Drone Stocks Fell Through a Summer of Bullish Policy, and No Drone ETF Is Above Its 200-Day Yet

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Drone Stocks Fell Through a Summer of Bullish Policy, and No Drone ETF Is Above Its 200-Day Yet

10 tickers referenced · published Sep 30, 2026

Article published Sep 30, 2026. Prices below use latest available snapshots.

DRNZ $16.84 -16.8% 30d JEDI $20.44 -18.9% 30d SHLD $61.48 -1.9% 30d ITA $209.07 -2.9% 30d AVAV $121.79 -22.1% 30d KTOS $40.42 -15.1% 30d RCAT $4.72 -33.5% 30d ONDS $6.04 -16.1% 30d AVEX $15.36 -5.0% 30d UMAC $16.31 -25.9% 30d

As of the settled close on Tuesday, September 29, 2026.

The drone trade is not about to take off. It is still coming down, and the policy tailwind has already been spent without lifting it. AeroVironment is down 53.6% on the year and 29.4% under its 200-day average. Kratos is down 51.12% and 38% under its 200-day, and Red Cat is down 36.52% and 41.2% under. All three sit about 65–68% below their 52-week highs. That is a broken long trend in each name, not a pullback. Over the same year the S&P 500 fund rose 15.15% and sits 6.2% above its 200-day. The drone group fell 1.2% at the median on September 29, with 3 of 20 names up, and it has lagged over 30 days (the September 29 market brief). Only four members beat the index over the year: nLIGHT, Elbit, Unusual Machines and Planet. Only three trade above their 200-day: Unusual Machines, Motorola Solutions and Draganfly.

No drone ETF is investable on trend yet. The REX Drone ETF ($DRNZ), the one pure play, is 16.3% under its 200-day and 33.33% off its high, down 3.92% on the week. It is too young for a one-year return, and it has held a floor since July: its lowest point was $19.29 on July 29, and September's lows stopped near $19.93. The Defiance drone fund ($JEDI) is down 2.06% on the year and 9.4% under its 200-day. Global X Defense Tech ($SHLD) is down 12.4% on the year and 11.2% under its 200-day. iShares Aerospace & Defense ($ITA) is up 1.88% on the year, 13.27 points behind the S&P 500, and 9.2% under its 200-day.

What has to happen first: the pure play reclaims its line. The trigger is a close in DRNZ above its 200-day (about $24.00 on September 29) and its $25.32 most-traded price, followed by a flag that holds. A close below the $19.29 July low would break the base and void the watch. On the evidence, the company-level proof is AeroVironment's next report, a provider estimate for December 2. It will show whether a $1.46 billion funded backlog turns into margin faster than the share count grows. Until both happen, this is a watch.

Which ETF, when it turns. DRNZ is the drone exposure. SHLD is the core-sized vehicle but mostly large-cap defense. ITA is a primes fund with little drone content. JEDI fails the no-lotteries test. The detail and the caveat for each are below.

The Evidence

The news was bullish and the stocks went down anyway. CNBC reported on August 14 that drone stocks rallied after the White House ordered tariffs on foreign-made components. Unusual Machines rose 25.04% that day (the August 14 Unusual Machines dive). On September 3 Semafor reported a 100% tariff on drones, noting DJI alone holds more than 70% of the global market. By September 8 REX Shares, which sponsors DRNZ, described "a tariff trade that went sideways." REX also tallied $1.3 billion of Pentagon drone money in two days in early August. The funding is real, but the group kept falling. AeroVironment closed at $192.81 on August 14 after a 36.53% thirty-day pop (the August 14 AeroVironment dive). It closed at $143.24 on September 29, so the August bounce failed. The desk's record fits this pattern: washout buys have lost, and the pattern that works is bottom, then pop, then flag, then breakout.

