Robots Wouldn’t Make This Mistake

Shares of Northrop Grumman absolutely tanked last week after a major misstep.

The company’s revenue plunged 49% due to higher manufacturing costs for its next-generation stealth bomber, the B-21 Raider.

That’s not the first setback the program has suffered, either.

Last year, Northrop Grumman stock got whacked when the company took a nasty $1.56 billion pre-tax charge related to the B-21 program.

It echoes the infamous cost overruns and delays that plagued Lockheed Martin’s F-35 program.

To be sure, the F-35 did eventually get off the ground and become a major revenue generator for Lockheed Martin.

But it came at a high cost.

Now, obviously, these programs are important.

The F-35 ensures the United States and its allies can rule the skies. And the B-21 will be vital to our national defense as the most lethal precision bomber in the world — one capable of delivering nuclear bombs deep into enemy territory.

However, these programs are also unfathomably expensive — and they always seem to end up being far more expensive than anticipated.

The same can’t be said for drones.

I don’t just mean tiny, hand-held drones or small reconnaissance craft, either.

I mean modern unmanned aircraft that are large enough to carry small groups of soldiers and accompany manned fighter jets into battle.

These are the real war machines of the future.

They come at a fraction of the cost of next-gen bombers and fighters, and now that they’re being augmented with AI, they’re even more lethal.

For example, one major Pentagon initiative aims to deploy robot wingmen — unmanned aircraft that can assist and shield manned aircraft.

With AI, these units can fly autonomously, probing enemy defenses, jamming detection systems, drawing fire, and even deploy their own munitions. And they only cost $25 million–$30 million each.

Compare that with an F-35, which can cost more than $100 million a piece.

Beyond that, an up-and-coming eVTOL (electric vertical takeoff and landing) company just partnered with two cutting-edge tech firms to build a whole new flying machine.

The aircraft are stealthier and more efficient than helicopters. And they can be piloted remotely, so you don’t need an air-trained expert to fly one.

And like the robot wingmen I just described, they could soon be deployed in combat situations, where they can operate autonomously.

In these cases, we have extremely sophisticated and shockingly lethal aircraft — but without the massive price tag and frustrating cost overruns.

That’s why I’ve worked so hard to get the word out. The companies behind these technologies are poised to grow by leaps and bounds in the years ahead.

That’s not to say Northrop Grumman and Lockheed Martin are doing poorly — they’re not.

They, too, stand to gain from a U.S. defense budget that’s racing toward $1 trillion, as well as higher defense spending in Europe and Asia.

Heck, even with the B-21 snafu, Northrop Grumman still posted a profit of $481 million, or $3.32 a share. It’s kind of wild to think that that figure would be twice as high had its bomber program not misfired.

Northrop also maintained its sales outlook for the year, keeping it between $42 billion and $42.5 billion.

So, if anything, I’d say buy the dip on Northrop Grumman — because it will bounce back.

But if you really want to profit, check out my latest report on the military’s most advanced unmanned aircraft.

That will give you all the details you need to really make the most of higher defense spending.