While the economic recovery following the pandemic-related recession has dominated the investing discussions and decisions, there are other potential investment opportunities emerging and not all of them involve pharmaceuticals and biotech. The defense sector seems to be quietly generating a trading opportunity.
Skyborg Vanguard Drones
The Air Force has been experimenting with drones recently, and that could send some stocks flying high as per this Motley Fool article. The US military is preparing for a technologically advanced future where fighter pilots wouldn’t have to enter the cockpit and fly fighters. The jets would be able to fly themselves. The drones are preparing for such a future, as part of the Skyborg Vanguard drone project.
Skyborg Vanguard was announced along with the Department of Defense’s description of an indefinite-delivery/indefinite-quantity contract worth $400 million, which would be divided among its four greatest defense contractors.
Initially, these drones would support the main, manned flights. They would support the human pilots in their missions in the battlespace they are operating in, and help them with better situational awareness to enhance their survivability in combat missions. In due course, human pilots could be totally eliminated.
Aerospace Companies in the Mix
The recipients of the above-mentioned contract were Northrop Grumman ($NOC), Boeing ($BA), Kratos Defense & Security ($KTOS), and General Atomics. These companies would individually spearhead the development of autonomous aircraft to be sent on various missions, and deliver “massed combat power”. These aircraft are expected to raise the potent force of the US Air Force. The due date of the contract is July 2026. Each company would receive around $100 million during the next 6 years. They are expected to develop “missionized prototypes”. Their drones will work together, and these contractors would also develop software payloads incorporating the core Skyborg autonomy system and modular hardware for manned as well as unmanned teaming.
With the common software, it’s clear that Skyborg Vanguard could award further contracts to multiple companies. It wants drones by various manufacturers to work together, and this could benefit all these aerospace companies. It aims at continuous software and hardware innovation. Potential aerospace investing opportunities could be in the making.
If a stock market crash does come your way, Motley Fool analyst Sean Williams suggests social network Pinterest, cybersecurity company Ping Identity, and search engine and Internet services giant Alphabet ($GOOG, $GOOGL).
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