The Editorial Board lays out the asymmetry: a single Iranian Shahed-class drone costs roughly $20,000 to build; a Patriot interceptor costs roughly $4 million. The economics favor the attacker by orders of magnitude, and Western air defense doctrine has not yet adapted.
Counter-drone is now its own theme
The investable response is the counter-drone complex: directed-energy systems, low-cost interceptors, drone-on-drone systems, electronic warfare. Public-market exposure runs through AVAV, KTOS, and elements of the Defense primes (RTX, LMT, NOC). We are increasing our position in AVAV and KTOS today as a stand-alone counter-drone sleeve, separate from the broader Defense overweight.
Bottom line: this is the year's clearest new thematic. We are buying.
What This Means For Your Book
ADD AVAV and KTOS to portfolios as the new Counter-Drone sleeve (~3% of Defense). Separate sleeve from major Defense primes.
Asymmetric warfare creates asymmetric capex. Counter-drone is a multi-year build, not a one-quarter trade.
Want to talk through how this affects your plan?
15-minute Q1 review — no pressure, just an update on positioning.
