Defense Innovator Targets Big Gains in US$163B AI Drone Market

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1. Disclosure for the quote from the Stewart Thomson article published on February 12, 2025:

1. For the quoted article (published on February 12, 2025), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$3,500.
2. Author Certification and Compensation: Stewart Thomson was retained and compensated as an independent contractor by Street Smart for writing this article. Mr. Thomson is a retired Canadian financial advisor who has passed the Canadian Securities Course as well as additional technical analysis courses that were mandated by his former employer and approved by Ontario regulatory bodies. For the past 15 years, he has been editing and writing numerous financial newsletters that have a strong focus on charts.  The recommendations and opinions expressed in this content reflect the personal, independent, and objective views of the author regarding any and all of the companies discussed. No part of the compensation received by the author was, is, or will be directly or indirectly tied to the specific recommendations or views expressed.

2. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Sparc AI Inc. (SPAI:CSE; SPAIF:OTCQB; 5OVO:Frankfurt) announced an enhanced version of SPARC AI Overwatch, which allows drones to continuously optimize their telemetry data performance using machine learning and AI models, according to a release on February 13.

Over time, Overwatch learns the behavior of each drone’s telemetry stream and applies corrections to minimize targeting and navigation drift, enhancing accuracy, reliability, and repeatability without the need for new hardware, the company said.

SPARC AI Overwatch serves as the intelligence layer between standard drone sensors and mission outcomes. Through a brief calibration flight and ongoing operational learning, Overwatch identifies drone-specific bias patterns and corrects drift during real-world use, helping to standardize performance across different platforms, environments, and hardware variations.

"SPARC AI Overwatch strengthens with use," the release noted. "Each connected drone contributes operational data that expands validated operating conditions and improves statistical confidence across flight regimes, angles, altitudes, and sensor profiles. As the dataset grows, Overwatch’s priors tighten, accelerating onboarding, improving correction quality, and increasing defensibility over time."

Overwatch is designed to function across different drone manufacturers and IMU configurations, the company said. SPARC AI acts as a software intelligence layer that enables low-cost sensors to perform like higher-grade systems, allowing for enterprise-scale performance improvements without the cost and complexity of hardware replacement.

The upgraded Overwatch platform aligns with the global trend of rapidly deploying low-cost drones at scale, SPARC said. For instance, the U.S. War Department’s Drone Dominance initiative focuses on accelerating the procurement and deployment of large volumes of affordable drones. In this context, SPARC AI’s approach addresses a key bottleneck by enhancing navigation and targeting performance through software, without adding hardware that increases unit cost, battery consumption, payload weight, or integration complexity. This helps maintain range, flight time, and fleet economics while improving operational consistency.

SPARC AI said it has now established its U.S. subsidiary and begun recruiting for key positions, expanding its presence to accelerate customer engagements, deepen strategic partnerships, and scale deployment and support across North America.

Fully Offline Navigation, Laser-Free Target Acquisition

Last month, SPARC announced the successful development and deployment of its fully offline GPS-denied navigation and laser-free target acquisition app on a defense-grade Tactical Edition smartphone.

Designed for challenging environments, SPARC AI ensures operational navigation and reporting even when GPS is unavailable, compromised, or spoofed, and enables camera-based target location identification without the need for a laser range finder or additional equipment, according to the company.

Samsung's Tactical Edition is specifically tailored for military applications and is typically acquired through government and enterprise channels rather than being available to the general public. SPARC AI has integrated its application onto the Tactical Edition device provided by its reseller, Precision Technical Defence, offering an on-device software layer that ensures navigation continuity and supports targeting workflows while operating completely offline.

"With nearly every soldier now carrying a mobile device, the opportunity to deploy SPARC AI on phones is on the same order of magnitude as our drone opportunity," stated SPARC AI Chief Executive Officer Anoosh Manzoori at the time. "Getting there wasn't straightforward; delivering reliable navigation and target location fully offline, on a standard handset, without extra sensors or bolt-on hardware, is a much harder technical problem than it looks."

'Covert, Resilient, and Drone-Agnostic'

¹According to a February 12 technical review by Stewart Thomson, president of Graceland Investment Management Inc. and 13476171 Canada Inc., Sparc AI introduces a zero-signature, GPS-denied target acquisition system for drones and robotic systems, offering precision geolocation targeting, surveillance, tracking, and autonomous navigation. The company targets defense, first responders, and security firms as its primary customers. Modern navigation and targeting systems are susceptible to jamming, spoofing, or signal loss, which can halt missions when GPS fails.

