Pannysylvania Magazine

Naples, FL – Sept. 3 – For years, the drone hovering over that job site, farm field, or police cruiser was almost certainly made by DJI, the Chinese manufacturer that controls roughly half the global market. That’s changing at the government level. Washington has spent the last two years restricting Chinese-made drones from federal agencies, the military, and increasingly critical infrastructure and public safety work, and those agencies need a domestic replacement. A small group of American drone companies is positioning itself to benefit from that shift, and one of the smallest names in the group is ZenaTech.

ZenaTech (ZENA) trades under $2 with a market cap of just $147 million, and its business looks different from the defense-hardware names usually associated with this shift. Its current revenue engine is Drone as a Service, providing land surveying and civil engineering services to government and construction customers, with the business expanding rapidly through acquisitions. Its 27th deal closed this month, adding Idaho-based Galena-Benchmark Engineering and its 30 years of local customer relationships, ZenaTech’s 13th state. “This acquisition expands our Drone as a Service footprint into Idaho… establishing a strong presence in a market supported by growing construction, agriculture, infrastructure, and public sector demand,” CEO Shaun Passley said.

The defense-adjacent piece is ZenaDrone, the company’s hardware division, which is preparing its IQ Quad land-survey drone for submission to Blue UAS, the Pentagon’s certification pathway for trusted, NDAA-compliant suppliers. “Preparing the IQ Quad to enter the Blue UAS certification process is an important step in expanding our portfolio of trusted, NDAA-compliant drone solutions,” Passley said. The company has identified potential applications with agencies including the Army Corps of Engineers, Air Force Civil Engineer Center, and U.S. Geological Survey. Analysts have a Buy rating on it with a $4.49 price target, more than double where it currently sits, and the stock has pulled back sharply from its own 52-week high near $7.

Three other companies rounding out this group show different angles on the same shift.

Red Cat Holdings (RCAT) makes the Black Widow reconnaissance drone, already the U.S. Army’s Short Range Reconnaissance platform. In late July, the U.S. Air Force awarded Red Cat a $2.49 million contract to evaluate Black Widow as a replacement for its aging Teal 2 fleet. “We are proud to support the U.S. Air Force… as the AFSFC evaluates Black Widow for missions at the tactical edge,” CEO Jeff Thompson said. The stock has climbed to a $1.56 billion market cap, up nearly 70% this year, on revenue that grew 520% year over year last quarter, and analysts rate it a Strong Buy with a $18.33 target, 79% above where it trades today.

Ondas Holdings (ONDS) is the biggest winner of the group. Its defense subsidiary, Mistral, was just awarded an order worth more than $50 million under the U.S. Army’s Lethal Unmanned Systems program, part of a $982 million multi-year contract that has now delivered Mistral over $240 million in combined awards. “This order moves Ondas deeper into the precision-strike market, where demand… continues to accelerate,” Chairman and CEO Eric Brock said. The stock is up more than 775% this year to a $5.26 billion market cap, with trailing revenue up nearly 800% year over year, and Wall Street still rates it a Strong Buy with a $19.06 target.

Unusual Machines (UMAC) took a different route into the same shift, manufacturing NDAA-compliant drone components so American drone makers aren’t dependent on Chinese parts either. Second-quarter revenue hit $16.7 million, up 687% year over year. “We continue to execute our growth plan, and it was reflected in the quarter’s results,” CEO Allan Evans said in the company’s shareholder letter. The stock was added to the Russell 2000 in June. H.C. Wainwright has a Buy rating and a $42 target on it, and shares are already up over 350% this year with a $1.39 billion market cap.

Four different companies, four different pieces of the same puzzle, all riding the same underlying force: a government that has decided it no longer wants its drones, or the parts inside them, coming from a strategic rival. That shift, a funded, multi-year push by the U.S. government to replace Chinese drone technology with American-made alternatives, is not going away, and it hasn’t finished paying out. Between ZenaTech’s expanding DaaS operation and its ZenaDrone push toward Blue UAS certification, Red Cat’s Air Force evaluation, Ondas’ Army and Israeli defense contracts, and Unusual Machines’ NDAA-compliant supply chain, all four now have real exposure to where that spending goes next.

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