This Technology Is Dominating the Ukraine War

As the besieged residents of Kyiv tried to find some peace of mind and quiet, sleeping in their beds this past Tuesday night, 21 Russian drones flew toward the city.

Ukrainian forces shot down 16, but five got through, damaging power stations, communications towers, and even a school. 

Worst of all, at least four people were killed and 20 injured. 

This is the nature of modern warfare. 

It’s not machine guns and trenches. It’s not tank formations working to outflank each other. It’s not even fighter jets screaming overhead with devastating payloads. 

All of those things still exist, of course. They’ve been a part of this war.

But overwhelmingly, it’s been the drones that have dominated the battlefield.

Whether it’s conducting reconnaissance, blowing up infrastructure, or eradicating enemy forces…

Drones have been front and center. 

Cole Rosentreter, CEO of Canadian drone maker Pegasus, recently made a really good point in The New York Times:

We’ve returned to warfare at industrial scale; both sides are treating drones the same as artillery shells now, because whoever has the logistical base to outproduce the other has a clear advantage on the battlefield.

See, that’s where we’re at. In addition to being a battle of human attrition, this war has become a test of each side’s industrial base — its ability to manufacture and supply its troops.

And in that capacity, drones are being acquired on the same scale as ammunition. 

That demand says a lot about their utility, efficacy, and expendability.

Russia can afford to send 20 drones and have 80% of them get shot down, because the five that make it through are enough to be disruptive.

That, and because the ones that are neutralized are easily replaced.

Without a doubt, drones like the MQ-9 Reaper that Russia knocked out of the sky last week or the companion craft that are being designed to complement our fighter groups can be extremely sophisticated...

But most are relatively simple and cheap to produce. 

Of course, Russia’s industrial base is so hollow and its access to technology so limited that producing even cheap drones is a monumental task. 

So it's had to outsource the job to China. 

China has shipped more than $12 million worth of drones to Russia since it invaded Ukraine. 

The biggest supplier is a company called DJI, which is based in Shenzhen. It’s been blacklisted by the U.S. Department of Commerce since 2020, but that hasn’t stopped it from delivering quadcopters to the front lines. The company is responsible for half of all Chinese drone shipments to Russia.

Other drone manufacturers are proliferating as well.

There are roughly 70 Chinese exporters selling drones to Russia. 

Iran is another big supplier. 

Iran has supplied Russia with more than 1,700 drones capable of suicide bombings as well as surveillance and intelligence gathering. 

And earlier this year, the two countries established plans to produce some 6,000 Iranian drones at a new facility in Russia. 

Meanwhile, Ukraine has its own drones, and it’s been able to count on the United States for additional support.

The last U.S. aid package, which went out in February, included $2 billion worth of drones and ammunition. 

In fact, a company I recently recommended in my Secret Stock Files investment service was a big beneficiary of that package, netting two separate orders. 

One of its drones has a range of 25 miles, which lets it fly behind enemy lines to find and neutralize Russian troops and weapons, including artillery and main battle tanks.

Another is a fixed-wing aircraft with helicopter blades, which means it can take off and land vertically like a helicopter but fly like a plane. 

It has a maximum range of 115 miles and can remain aloft for at least 14 hours, so it’s perfectly suited for reconnaissance missions, but it’s also demonstrated an ability to deploy munitions, like a miniature precision glide bomb.

You can bet weapons like these are going to garner a lot of attention from America’s domestic defense budget too. 

I’m not sure if you saw it, but the Biden administration just released its fiscal-year 2024 budget proposal last week.  

It requested $886.4 billion for national security spending, with $842 billion going to the Department of Defense.

That’s a sizable increase as is, but remember, that figure is just a starting point.

For perspective, President Biden proposed $813 billion in national security spending last spring, and we ended up with a final figure of $858 billion. 

So when all is said and done, the FY2024 budget will almost certainly exceed $900 billion.

But like I said, if you really want to make the most of that as an investor, you should check out Secret Stock Files, where I go in-depth on all kinds of military technology, including drones.

You can find out more about that here.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is an Editor of Wealth Daily and Investment Director of Secret Stock Files, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

Want to hear more from Jason? Sign up to receive emails directly from him ranging from market commentaries to opportunities that he has his eye on. 

*Follow Angel Publishing on Facebook and Twitter.