It may not get quite the same hype as hyperscalers and data center infrastructure providers, but there’s little doubt that drone manufacturing has become one of the hottest sectors in the U.S.
Just as it's done with nuclear energy, the Trump administration has also prioritized accelerating drone manufacturing in the U.S., fueled by the president’s executive orders in June that mandated the “unleashing of American drone dominance.”
Unusual Machines (UMAC) surged 39.5%, while Red Cat Holdings (RCAT) jumped 26.4% when U.S. Secretary of War (fka Secretary of Defense) Pete Hegseth declared in July that the administration was going to “bolster the U.S. drone manufacturing base by producing thousands of American-made products.”
And Red Cat shares soared 29.1% again on Thursday after its Black Widow System drone, which was developed by its subsidiary Teal Drones, got added to the NATO Support and Procurement Agency (NSPA) catalogue.
What this means is that NATO member nations can now acquire the Black Widow through NSPA-managed channels.
Red Cat notes that while “the designation facilitates procurement opportunities,” it is up to the end users to decide whether they will purchase the drone through the NSPA – and thereby creating a revenue stream for the company.
But Red Cat said that the inclusion in the catalog “underscores Black Widow’s readiness for allied missions while maintaining the procurement rigor government customers expect.”
A mission-ready small uncrewed aerial system (sUAS), the Black Widow is one of two drones that the U.S. Army selected for its Short Range Reconnaissance (SRR) program.
“Black Widow gives allied forces a rugged, rapidly deployable ISR capability with minimal training burden,”Geoffrey Hitchcock, chief revenue officer at Red Cat, said in a statement. “Being available through NSPA simplifies cross-border acquisition and sustainment, helping customers move from requirement to fielding faster.”
The drone market is growing – but can Red Cat capture its share?
The drone manufacturing sector in the United States is projected to undergo significant growth in the next several years, with data estimating the U.S. commercial drone market growing from $17.34 billion in 2025 to $65.25 billion by 2032.
The competition to capture this market opportunity will also grow, and it remains to be seen whether Red Cat will be able to deliver on production efficiently enough to build out a sustainable growth path.
Back in August, widely-followed short seller Fuzzy Panda raised doubts about Red Cat’s ability to capitalize on the opportunities after speaking to former employees who said that the drones the company makes are encountering a high level of failure rates, with 60% of those produced allegedly failing to initially work.
Former employees also said the company faces substantial testing bottlenecks, with every drone test taking 30 minutes and requiring clear weather. Each drone is also made by hand, leading to slower production timelines.
Fuzzy Panda also pointed to the departure of several key executives that happened in successive months, raising questions about whether it has the leadership in place to scale up its operations.
But while Red Cat’s stock is down 14.4% YTD, it has surged 295.7% over the last 12 months, showing that investors appear to still be bullish on its growth prospects.
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