A drone, also called an unmanned aerial vehicle (UAV), is a broad term that refers to an aircraft that operates autonomously or by remote control with no pilot on board. The technology has evolved over the years to graduate from basic civilian and military operations to highly advanced missions, making drones an indispensable tool in various industries.
We have narrowed our search to three drone-technology-centric bigwigs that provide the hardware and software to operate drones. These three stocks have provided more than 17% returns in the past three months.
The stocks are: Jabil Inc. JBL, HEICO Corp. HEI and L3Harris Technologies Inc. LHX. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks in the past three months.
Image Source: Zacks Investment Research
Zacks Rank #1 Jabil has been benefiting immensely from healthy momentum in capital equipment, AI-powered data center infrastructure, cloud, and digital commerce business verticals. Its focus on end-market and product diversification is a key catalyst. Jabil’s target that “no product or product family should be greater than 5% operating income or cash flows in any fiscal year” is commendable.
JBL’s high free cash flow indicates efficient financial management practices, optimum utilization of assets, and improved operational efficiency. Massive application of generative AI is set to drastically increase the efficiency of JBL’s automated optical inspection machines for the automation industry. A large-scale portfolio of business sectors offers JBL a high degree of resiliency during times of macroeconomic and geopolitical disruption.
Jabil has an expected revenue and earnings growth rate of 5.8% and 17.8%, respectively, for next year (ending August 2026). The Zacks Consensus Estimate for next-year earnings has improved 8.4% over the last 30 days.
Zacks Rank #1 HEICO has been witnessing increased orders for its aftermarket replacement parts and repair and overhaul parts services, backed by rising air travel. With its Flight Support Group unit being a supplier of military aircraft parts, solid U.S. defense funding should bolster order flows for HEI’s defense products.
To this end, it is imperative to mention that a White House report from May 2025 stated that President Trump has requested a 13% increase in the nation’s defense budget to $1.01 trillion for fiscal 2026. Such solid defense funding should usher in strong order flows for HEI’s defense products, thereby boosting its revenue-generation prospects.
