Just been looking at how these drone plays have been moving since the Iran situation last month, and honestly there's some interesting dynamics worth unpacking here.

So when the strikes happened, we saw the typical defense sector rally, but two drone stocks really caught attention - Ondas Holdings and Elbit Systems. Both are up significantly, and the question everyone's asking is whether they're actually worth buying at these levels or if it's just conflict-driven momentum.

Let me start with Ondas. The company developed Optimus, which is the first FAA-certified small drone for automated defense operations. They also handle counter-drone systems, which obviously becomes pretty relevant when you've got active conflict. What caught my eye is their revenue trajectory - they pulled in $10.1M in Q3, which was up 6x from a year prior and 60% sequentially. They're targeting at least $110M for 2026, so if they hit that, we're talking about a massive scale-up. The stock has been absolutely wild, up around 1000% over the past year. Now here's the thing - the company was believed to be involved in the Iran operation, though nothing's confirmed yet. They actually announced a $10M strategic investment in World View (another defense play focused on surveillance) right around the same time. At a $5B market cap, the valuation is definitely stretched, but there's real revenue growth happening here, not just hype.

Then there's Elbit Systems, which is basically the drone backbone of the Israeli Defense Forces - they supply about 85% of their fleet. This is a much larger, more established company with Q3 revenue hitting $1.92B. Growth was modest that quarter at 12%, partly because the Gaza situation had wound down by then. But here's what matters - their order backlog hit $25.2B, which is basically three-plus years of revenue at current run rates. Their Hermes 900 drone is doing surveillance work, and given the new regional tensions, demand for their products is likely to stay elevated. The stock is up over 150% in the past year and trades at a P/E of around 80, which is pricey, but when you factor in the backlog and their position as the primary supplier to the IDF, it's not completely unreasonable.

The real question with both drone stocks is whether you're buying actual growth stories or just riding geopolitical fear. Ondas has explosive revenue growth but is still tiny and unproven at scale. Elbit is established with massive backlog but already priced for perfection. If you're looking at drone stocks as a longer-term play on defense tech and regional instability, both have merit. But timing matters - we're already a month past the initial event, so some of the initial shock premium might be fading. Worth watching how their next earnings reports look, especially Ondas when they report, but neither feels like a screaming bargain right now.