCP Drones Act, and the 2025 National Defense Authorization Act, has created barriers for Chinese-made drones and components, while incentivizing domestic sourcing. These policies, combined with increased tariffs and procurement restrictions, have positioned Unusual Machines' U.S.-based, NDAA-compliant components as a competitive alternative in defense and enterprise markets.
Streetwise Ownership Overview*
Unusual Machines Inc. (UMAC:NYSEAMERICAN)
In addition to regulatory tailwinds, the company reported strong financial performance. As of August 2025, Unusual Machines had approximately US$81 million in cash with no debt, and achieved 65% year-over-year revenue growth for the first half of 2025. Enterprise sales have scaled significantly, accounting for approximately 30% of revenue in Q2 2025 after the launch of new Blue UAS Framework components including flight controllers, cameras, and motor controllers.
With increasing government urgency to invest in secure supply chains, forthcoming FAA rule changes expected to expand commercial drone usage in 2027, and ongoing global conflict driving defense demand, Unusual Machines is aligned with key drivers shaping the next phase of drone industry growth.
Ownership and Share Structure
About 7.5% of the company is owned by management and insiders, UMAC said. The rest, 92.5%, is retail and institutional investors.
Unusual Machines has 30.97 million shares outstanding as of October 2, according to Refinitiv. Its market cap is US$463.68 million. Its 52-week high and low share prices are US$23.62 and US$1.28 per share, respectively.
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Important Disclosures:
- Unusual Machines is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Unusual Machines and Red Cat Holdings.
- James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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