There was a time when not everyone could afford drones. Drones were usually used by the military for invigilation of sorts, while most of the public didn’t even know if these things even existed. The major factor was the cost and laws, and on top of that, the technology. Now with time, drones are accessible to everyone, since their costs have cut down.
Not only this, but laws and regulation regarding usage of drones have also started to loosen up a bit as more and more people are buying them. The most important factor is the recent boom in Artificial Intelligence which has made drones quite useful for people. Their tasks range from industrial inspections and crop monitoring to coverage of events such as concerts as well. The drone industry is also going through a boom and if you were looking to invest in stocks, then you should certainly consider drone stocks as well.
According to Garnter, which is a research firm, there has been a whopping 34 percent increase in market cap for drones amounting to nearly $6 billion. It is expected that growth won’t support, but would only double over the next two years by 2020 from this figure to $11.2 billion. From there on, it would be an immediately fast journey from the drone market, as the market could be as large as $82 billion by the end of 2025, says the Association for Unmanned Vehicle Systems International (AUVSI).
If you want to invest in the drone industry then there are two ways to go about that. You can either invest in drone manufacturers or those companies which produce parts and components for these drone manufacturing companies. AeroVironment and Nvidia are two such companies. You also have the option of opting for those companies which are going to use these drones in their business processes, like Amazon etc.
Below you can find the list of top companies who are currently employed in the drone business or are making use of them somehow or plan to.
|Company||Market Cap||P/E (TTM)||5-Year Estimated Average Annual EPS Growth Rate||1-Year Return||5-Year Return|
From the looks of it, AeroVironment seems to be the best investment though, we will be going over some of these options to help you decide which one to go for.
Intel – Just Broke the record of the highest number of drones in flight.
Intel is perhaps, without doubt, the largest chipmaker for personal computers and most tech related things. They know how important the drone market can be and therefore has played its cards right recently. They made several investments just last year in various drone industries, for example, they bought Yuneec, Volocopter, Airware, Precisionhawk and Ascending Technologies.
They have their own 3D RealSense camera, and by collaborating with these companies, they are soon to advance out. This will help their drones to analyze their environments and then act accordingly. It would be capable of even measuring a person’s blood pressure from mid-air. Not only this, but it shall be on its own lookout too by protecting itself from colliding with another object.
At the current year’s CES they showcased their drones and they even have a “flying car” kind of drone, in which you can sit. Not only this, but they also got to break the Guinness world record too for the most number of unmanned vehicles in mid-air. They showcased this at the Olympics’ Opening Ceremony as well.
Nvidia- The perfect combination of Artificial Intelligence and Hardware
Nvidia is rather known for its GPUs which are currently a lot in demand thanks to cryptocurrency miners. They also have invested in other projects too, such as automated driving vehicles. Not only this, but their eyes are on the drone market as well. Their artificial intelligence mechanism is quite impressive, which they employ in their GPUs for deep learning. In near future, machines themselves could be able to decipher data and provide meaning to them.
Nvidia’s Jetson X2 was one such device, which would rely on deep learning and would be beneficial for drones and other AI-based machines as well. The company has been in this field since 2014, as boasted by its third generation of Jetson. With a faster response time for tasks such as image classification, navigation, and speech recognition, it shall prove quite useful for the drone market. As per the Wallstreet, Nvidia’s stock is to see a growth rate of just 9.5 percent per year for the next 5 years. Though it should be noted, that Nvidia has always surprised us in the past and so can this time.
Amazon – Automatic deliveries to your doorstep courtesy drones.
5 years ago, i.e. in 2013 Amazon announced that they would be providing deliveries to customer’s doorstep which would weigh a maximum of 5 pounds, and would be within 30 minutes or within 10 miles. It was a surprise for everyone as drones weren’t so common at that time, and was seen by people as a joke, but now that very joke seems like reality.
Now not only Amazon but other companies like Alphabet’s Google, Walmart, and JD.com are testing out drone deliveries. Therefore, in much near time, we can officially see Amazon living up to its promise.
According to Madison.com, “Lower delivery costs — which should increase profits — aren’t the only potential benefit. If consumers can receive many of their packages within a half-hour of placing an order, there’s little doubt that more people will be ordering more goods online. So Amazon should see a nice boost to its revenue, as well as to its bottom line.”
With Amazon being one of the few companies to survive the dot-com bubble in the 2000’s, Amazon clearly knows survival as compared to other companies.
Therefore, if it were to us, in investing in one of these three firms, it would surely be Amazon, since Amazon’s stock is expected to grow at a much better rate as compared to other tech industry leaders.