The race to dominate the drone economy has just entered a new phase. On August 6, 2025, U.S. Transportation Secretary Sean P. Duffy unveiled a sweeping proposal that could dramatically expand where and how drones operate in American skies. The new Beyond Visual Line of Sight (BVLOS) rule aims to remove one of the biggest regulatory barriers in the industry. By allowing unmanned aircraft to fly without needing direct line of sight from the ground, this rule opens the door to broader commercial use across sectors like agriculture, shipping, infrastructure, emergency response, and energy.
Until now, companies had to seek individual waivers for BVLOS flights, limiting scale and discouraging investment. This proposal changes the game entirely. It gives American drone makers and service providers a clear runway for growth while enabling new business models to emerge. From autonomous crop monitoring to rapid medical delivery, the applications are vast, and the market opportunity is growing fast. The White House has made it clear this is a strategic move to give U.S. firms an edge over foreign competitors.
With a more supportive regulatory environment taking shape and commercial adoption set to accelerate, investors have a rare chance to get ahead of a major turning point in the drone market.
Now, let’s look at four stocks worth watching.
ZenaTech (Nasdaq: ZENA) is emerging as one of the most compelling names in the drone industry, blending high-performance unmanned aerial systems with a rapidly expanding enterprise software and Drone as a Service (DaaS) platform. As the FAA moves forward with a national framework for beyond visual line of sight (BVLOS) drone operations, ZenaTech’s vertically integrated model puts it in prime position to scale both domestically and abroad.
The company’s flagship drones are designed for fully autonomous operation, making them well-suited for the new BVLOS regime. ZenaTech has already logged tens of thousands of autonomous flight hours and operates in a range of critical industries, including precision agriculture, energy, infrastructure inspection, and defense. Through recent DaaS-focused acquisitions, ZenaTech now owns a national deployment footprint and a pipeline of recurring revenue contracts that reduce its reliance on hardware sales alone.
While many drone companies are focused solely on airframes or navigation, ZenaTech is building a complete ecosystem. Its CommandOS software platform combines AI-driven mission planning, real-time telemetry, edge analytics, and data lifecycle management—a key differentiator as large enterprise and government clients increasingly seek end-to-end drone solutions. With the infrastructure already in place to support remote autonomous operations, ZenaTech is poised to scale services rapidly as BVLOS flights become standard.
Strategic alignment with U.S. government priorities has also been a tailwind. ZenaTech is among a small number of American drone manufacturers that meet federal sourcing and cybersecurity requirements, a critical edge as federal agencies, defense contractors, and utility operators look to de-risk their supply chains. In July, the company was awarded a multi-year Department of the Interior contract covering autonomous drone services across five regions, and it is currently bidding on additional federal and state-level BVLOS initiatives. The company has also deepened its partnerships with agriculture technology leaders and electric utilities, two sectors likely to benefit early from BVLOS deregulation.
Financially, ZenaTech is in scale-up mode. In its most recent quarter, the company reported 60% year-over-year revenue growth and a 40% increase in software and services bookings. Gross margins are trending upward thanks to increased software adoption and higher utilization of its DaaS assets. While the company is not yet profitable, management has guided for positive adjusted EBITDA by mid-2026, driven by multi-year enterprise contracts and broader adoption of autonomous drone infrastructure.
With proven technology, strong government alignment, and an expanding recurring revenue base, ZenaTech is uniquely positioned to capitalize on the next phase of U.S. drone adoption. If the BVLOS rule accelerates industry-wide commercial deployments as expected, ZENA could be among the clearest beneficiaries—not just selling drones, but powering the operational backbone of a new autonomous aerial economy.
Ondas Holdings Inc. (Nasdaq: ONDS) appears especially well-positioned to benefit from the new BVLOS rule thanks to its fully autonomous drone platforms and recent momentum in the defense and public safety markets. Through its Ondas Autonomous Systems division—which includes American Robotics and Airobotics—the company offers advanced, AI-powered solutions like the Optimus System and Iron Drone Raider. Both platforms are designed for automated, remote operations and have already secured major regulatory milestones, including the first FAA Type Certification for automated BVLOS flights without an on-site operator.
Recent contract wins underscore the growing demand for Ondas’ drone technology. In June, the company announced a $14.3 million order from a leading defense customer for the Optimus System—its largest to date—and has since added new government contracts across the U.S., Europe, and the Middle East. Ondas also continues to expand its ecosystem with the Kestrel system, a counter-UAS and airspace management platform that enhances situational awareness and is deployable in both fixed and mobile settings.
