Shares of drone maker AEVEX jumped 15% in their opening session on the New York Stock Exchange on Friday, signaling growing investor appetite for defense-related businesses as governments ramp up military spending amid continued geopolitical tensions.

Modern warfare is being reshaped by the rise of unmanned drones, eclipsing conventional weapons in conflicts from Ukraine’s fight against Russia to wars across the Middle East.

Shares of the private equity-backed firm opened at $23.01, higher than the offer price of $20, giving it a valuation of $2.57 billion. Companies like AEVEX are now finding a more receptive audience among institutional investors, who want to hedge against global volatility.

The Solana Beach, Calif.-based company sold 16 million shares to raise $320 million in its U.S. initial public offering on Thursday.

AEVEX offers airborne intelligence, surveillance and reconnaissance to the US government and its allied forces.

The company has two operating segments – Strategic Systems, which manufactures autonomous defense technologies and contributes about 75% of its total revenue, and Global Solutions, which provides aircraft modification and engineering support on manned and unmanned platforms.

AEVEX CEO Roger Wells said in an interview with Reuters that more than $50 billion was requested for unmanned autonomous systems (in the Department of Defense’s FY2027 spending proposal) and that is a perfect fit for the systems and capabilities we provide.

The US government accounted for 78% of AEVEX’s revenue in 2025, and any cuts or delays in US or foreign government budgets could materially affect its revenue.

AEVEX joins the ranks of publicly traded unmanned aerial system makers, including Kratos Defense and Security Solutions and Aeroviroment, as well as competing with private companies such as Enduril Industries and Shield AI.

Wells said the company remains focused on its core defense business and helping customers with new technologies, but will look to selectively expand over time into adjacent markets that offer growth opportunities.