Lance Cpl. Brandon Silden pulled a pair of video goggles over his eyes.

Instantly, the world around him disappeared.

Instead of looking across the training grounds in northern Australia, he was looking through the camera mounted to the nose of a first-person-view (FPV) drone.

Standing beside him, Cpl. Cody Holloway watched the same video feed on a portable monitor.

More than a mile away sat the target: an enemy armored personnel carrier.

Holloway talked Silden onto it.

"A little left."

"Keep coming."

"There."

Silden nudged the controls forward.

The drone accelerated toward the vehicle.

Seconds later, it slammed directly into the target.

"Splash. Direct hit."

The armored vehicle never had a chance.

The exercise took only a few moments.

But it captured something much bigger than a successful training mission.

It showed how quickly warfare is changing.

The Pentagon is currently seeking $55 billion for drones and autonomous warfare in its fiscal 2027 budget.

This is a dramatic 240x increase from the $225 million it spent just a year earlier.

China isn't standing still either.

Last week, President Xi Jinping instructed the People's Liberation Army to accelerate the military application of artificial intelligence and unmanned systems as it works toward building what officials describe as an "intelligent military system."

The world's two largest military powers are independently reaching the same conclusion.

The future of warfare is autonomous.

As investors, we should pay attention.

So… What’s the Best Way to Invest?

There are a few different ways to play this trend.

You can try to pick individual winners by investing in companies at each “layer” in the drone ecosystem.

Layer #1: The companies actually manufacturing the drones like AeroVironment (AVAV), Red Cat Holdings (RCAT), and Kratos Defense (KTOS).

Layer #2: The companies building the software capable of coordinating hundreds of systems simultaneously, sharing information, assigning targets, and adapting in real time. This includes companies like Ondas Holdings (ONDS) and Palantir (PLTR).

Layer #3: The “picks-and-shovels” stocks that make it all possible. This includes Unusual Machines (UMAC), Redwire (RDW), and even SpaceX (SPCX) who owns the Starlink network many of these drones operate on.

Or you can buy an ETF that spreads your money across the broader autonomous warfare ecosystem.

Two that have caught my attention are:

REX Drone ETF (DRNZ)

DRNZ is the purest drone ETF of the three.

Its holdings are concentrated in companies building drones, counter-drone systems, sensors, and other technologies directly tied to unmanned aircraft.

Top holdings include AeroVironment (AVAV), Ondas (ONDS), NextVision Stabilized Systems (NXSN.TA), Unusual Machines (UMAC), and Elsight (ELS.AX).

Defiance Drone and Modern Warfare ETF (JEDI)

JEDI takes a broader approach.

Instead of focusing almost exclusively on drones, it invests across the autonomous defense ecosystem.

That means exposure to drone manufacturers, but also companies involved in artificial intelligence, satellite communications, robotics, defense software, and space infrastructure.

Top holdings include Redwire Corporation (RDW), Unusual Machines (UMAC), Ondas (ONDS), Intuitive Machines (LUNR), and Rocket Lab (RKLB).

Coming Soon: The Future of Warfare

What happened on that training field in Australia explains why billions of dollars are suddenly flowing into this industry.

A weapon that fits inside a backpack gave two Marines the ability to destroy an armored vehicle more than a mile away – without risking a pilot's life or launching a multimillion-dollar missile.

And the investment opportunity extends far beyond the companies building the drones themselves.

It includes the software guiding them, the satellite networks keeping them connected, and the suppliers manufacturing the sensors, cameras, motors, batteries, and other components that make autonomous flight possible.

Whether you invest through individual stocks or a diversified ETF, one thing is clear:

The future of warfare is autonomous.

And the money is starting to follow.