In the current market environment, names tied to artificial intelligence (AI) like Nvidia and Palantir might reign supreme when considering outsized alpha generators. However, one name they might not be familiar with is Ondas Holdings (ONDS).
Up well over 200% for the year, Ondas Holdings is certainly a name investors need to know. It’s also the top holding in the REX Drone ETF (DRNZ). DRNZ is another name worth keeping in the memory bank when considering ETF opportunities in this unique industry with exponential growth potential.
Strong Earnings and Outlook
Ondas, a leading manufacturer of drone systems for various applications, is coming off a strong third quarter earnings report last month. The company reported record quarterly revenue of $10.1 million. That represents a 6x increase year-over-year and a 60% increase from the previous quarter.
“Ondas delivered a record quarter with $10.1 million in revenue, highlighted by sustained growth momentum at OAS amid a powerful demand cycle for our unmanned platforms,” said Eric Brock, chairman and CEO of Ondas Holdings.
The firm continues to secure key contracts while also making strategic investments to bolster its operations. This includes the creation of Ondas Capital, which serves as a separate business unit focused on increasing the global deployment of drone systems to Allied defense and security markets.
“The establishment of Ondas Capital and our expanding partnerships in Europe and Ukraine further strengthen our strategic footprint,” Brock said. “We believe these initiatives, together with our investment in and partnership with Rift Dynamics, will advance our localization efforts across Europe and ensure Ondas is positioned to grow in these large and strategically important markets.”
As mentioned, Ondas Holdings occupies the top spot in the holdings of DRNZ. It has about a 15% allocation as of December 10. For investors looking to add additional caffeine to their cup of growth, DRNZ is worthy of consideration as a viable pure-play ETF option for the drone industry.
A Growth Amplifier
Because DRNZ is essentially a thematic ETF, it should occupy a satellite position in an investor’s portfolio. It can also serve as a complementary growth amplifier. The fund can situate itself alongside investors’ large-cap tech growth names vis-a-vis the Magnificent Seven.
The drones industry may be niche and nuanced, but there’s no denying the growth trajectory. Grand View Research, for example, estimates that the size of the global drone market could reach well over $160 billion by the year 2030.
In modern warfare, drones have been a mainstay in military applications. However, their usage proliferates in commercial applications as well. Fortune Business Insights projects that the commercial drone market alone could reach $65 billion by the year 2032, which is a sub-market that benefits the focus of DRNZ.
To achieve DRNZ’s investment objectives, exposure to the drone industry comes by way of tracking the VettaFi Drone Index. The index provides global exposure by adding constituents that utilize drones and unmanned aerial vehicles (UAVs) in military reconnaissance. It also includes companies focused on commercial delivery, agriculture, infrastructure inspection, and AI-enabled industrial automation.
Investors looking to learn more about the fund can visit the product website here.
Also, a webinar, “How to Find Pure Play Approaches to Drone Technology,” will take place on January 16, 2026. It will delve further into the industry and showcase how DRNZ is poised to capture the drone market’s growth.
For more news, information, and strategy, visit ETF Trends.
vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for DRNZ, for which it receives an index licensing fee. However, DRNZ is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of DRNZ.
