As Christmas draws nearer, there’s a seemingly never-ending stream of Amazon (NSDQ: AMZN) trucks on my street, delivering everyone’s holiday purchases.

However, if Amazon has its way, in Decembers to come, the e-commerce company’s trucks will be joined by a fleet of flying delivery drones.

It remains to be seen whether autonomous airborne delivery is economically viable on a large scale. But if anyone can pull it off, it’s probably Amazon.

Jeff Bezos unveiled his initial plans for Prime Air service on 60 Minutes back in 2013. After a decade of work, the retail giant’s goal has been to make 10,000 front-porch drone deliveries in California and Texas by the end of the year.

I’m not sure that Amazon will be able to meet that audacious goal.

Still, it’s a start.

Walmart (NYSE: WMT) has already completed 10,000 drone deliveries since 2021 from 36 participating stores across seven states. The mega-retailer’s program offers 20,000-plus eligible items for drone delivery. We’re talking everything from medicines to ice cream to rotisserie chicken.

Partnering with Wing (a division of Google), two new Walmart supercenter locations near Dallas are now dispatching drones that can fly beyond the visual line of sight and serve 60,000 households within a six-mile delivery radius.

With stores and warehouses blanketing 90% of the U.S. population, Walmart and Amazon are uniquely positioned for fulfillment of last-mile deliveries. And with tens of millions of deliveries annually, you can see why they are eager to explore new ways to cut shipping expenses.

A Market Ready for Takeoff

It wasn’t that long ago that drones were meant primarily for backyard remote-control enthusiasts. While they remain popular with hobbyists, commercial use has exploded and continues to grow. There are currently 352,222 commercial drones registered with the FAA. Courier service is just one of many commercial applications.

Here are some of the most notable:

• Broadcasters deploy drone cameras for unique bird ‘ s-eye vantages at sporting events. Hollywood filmmakers rely on them for some of the most pulse-pounding action sequences, including scenes from the James Bond and Star Wars franchises.
• Firefighters use thermal imaging and heat-sensing drones to monitor and help control wildfires without having to send people into harm’s way. They can also aid in urban search and rescue missions and crowd surveillance. More than 900 local first responders are now using them.
• Farmers dispatch drones to identify pest infestations and nutrient deficiencies to optimize crop yields. They can also spray agricultural fertilizers and pesticides.
• Realtors can set high-resolution cameras at any angle to get detailed aerial photographs (and video) of residential and commercial properties for sale.
• Drones outfitted with Light Detection and Ranging (LiDAR) technology are ideally suited to site aerial mapping and surveying. Their information is used for construction, mining, and environmental management projects.

This list is by no means all-inclusive. Drones have become indispensable from law enforcement to civil engineering, to offshore oil and gas production.

That burgeoning demand has turned this former niche into a mainstream $11 billion market. That’s just hardware, not service revenues. According to Insider Intelligence, unit sales will reach 2.4 million globally this year. While forecasts vary, Grandview Research predicts 14% compounded annual growth through 2030. Fortune Business Insights sees a more optimistic 25% growth rate.

The Military Potential for Drones

Over the past five years, the CIA and the Pentagon have conducted drone strikes in Iraq, Afghanistan, Yemen, Syria, and other hostile nations. The military’s preferred nomenclature for these devices is unmanned aerial vehicles (UAVs) or unmanned aircraft systems (UASs). Whatever you call them, these rugged, high-tech instruments serve all kinds of military functions.

Sometimes they are used for surveillance, reconnaissance, target acquisition, and other non-lethal scouting missions. Acting as eyes in the sky, drones can hover over a spot and provide real-time intelligence on enemy troop positions and surrounding terrain quicker and easier than waiting for an overhead satellite to pass. They can also be used to drop off emergency supplies and equipment.

There are three basic types of UAVs: fixed-wing (like a conventional airplane), single-rotor (like a helicopter for vertical takeoffs and landings), and multi-rotor (for maximum control). In any case, they are cheaper to operate and maintain, don’t need runways or fuel, and can engage the enemy without risking lives.

According to the Department of Defense (DOD), there are currently 11,000 UAVs being operated by the four branches of the U.S. military. Many are used for training purposes, with others deployed in combat zones across the globe. They range in size from just a few pounds to the Global Hawk/Triton, which weighs 32,000 pounds (and can cost $18,000 per hour to operate).

Specialized UAVs can carry missiles, guided bombs, and other ordnance controlled by advanced targeting software to take out the smallest of targets with pinpoint accuracy. This 21st-century technology has changed the face of modern warfare and is considered more ethical than old carpet-bombing runs, especially in areas with high civilian populations.

While cost-effective, the world’s military powers still spend colossal sums on drones, approximately $12 billion last year — larger than the commercial market. This has become an increasingly sizeable line item on the annual DoD budget. Outside the U.S., dozens of friendly allied nations such as Turkey and the United Kingdom have built robust UAV capabilities.

This latest evolution of battlefield tactics has been on full display lately as part of Russia’s war on Ukraine. Barely a day goes by without news reports of Russian drones attacking an oil refinery or a power plant. Ukrainian troops outfitted with their own drones supplied by the U.S. have held their ground against superior forces and managed counterstrikes — most recently launching waves of UAVs that hit airports near Moscow and Russian naval ships in the Black Sea.

Meanwhile, the conflict between Israel and Hamas isn’t letting up. Both sides have made drones part of their arsenal and are now girding for the next phase of this ugly fight. The crisis has destabilized the Middle East, putting defense stocks in the spotlight.

Northrop Grumman (NYSE: NOC), a recommendation in my Capital Wealth Letter advisory, has vaulted from $419 to $467 since the initial October 7 attack.

Of course, Northrop isn’t the only exciting tech-focused in the Capital Wealth Letter portfolio.

Our team thinks a select few cryptos are about to go on another monster run — and we just released a bombshell briefing about how you can profit.

Go here for all the details now.