The Drone Market This Week: The Pentagon Clears Its First Autonomous Border Interceptor, “The Gauntlet” Reaches Phase II, and Ukraine Torches a St. Petersburg Oil Terminal

A week that opened with the Pentagon stamping “approved for military-wide use” on an autonomous counter-drone system tested on the southern border closed with 49 companies cleared into the next round of the Defense Department’s $1 billion drone-buying tournament, a nine-nation counter-drone pact was signed in Paris, and Ukrainian long-range drones lit up an oil terminal in Vladimir Putin’s hometown.

Here are the details:

SkyValor Goes Live: The Pentagon Approves Its First Autonomous Border Interceptor

The headline development came June 7, when the Pentagon’s counter-drone task force announced it had approved SkyValor, a “detect-and-defeat” counter-UAS system built by CACI International (CACI), for use across the entire military.

The clearance followed a two-day live evaluation in mid-May at the Marine Corps Air Station in Yuma, Arizona, where Joint Interagency Task Force 401 ran the system against aerial targets at varying ranges, elevations, and flight paths. SkyValor’s selling point is autonomy: long-range targeting plus 24/7 automated sensing, with minimal human babysitting.

The location matters as much as the hardware. Senior officers have openly called the U.S.-Mexico border a “testbed” for counter-drone tech, and SkyValor now joins a growing stack of systems being pushed to the southern frontier. It also lands a month after the task force handed Perennial Autonomy a $500 million contract (May 19) for the interceptor that’s reportedly downed thousands of Russian one-way attack drones, a reminder that the counter-UAS budget is being spread across multiple bets, fast.

“The Gauntlet” Hits Phase II: 49 Companies, One $1 Billion Prize

Last week we covered Gauntlet’s qualifier opening at Camp Grayling in Michigan. This week the field advanced: 49 companies were invited to compete in the Phase II qualifying event, the next stage of the War Department’s Drone Dominance Program: the $1 billion, two-year effort to buy more than 200,000 low-cost, one-way attack drones. Phase I named 25 vendors competing for $150 million in delivery orders; Phase II widens the funnel.

The strategic logic traces back to the June 2025 “Drone Dominance” executive order, now backed by tens of billions in the FY2027 defense budget and a stated target of 300,000 low-cost attack drones fielded by 2027. For the domestic drone supply chain, the Gauntlet is the single most important procurement event of the year. It’s where the Pentagon decides which American manufacturers get the demand signal they need to kickstart scaled production.

NATO Closes Ranks: A Nine-Nation Counter-Drone Pact in Paris

At Eurosatory 2026 in Paris (the premier global event for defense security technology), Army Secretary Dan Driscoll signed an agreement with NATO allies, the U.K., France, Poland, and six others, to widen allied access to the Army’s UAS Marketplace, the procurement channel for battle-tested counter-drone gear. The deal exports a distinctly 2026 idea: treat counter-drone capability like a shared catalog, so allies can buy proven systems off a common shelf rather than each reinventing the wheel in each market.

It caps a busy stretch for the Army’s unmanned push, which gets its next public airing June 18 at the Potomac Officers Club’s Army Summit, where fielding drones and counter-drones faster is the central theme. On the tactical end, the Air Force used a June 3 training event at Tyndall AFB to show off the low-tech side of the same problem: the M870 shotgun and the AI-assisted SMASH 2000 sight from Israel’s Smart Shooter, which turns a standard M4A1 into a precision anti-drone weapon.

Ukraine Reaches St. Petersburg; Russia Answers With 656 Drones in a Night

The world’s first drone war escalated again. Ukrainian long-range drones flew more than 1,000 kilometers to strike and ignite an oil terminal in St. Petersburg (Putin’s hometown) days ahead of a planned visit, part of Kyiv’s sustained campaign to choke the oil revenue funding Moscow’s war. The same wave of overnight strikes set fire to the Russian guided-missile corvette Boikiy in dry dock at the Kronstadt naval base, the same facility we flagged last week.

Russia’s retaliation underscored the asymmetry of scale: in a single overnight barrage, Moscow launched 73 missiles and 656 drones at Ukraine, with Kyiv the main target, killing at least 22 and wounding more than 130. Ukrainian air defenses intercepted or suppressed 40 missiles and 602 drones, but the volume is the point. Ukraine’s top commander, Oleksandr Syrskyi, warned that Russia intends to push jet-powered drones to 50% of its strike mix: faster, harder to intercept, and a direct challenge to the counter-UAS systems Western contractors are racing to field.

Drone Stocks Making Moves

AeroVironment (AVAV). Announced a $15 million production-capacity expansion near Dayton, Ohio, to boost output of drones and loitering munitions. Analysts carry a consensus “strong buy” with a $301 price target.

Red Cat Holdings (RCAT). Closing its $21 million all-stock acquisition of Quaze Technologies (announced May 20) for a platform-agnostic wireless power system. A bet on keeping its autonomous platforms aloft longer.

Ondas Holdings (ONDS). Shares continued grinding higher on demand for its autonomous drone solutions as investors continue to digest their 605% full-year 2025 revenue growth announced during 1q26 earnings.

Unusual Machines (UMAC). Led the retail-driven rally after being named among companies under consideration for potential Pentagon funding; Q1 2026 revenue up 296% year-over-year with improving profitability.

The wildcard. Reports that the Trump administration is exploring funding deals, and possibly equity stakes, in domestic drone makers (names floated include AVAV, ONDS, UMAC, and Kratos/KTOS) has kept the whole group bid as investors await follow on details. The thesis: Washington wants to lower unit costs and lock in a domestic supply chain, and it may take ownership to do it.

The Bottom Line

Three forces are now compounding at once: the Pentagon is approving and buying counter-drone systems at speed (SkyValor, Perennial, the Gauntlet); allies are standardizing around shared procurement (Eurosatory); and the battlefield keeps proving the thesis in real time (St. Petersburg, Kronstadt, 656 drones over Kyiv in a night). On the commercial side, Part 108 is about to turn drone delivery from a pilot program into a regulated industry. The investable surface area of “drones” has never been wider, spanning attack platforms, interceptors, sensors, and last-mile logistics, which is precisely why a basket approach has gotten more interesting than picking a single airframe.

$DRNZ, the REX Drone ETF, seeks to track the VettaFi Drone Index, providing exposure across the full drone ecosystem: combat, surveillance, logistics, commercial, and counter-drone.