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| By Sean Brodrick |
The world was stunned over the weekend as Ukraine pulled off a scheme that was more daring than anything Hollywood could dream up — and it’s sparking a whole new arms race.
Can you invest in it? Oh yeah! And you’ll want to once you hear the story.
Operation Spider’s Web
On June 1, 18 months of planning and prep came to fruition as Ukraine pushed the “go” button on Operation Spider’s Web.
This special operation blew up 40 Russian aircraft on four different airfields spread across Russia.
The attack reportedly disabled a whopping 34% of Russia’s strategic cruise missile carriers.
And the attacks occurred far inside Russia’s borders, farther than any drone could fly on its own.
So, how did Ukraine pull off this feat?
117 drones were involved in Operation Spider’s Web. To get the drones to their targets, special cargo containers were custom-designed (see photos) to conceal the drones.
The drones were hidden in wooden boxes mounted beneath the container roofs.
The containers were shipped into Russia on trucks.
Then, unwitting Russian drivers were hired to transport the trucks near selected air bases.
Some of those bases were approximately 5,000 kilometers away.
Once in position, the roofs of the cargo containers were remotely opened, releasing a swarm of drones that flew directly toward Russia’s long-range bombers.
After launching, the trailers self-destructed.
Wars of the Future — Today
Iryna Vereshchuk, a top official in Ukrainian President Vladimir Zelensky’s office, said: “This is exactly what wars of the future will look like.”
Taking out 34% of Russia’s strategic cruise missile carriers in one fell swoop is both devastating and amazing.
It’s also something else: A warning to every military in the world that their high-value targets could be next.
So, how do you stop a drone swarm from raining death and destruction down on you? You do it with anti-drone technology.
And that’s where the opportunity is.
Anti-drone technology is better known as Counter-Unmanned Aircraft Systems, or C-UAS.
They can be used to protect vehicles, troops, ships and, yes, bases.
They can involve different combinations of radio frequency jammers, nets, kinetic interceptors, cannons, high-powered microwaves and even high-energy laser beams.
Many of these are AI-assisted. Because nothing takes down a fast-flying drone like an even faster AI system.
Under-Invested in the Next Big Thing
Most of the world’s armed forces are under-invested in C-UAS, especially when measured against the growing threat from drones.
After all, commercial quadcopters can be weaponized for a few hundred dollars. Drones are cheap, numerous and adaptable.
It’s a war of numbers that defenders have so far been losing.
- Attackers can spend less than $10,000 per drone. Meanwhile …
- Defenders may spend more than $100,000 per intercept on missiles or high-end jammers.
Heck, a Patriot missile costs more than $1 million. And Patriots have been used to take out drones.
Clearly, that’s an unsustainable model.
What is sustainable is relatively inexpensive new C-UAS systems that some companies are working on.
The U.S. Army, Air Force, Navy, as well as the militaries of the UK, France, Germany and Israel are all investing in new systems.
And that could send select defense stocks and funds much higher.
You can find some of those companies in the Invesco Aerospace & Defense ETF (PPA).
It has a Weiss Rating of “B-,” a dividend yield of 0.52% and an expense ratio of 0.57%.
You can see how PPA ramped up for most of last year, spent about six months consolidating and is now breaking out again.
I’d say these Ukrainian drone attacks — and the potential they show for future carnage — will put some wind beneath the wings of PPA and the stocks in it.
The world is becoming increasingly more dangerous over time.
New robotic horrors are being spawned every month.
There are several companies that are leveraged to this megatrend …
And smart investors can make a tidy profit from them.
All the best,
Sean
P.S. My Wealth Megatrends readers were in on this trend even before Operation Spider’s Web went “go.” They are already up double digits on a different defense ETF.
And right now, I’m considering a specific company to add more firepower to this trend.
Of course, this is only one of the Megatrends I have readers ready for. You can read about another here … and join my readers and ride all of them to profits.