Backed by strong financials, Ondas reported $4.2 million in Q1 revenue—up over 500% year-over-year—and reaffirmed its full-year revenue target of at least $25 million, with the majority expected to come from its drone business. The company ended the quarter with over $25 million in cash and is scaling production to meet rising demand.
With key FAA approvals already in place, a growing global customer base, and strategic partnerships with firms like Palantir and Volatus Aerospace, Ondas is not just ready for a BVLOS-enabled future—it’s already operating in one. Investors looking for a U.S.-based pure-play on autonomous drone infrastructure may find ONDS a compelling long-term opportunity.
AeroVironment, Inc. (Nasdaq: AVAV) is a well-established leader in defense technology, providing integrated autonomous systems and precision strike capabilities across air, land, sea, space, and cyber domains. The company’s portfolio spans uncrewed systems, counter-drone technologies, space-based platforms, directed energy, and electronic warfare solutions. With a national manufacturing presence and a strong innovation pipeline, AeroVironment delivers proven and future-focused technologies tailored to meet evolving military and government needs.
The company reported a strong finish to fiscal 2025, posting record fourth-quarter revenue of $275.1 million, a 40 percent increase year-over-year, and annual revenue of $820.6 million, up 14 percent. Net income for the quarter reached $16.7 million, while non-GAAP adjusted EBITDA hit a record $61.6 million. Total bookings for the fiscal year topped $1.2 billion, reflecting rising demand for AeroVironment’s products and services.
CEO Wahid Nawabi highlighted the company’s multi-generational Uncrewed Systems and Loitering Munitions as key growth drivers. He also emphasized the strategic acquisition of BlueHalo, which expanded AeroVironment’s portfolio with complementary technologies and enhanced domestic manufacturing capabilities. This combination positions the company well to meet increased global demand and deliver strong growth in fiscal 2026.
AeroVironment’s advanced Wildcat uncrewed aircraft system recently reached important milestones in DARPA’s Early VTOL Aircraft Demonstration. Designed for maritime operations, Wildcat has successfully completed key flight transitions and payload integrations, demonstrating its readiness for complex missions. This progress underscores AeroVironment’s commitment to innovation and operational excellence in next-generation air dominance.
The company’s current capital raise aims to support debt repayment and expand manufacturing capacity, fueling continued growth and execution. With a solid financial footing, expanding backlog, and cutting-edge technology, AeroVironment remains a key player in the evolving defense technology landscape.
Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS) is a technology-driven company focused on defense, national security, and commercial markets. The company is known for its internally funded research and development that rapidly brings affordable, mission-critical solutions to market. Kratos emphasizes proven technology over untested innovation, allowing it to deliver reliable, cost-effective products designed for rapid, large-scale manufacturing. This approach creates a competitive advantage, especially for large prime contractors and government clients.
Kratos specializes in a broad range of areas, including virtualized ground systems for satellites, command and control software, jet-powered unmanned aerial drones, hypersonic vehicles, propulsion systems for drones and missiles, and advanced microwave electronics for missile defense and counter-drone systems. The company also develops virtual and augmented reality training systems for warfighters.
In April 2025, Kratos received a sole-source production award worth approximately $30 million to manufacture air defense system hardware at its secure facilities. CEO Eric DeMarco highlighted Kratos’ reputation for delivering military-grade hardware that must perform flawlessly for national security customers. The company is already in large-scale production on multiple programs related to hypersonics, missile defense, and air defense systems.
Kratos is also expanding its automated truck platooning technology, deploying systems along major freight corridors in Ohio and Indiana in partnership with state agencies and the U.S. Department of Transportation. This technology, originally developed for military use, aims to improve safety, resilience, and efficiency across commercial logistics and critical infrastructure sectors.
Financially, Kratos reported first-quarter 2025 revenues of $302.6 million, reflecting solid organic growth and a strong backlog of $1.5 billion. The company maintains a healthy book-to-bill ratio and a robust pipeline of nearly $12.6 billion in bids and proposals.
Partnerships like the teaming agreement with GE Aerospace are advancing the development of affordable propulsion systems for next-generation unmanned aerial systems and combat aircraft. Kratos’ focus on cost-effective, scalable technologies positions it well to benefit from expanding defense budgets and evolving drone regulations.
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