The order book improved; conversion into profit has not. AeroVironment's 10-Q for the quarter ended August 1 shows funded backlog of $1,457.8 million, up from $1,183.0 million at April 30. Its Autonomous Systems segment grew revenue 21%. Switchblade revenue fell $56.9 million on order delays, total segment adjusted EBITDA slipped to $53.4 million from $56.6 million, and diluted shares rose to 49.82 million from 46.88 million. GAAP operating loss narrowed to $10.9 million from $69.3 million, mostly on lower amortization and acquisition costs (the September 10 10-Q, summarized on the desk's drone-defense campaign). That is half the case: orders are proven, profitable deliveries are not.

The equity-stake story is legally contested. U.S. News reports that JEDI rallied 12% on the single day the Pentagon drone equity news broke. Semafor reported on September 21 that a White House legal opinion supplied the rationale for government stakes in more than a half-dozen companies. On September 3 Semafor had reported that Congress told the Pentagon's Office of Strategic Capital it lacks authority to take equity stakes in private companies. A one-day ETF spike on a contested policy is not a trend.

Sorting the lane by horizon:

  • Broken (down on the year and behind the index): AeroVironment, Kratos, Red Cat, Axon (down 41.4%, 15.9% under its 200-day), Ondas (down 4.96%, 20.9% under), Amprius and Northrop Grumman. Kratos is still up 84.76% over two years and Ondas 871.43%. Those are round trips, not young trends.
  • Long trend under test: Elbit is up 41.28% on the year but 8.8% under its 200-day. nLIGHT is up 33.92% but 32.5% under. RTX is up 14.25% with a golden cross in place, only 4% under its 200-day and RSI 26.3. RTX is the prime closest to repair.
  • The one intact trend is vetoed on business quality. Unusual Machines is up 80.72% on the year and 35.1% above its 200-day. Its June-quarter operating loss widened to −$7.8 million on eight times the revenue, and its two profitable quarters were investment marks (the August 14 dive). That is pre-profit, so it fails the no-lotteries rule. Draganfly rose 10.71% on September 29 and 38.7% over 30 days while still down 10.79% on the year. The cause is unknown: news pulled September 30 returned quote pages only, stock-events were checked, and a September 28 6-K is on file unreviewed. Tessera ($HLSQ) is down 99.57% on the year, a business-quality veto.
  • Too young to grade: AEVEX ($AVEX) listed in April, is 64.12% off its high and has no 200-day.

The September 29 slide has no dated cause: news for most of these names was last pulled September 24–26, so it was not pulled for this move.

Settled closes. Price in dollars; returns and distances in percent; "1Y vs S&P" in percentage points.

Ticker Name Price 7D 30D 1Y 1Y vs S&P vs 200-day Off 52-wk high As of Read
Drone ETFs & benchmark
$DRNZ REX Drone ETF 19.83 -3.6 -6.06 n/a n/a -17.4 -34.16 2026-09-30 Pure play; under the 200-day
$JEDI Defiance Drone & Modern Warfare 25.09 -3.43 -4.64 -3.98 -18.46 -9.9 -41.64 2026-09-30 Small-cap heavy; down on the year
$SHLD Global X Defense Tech 60.08 -3.56 -8.25 -14.46 -28.94 -11.7 -23.46 2026-09-30 Large-cap ballast; under the 200-day
$ITA iShares Aerospace & Defense 207.18 -3.15 -9.27 -0.99 -15.47 -10.1 -19.26 2026-09-30 Primes; flat year
$SPY S&P 500 fund 762.63 -0.67 -0.58 14.48 0 6 -2.15 2026-09-30 Benchmark
Drone makers
$AVAV AeroVironment 142.22 -8.8 -4.13 -54.84 -69.31 -29.7 -65.96 2026-09-30 Broken; August pop failed
$KTOS Kratos 42.69 -7.52 -16.26 -53.28 -67.76 -38.4 -68.14 2026-09-30 Broken; two-year round trip
$RCAT Red Cat 6.46 -1.97 -24.8 -37.58 -52.06 -41.1 -65.6 2026-09-30 Broken
$ONDS Ondas 7.33 -0.95 -4.31 -5.05 -19.53 -22.5 -52.03 2026-09-30 Down on the year; buying fuze makers
$AVEX AEVEX 15.14 -7.91 -13.98 n/a n/a n/a -64.24 2026-09-30 April listing; too young
$UMAC Unusual Machines 24.48 7.89 3.42 62.12 47.64 32.1 -29.92 2026-09-30 Intact trend; pre-profit veto
Counter-drone, sensors & power
$AXON Axon 422.52 -6.23 -25.42 -41.12 -55.6 -15.2 -44.7 2026-09-30 Broken
$LASR nLIGHT 38.95 -4.95 -7.85 31.45 16.98 -32.6 -55.2 2026-09-30 Long trend under test
$TDY Teledyne 606.81 -2.29 -1 3.54 -10.93 -2.5 -13.02 2026-09-30 Just under the 200-day
$AMPX Amprius 9.68 -0.51 -2.02 -7.98 -22.46 -28.1 -60.05 2026-09-30 Broken
Primes
$ESLT Elbit Systems 682.01 -8.15 -2.64 33.78 19.3 -11.6 -32.88 2026-09-30 Long trend under test
$RTX RTX 185.65 -3.4 -10.63 10.95 -3.53 -4.7 -18.17 2026-09-30 Closest to repair
$LMT Lockheed Martin 509.25 -2.94 -9.26 2.01 -12.47 -9.5 -26.41 2026-09-30 Flat year, behind the index
$NOC Northrop Grumman 483.48 -6.01 -10.42 -20.65 -35.13 -19.3 -37.53 2026-09-30 Broken

