Elroy Air is a U.S.-based startup that is developing the Chaparral cargo drone, which has eight rotors that lift the aircraft vertically and four others that propel it forward, all powered by batteries.

Dangerous TimesSince we wrote our article “ Top 10 Aerospace and Defense Stocks “, international geopolitics have kept taking a turn for the worse.The Red Sea trade lanes are still mostly closed, the death toll of the conflict in Gaza is increasing, and tensions between Russia and NATO are still rising. Add to that the border conflict between Azerbaijan and Armenia, a possible Israel-Iran war, and mass protests over “foreign influence” in Georgia.“This may be the most dangerous time the world has seen in decades.” – Jamie Dimon, JPMorgan CEOMeanwhile, the trade war with China is escalating, with more sanctions on the Chinese semiconductor industry and quantum computing and 100% tariffs on Chinese cars. The question of a possible invasion of Taiwan at some point in the future remains.Overall, markets have so far ignored these mounting risks, preferring to focus on the AI boom. Some of the leading defense ETFs have barely gone up since 2019, pre-Ukraine war.Unmanned WarfareThe armed conflicts in Israel-Palestine, the Caucasus Mountains, the Red Sea, and Ukraine have demonstrated a very quickly changing method of warfare. Drones, both flying and on tracks, are increasingly taking over the role previously given to traditional weapons like artillery, tanks, missiles, warplanes, etc.The victory might go toward who innovates and disrupts traditional warfare the fastest, with cheap drones and ammunition outperforming on a cost basis more advanced legacy systems.For example, the recent attack by Iranian drones on Israel is estimated to have cost Iran around $50M-$100M. And consumed $1B to $1.5B worth of air defense systems .Therefore, innovative drone makers, or defense companies able to counter drones in a cost-efficient manner might become the new defense giants of tomorrow.And with the rivalry between great powers getting hotter, at the same time that traditional military systems might fail, defense spending will likely rise globally, correcting a trend of decline since the 1990s.We saw during the two years of the war in Ukraine both sides started by using civilian drones, like commercial small quadcopters, to progressively switch to custom design and military platforms.It is almost certain that military leaders all over the world are carefully studying this development

"Leidos is pleased to team with Elroy Air to bring this critical capability to the warfighter," said Tim Freeman, Leidos senior vice president and Airborne Systems business area manager.