"SPARC AI Inc. replaces GPS dependency with pure visual intelligence," Thomson noted. "The company's patented algorithms calculate exact geolocation using advanced mathematical models and device telemetry data."

Customers receive a software-only target acquisition system without the need for sensors, lasers, radar, lidar, or image recognition. It's a true zero-signature solution, ideal for defense, search and rescue, law enforcement, and commercial operations, Thomson said.

"Overwatch is covert, resilient, and drone-agnostic — empowering defense, rescue, and commercial operators with real-time situational awareness and decisive operational advantage," he said.

On the stock's weekly chart, a solid uptrend is evident following a significant base pattern breakout, Thomson said. Over the past month, volume has softened as the price has consolidated, which is bullish. An exciting inverse head and shoulders pattern suggests a rush to the CA$1.60 area highs is imminent. The key 20,40,10 series MACD indicator resembles a bullish cobra snake, ready to strike and push the price higher.

This has formed an enticing bull wedge, and now there's an upside breakout that completes this technical setup, he said. The inverse head and shoulders pattern targets not only the CA$1.60 high but also prices as high as CA$1.85-CA$2.00. Thomson rated the stock a Speculative Buy.

The Catalyst: Financial Stakes Are Significant

According to Grand View Research, the global drone market was valued at US$73.06 billion in 2024 and is projected to grow to US$163.6 billion by 2030, with a compound annual growth rate (CAGR) of 14.3% from 2025 to 2030. This growth is largely driven by rapid technological advancements in drones, improvements in battery efficiency, AI-powered autonomous systems, and enhanced imaging sensors, which are expanding drone applications across various sectors.

In 2024, North America led the drone market, capturing over 39% of the market share. The hardware segment accounted for the largest revenue share by component, exceeding 58% in 2024, while the multi-rotor segment held the largest revenue share by product, according to researchers.

The financial stakes are significant. A December 5 report for Business Insider by Chris Panella highlighted that "billions of dollars are at stake" in the race to develop defense drones. The Pentagon plans to allocate billions for aerial combat drones in fiscal year 2026 as part of a broader investment in autonomous systems. Additionally, the Air Force is requesting funds for the research and development of autonomous "loyal wingmen" drones that can operate alongside crewed combat aircraft or conduct missions independently. The Department of Defense also plans to dedicate US$3.1 billion to counter-drone technology.

The aerospace and defense sector is at a critical juncture as it moves into the latter part of the decade, according to the "2026 Aerospace and Defense Industry Outlook" released on November 13, 2025, by the Deloitte Research Center for Energy and Industrials. The report emphasizes that recent influences on the industry—such as digital transformation, supply chain disruptions, talent shortages, and geopolitical events—are now converging with new drivers like agentic AI, emerging vehicle technologies, and the rapid advancement of autonomous systems. Defense priorities are increasingly focused on the rapid deployment of AI-enabled systems and collaborative combat aircraft. Deloitte analysts noted that "'Speed to field' is becoming the unifying metric across portfolios."

Drones are being utilized in various roles, including AI-driven navigation, defense contracts, emergency response technologies, and logistics automation, as reported by Kate Stalter for U.S. News & World Report on December 4, 2025. The military's use of drones is also on the rise. "Roughly every 20 years, new technologies arise that change the nature of warfare. Drones are the latest innovation, and the war between Russia and Ukraine is the laboratory highlighting their importance for future conflicts around the world," stated Scott Sacknoff, president and index manager at Spade Defense Index. Spade, based in Bethesda, Maryland, tracks the performance of companies involved in the development, manufacturing, and operations of U.S. defense, security, and aerospace industries. The Invesco Aerospace & Defense exchange-traded fund (PPA) follows the Spade Defense Index.

Ownership and Share Structure²

Approximately 36% of the company is owned by insiders and management, including CEO Manzoori with 31%. The remainder is held by retail investors.

Other significant shareholders include Anthony John Haberfield with 2.59% and Accelerative Investments Pty Ltd. with 1.02%.

The company's market cap is CA$25.6 million with 21.65 million shares outstanding. It trades within a 52-week range of CA$0.19 and CA$1.60.