Picking the ETF

DRNZ is the real drone exposure, and it carries the losers. Per U.S. News (July 28), it is the first U.S. pure-play drone ETF. It tracks the VettaFi Drone Index at a 0.65% expense ratio with about $113.2 million in assets, and it holds AeroVironment, Red Cat and Kratos, three of the broken charts above. It has about 230 sessions of history and traded about $2.5 million on September 29. That is enough for a satellite position, thin for a core. When the lane turns, this fund turns first and hardest.

SHLD is the core-sized vehicle, but it is a defense fund with a drone sleeve. Per U.S. News, it has about $7.1 billion in assets at 0.50%. It is 87% large-cap industrials (RTX, General Dynamics, Lockheed), with AeroVironment, Kratos, DroneShield and Red Cat as the drone tail. It traded about $78.6 million on September 29 and is up 62.37% over two years. It is also down 12.4% over one year, a weaker year than ITA's; no dated cause is on file. Owning it is mostly a bet on primes. Its line to watch is the 200-day, about $68.09.

ITA is the primes fund, not a drone fund. It is up 1.88% on the year and 9.2% under its 200-day, with RSI 26.2. It is fine as defense ballast, but it gives almost no drone exposure.

JEDI fails the no-lotteries test. U.S. News describes it as small-cap and pre-profit heavy (0.69%, about $138.4 million, launched September 2025). It traded about $1.6 million on September 29. Its 12% one-day spike on policy news shows the risk. BZZ, with about $2.8 million in assets per U.S. News, is too small to use.

What to Watch

  • DRNZ above about $24.00 (the 200-day) and $25.32, then a flag. That starts the trade. A close under the $19.29 July low breaks the base; after an entry, a close back under the 200-day ends it.
  • SHLD above its 200-day (about $68.09) would be the large-cap confirmation. ITA above about $230.48 would say the primes have repaired.
  • Scheduled reports (provider estimates): Kratos and Axon November 3. Red Cat, Unusual Machines, Amprius and nLIGHT November 5. Ondas and AEVEX November 12. AeroVironment December 2. That report is the two-report dilution test on funded backlog versus $1,457.8 million.
  • Pentagon equity authority. Any ruling or statute that settles the stake question is the policy catalyst the tape has not yet priced as durable.

Desk Call

Ticker Stance Entry Invalidation Review by
$DRNZ Watch Close above both the 200-day (about $24.00 on 2026-09-29) and the $25.32 most-traded price, then a flag that holds above them A close below the $19.29 July 29 low, which breaks the base; after an entry, a close back under the 200-day 2026-12-11

Sources