Quick Read
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RCAT leads the drone trio at -20% YTD, while AVAV dropped 42% after the U.S. government canceled a major Space Force contract.
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UMAC surged 72% YTD while the REX Drone ETF fell 9%, proving supply-chain drone plays far outperformed the headline names.
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Red Cat collected $35.7M in the first half but needs $150M for the full year, loading most execution risk into the final months.
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Drone stocks entered 2026 with rising defense demand for autonomous systems, counter-drone protection and domestic supply chains behind them, yet the best-known names in the group have spent the year moving backward. Shares of Red Cat Holdings( NASDAQ:RCAT ), Ondas Inc.( NASDAQ:ONDS ) and AeroVironment( NASDAQ:AVAV ) are all lower on the year, so none of the three is winning. That leaves Red Cat stock on top of the trio only because it has declined the least.
RCAT stock is down 20% year to date (YTD), the smallest decline of the three headline names. Meanwhile, Ondas stock is down 26% YTD. AeroVironment shares are down 42% YTD, the steepest loss of the group.
Beyond those three headline drone stocks, shares of Unusual Machines( NYSEAMERICAN:UMAC ) are up 72% YTD, leaving this drone component maker as the only one of the four drone stocks here trading higher. The REX Drone ETF( NASDAQ:DRNZ ), which serves as a gauge for the wider drone sector, is down 9% YTD. For broad-market context, the SPDR S&P 500 ETF Trust( NYSEARCA:SPY ) is up 13% YTD, so U.S. equities have rewarded investors this year while much of the drone trade has cost them money.
Red Cat Leads by Losing Less
Red Cat reported sales of $35.7 million for the first half of the year and has maintained a full-year revenue target that starts at $150 million. That leaves Red Cat needing to earn the large majority of its target in the second half, the biggest execution requirement of the three headline names.
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Government demand drives much of that business, since the U.S. Army accounted for roughly half of Red Cat's first-half revenue, with customers in Japan and Europe next largest. A concentrated customer list and a steep back-half ramp leave Red Cat stock carrying more delivery risk than its smallest YTD decline implies.
Ondas and AeroVironment Slide Despite Progress
Ondas raised its full-year revenue outlook after stronger quarterly results and reported a pro forma order backlog of $757 million, which includes businesses it acquired during the year. A pro forma total counts acquired companies as if Ondas had owned them all along, so part of that backlog arrived through acquisitions. Even with that order book, Ondas stock is down 26% YTD, leaving the company to prove it can turn its backlog into reported revenue.
AeroVironment reported quarterly revenue of $480.5 million on September 9, ahead of expectations, and maintained its full-year outlook. Earlier in the year, the U.S. government canceled a large contract for AeroVironment antenna systems supporting a Space Force program, a setback that weighed on AeroVironment shares. Those solid recent results haven't repaired the damage yet, with AeroVironment stock still down 42% YTD.
Unusual Machines stock has outperformed shares of Red Cat, Ondas and AeroVironment by a wide margin this year. With a 72% YTD gain, it is also the only one here beating the SPDR S&P 500 ETF Trust, showing that the year's strongest drone returns came from the supply chain feeding the industry.
The REX Drone ETF's 9% YTD decline is smaller than the drops in all three of today's headline drone names, showing how much 2026 drone returns have depended on owning the right corner of the sector.
What to Watch Next
Red Cat's second-half sales pace is the biggest test ahead for the group, since the company has to earn the large majority of its full-year target in the final months of the year. Shareholders can watch for whether Red Cat's deliveries to the U.S. Army and to customers in Japan and Europe keep pace with that goal.
Ondas and AeroVironment face different checkpoints. Traders could look for signs that Ondas is converting its acquired backlog into reported revenue, while AeroVironment has its maintained full-year outlook as a public benchmark to meet.
Anyone reviewing their exposure should calibrate their holdings carefully given that shares of Red Cat, Ondas and AeroVironment all trail both the REX Drone ETF and the SPDR S&P 500 ETF Trust this year. Anyone drawn to the 72% YTD run in Unusual Machines stock may want to keep their stake moderate (we wrote a free guide on sizing speculative positions with rules that keep them from hurting, here), since gains that steep leave room for sharp drops.
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