An investment thesis gaining traction across our desk is the "Hemispheric Defense" theme, driven by the urgent need for the Western world—led by the U.S. and Europe—to accelerate weapons production, re-shore critical supply chains, and expand domestic industrial capacity. This initiative is unfolding as the world rapidly stumbles into a bipolar geopolitical order, with the U.S. challenging the BRICS bloc to preserve the global dollar system (remember this from earlier in the week?)
For months, we have outlined the specifics of the Hemispheric Defense investment theme, along with the companies best positioned to profit from new Department of Defense strategies aimed at ensuring America remains the dominant superpower heading into the 2030s:
Golden Dome Unleashes U.S. Hemispheric Defense Theme - And Goldman Finds One Firm Stands Out
Goldman Flags Must-Own Defense Stocks Amid Pentagon's Shifting Priorities
At the start of the year, billionaire investor Marc Andreessen—co-founder of venture capital firm Andreessen Horowitz—underscored the urgent need to re-shore the drone supply chain to the U.S. He emphasized that drones share a common manufacturing ecosystem with other strategic technologies set to dominate the next decade, including chips, AI, EVs, clean tech, and space. Andreessen also issued a stark warning: 90% of drones used by the U.S. military are sourced from China. As he put it, this must change.
In April, Goldman hosted its Private Tech Tour 2025, which prompted us to reexamine eight critical industries—including AI, semiconductors, eVTOL, and photonics—that are poised to define the great powers of the 2030s. The event reinforced the idea of the urgency of re-shoring these supply chains, and in our view, the hard deadline is before the next decade begins if the U.S. intends to remain competitive and wants to preserve the dollar system.
Which brings us to U.S. Defense Secretary Pete Hegseth's Thursday evening announcement outlining sweeping reforms to America's defense complex, centered on achieving "drone domain dominance" by 2027.
That's three years ahead of our projected timeline, underscoring the Trump administration's urgency in expanding domestic small drone production. The move comes just days after we revealed that Russia has already accomplished a similar buildout.
"While our adversaries have produced millions of cheap drones, before us we were mired in bureaucratic red tape," Hegseth said in the video posted on X. "Not anymore."
Hegseth's announcement builds on a June 6 White House executive order about "unleashing American drone dominance."
The executive order read:
"The United States must accelerate the safe commercialization of drone technologies and fully integrate UAS into the National Airspace System. The time has come to accelerate testing and to enable routine drone operations, scale up domestic production, and expand the export of trusted, American-manufactured drone technologies to global markets."
The messaging from Hegseth and June's executive order has translated into tailwinds for defense companies, including drone firms. Among stocks rising in premarket trading: Red Cat +17%, AeroVironment +4%, Kratos Defense & Security Solutions +5%.
Unleashing U.S. Military Drone Dominance @DOGE pic.twitter.com/ueqQPc7rKI
— Secretary of Defense Pete Hegseth (@SecDef) July 10, 2025
"Drones are the future of warfare and America will come from behind to lead the way," Sequoia partner Shaun Maguire worte on X, in response to Hegseth's post.
Maguire is right. Listen to Erik Prince's conversations from earlier this year about the future of warfighting—small drones equipped with shaped charges are beginning to eliminate the need for snipers on the battlefield, at least to some extent. The operational range is shifting from 1,000 yards with a scoped battle rifle to several miles with a drone controller.
The takeaway: Hemispheric Defense them...
