New Jersey, famous for emphasizing a GTL lifestyle and forcing a local congressman to pretend to listen to Springsteen on repeat, now has one more claim to fame: mysterious drones.

Sightings of unidentified aircraft over the Garden State have increased dramatically in recent weeks, prompting many to speculate that aliens might be visiting, before speculating further about why anyone from outer space would visit New Jersey of all places.

But drones aren’t just making waves on niche extraterrestrial internet forums—they’re also one of the hottest new investments on the market.

Drones stocks keep flying higher

Shares of Red Cat Holdings skyrocketed 26.97% today on the news that the drone manufacturer has partnered with Wall Street cybersecurity darling Palantir to equip its drones with Palantir software. The little-known drone company has become big news on Reddit's infamous r/WallStreetBets board, where it’s quickly caught the attention of retail traders, who have helped push shares up over 1,129% in 2024.

But Red Cat isn’t the only hot drone stock on the market. Unusual Machines popped nearly 250% in just two days back in late November on the news that Donald Trump Jr. was joining the drone company’s advisory board. Shares of Unusual Machines are up 332% in 2024.

The sky’s the limit

Drone stocks are capitalizing on several market trends at the moment. Geopolitical tensions have made defense stocks a hot commodity these days, and some analysts believe that the second Trump administration will mean increased spending on US-made drones. Elon Musk has made his position on military spending clear via posts on X, and the incoming administration’s potential focus on drones will only benefit drone makers.

Drone companies are also usually young, and therefore haven’t had enough time on public markets for share prices to rise too far. That makes them prime targets for retail traders looking to get more bang for their buck than by buying shares of more established defense contractors.

And, of course, let’s not forget all the recent drone sightings. Any publicity is good publicity, and with drones solidly stuck in the public imagination, it’s no wonder that the companies building them are having a moment.—MR

🟢 What’s up

• Honeywell popped 3.68% on reports that the conglomerate may spin off its aerospace unit to appease activist investor Elliott Investment Management.
• Tesla rose 6.14% to a new all-time high after Wedbush Securities analysts raised their price target from $400 all the way to $515 on hopes that a second Trump administration will benefit the automaker.
• Broadcom climbed another 11.21% following its blockbuster earnings report late last week as investors hop aboard the latest semiconductor bandwagon.
• The Nasdaq 100 is adding Palantir Technologies, MicroStrategy, and Axon Enterprise next week. Palantir actually fell 0.42% and MicroStrategy lost 0.04%, but Axon gained 0.68%.

What’s down

• The Nasdaq 100 dropped Moderna, Illumina, and Super Micro Computer from the index to make room for the new stocks above. Moderna actually rose 0.02%, and Illumina gained 0.37%, but Super Micro Computer took a beating after announcing it has asked Evercore to help it raise capital. Shares sank 8.26%
• Here’s something you don’t see every day: Nvidia entered correction territory after shares fell 1.68% today, capping off a 10% slump since its record close in early November.
• Ford Motor Co. shed 3.85% after Jefferies analysts downgraded the automaker from “hold” to “underperform.” They believe the company will continue to struggle next year thanks in part to problems in Europe and severe inventory overhang.
• Healthcare stocks were put on notice today after Donald Trump told reporters he plans to “knock out” industry middlemen. CVS Health Corp. fell 5.61%, UnitedHealth Group sank 4.24%, and Cigna Group dropped 3.05%.

You don’t see a 56% gain in a month and a half very often, but it feels almost par for the course in the bizzaro world of bitcoin.

Bitcoin’s rally has reached new heights after the crypto king wrapped up its seventh straight week of gains on Sunday, its longest streak of wins since 2021. To celebrate, bitcoin broke above $107,000 for the first time ever earlier today in the latest sign that the bulls are winning the battle against the bears.

The bitcoin boom

The cryptocurrency has risen dramatically since the presidential election in early November on the hopes that a second Trump administration will prove to be a friendly one for crypto traders. So far, all signs point to a bright future for bitcoin, with crypto fan Paul Atkins on deck to become the new head of the SEC.

This latest surge was sparked by Donald Trump's comments in a CNBC interview this weekend that the president-elect seems intent on fulfilling his campaign promise of establishing a bitcoin strategic reserve. Acting much like the US’s strategic petroleum reserve, Trump vowed that, “We’re going to do something great with crypto.”

But if you don’t feel like shelling out $107,000 for the world’s leading cryptocurrency, don’t worry—you've got some other investment options.

The bitcoin bonanza

MicroStrategy has become the de facto stock of choice for anyone interested in bitcoin, a role that founder and chairman Michael Saylor seems to relish—he compared investing in bitcoin today to investing in Manhattan 300 years ago on CNBC earlier this afternoon.

Shares of Saylor’s company rose today on news of its inclusion in the Nasdaq 100 beginning next Monday, which means funds that track the index will be able to buy the stock. That means more money for MicroStrategy to purchase more bitcoin to add to the $1.5 billion it spent on the cryptocurrency just last week, which brought its total bitcoin hoard to about $46 billion.

The bitcoin beneficiaries

If you want to invest in the recent crypto craze but don’t feel like putting all your money on bitcoin (or on a company that also puts all its money on bitcoin), you do have some other options.

Bitcoin’s rally has kicked off a wave of crypto enthusiasm among investors, which has in turn propelled memecoins like the venerable fartcoin to new heights. Companies like Robinhood Markets and Coinbase Global that allow investors to put their money on crypto are the obvious winners from this trend. Robinhood shares are up over 74% since the presidential election, while Coinbase has climbed nearly 64%, and both have favorable analyst ratings heading into 2025.

It’s a brave new era for crypto, and while the FOMO is very real, keep in mind that the pros still recommend only allotting a small percentage of your portfolio to bitcoin.—MR

• Hail to the Chief: Softbank CEO Masayoshi Son is the latest head honcho to bend the knee to President-elect Donald Trump.
• Cruise line stocks are ready to set sail for a fantastic 2025.
• The Chinese economy continues to struggle, with Chinese retail sales coming in well below expectations.
• The US manufacturing industry isn’t looking so hot either: Factory output just dropped to its lowest level in 4-1/2 years.
• France’s new prime minister is having a tough week after Moody’s downgraded the country’s credit rating.
• 7 great books to help you become a better investor in 2025.

Analysts are putting up their OOO messages and focusing on surviving the company holiday party, so there are no major earnings reports to watch tomorrow.

As for economic data, we do get a few breadcrumbs here and there. US retail sales will give us some insight into how the holiday shopping season is going so far, while the homebuilder confidence index should tell us more about what to expect for the housing market in 2025.

But all eyes are really turning toward the Federal Reserve. The central bank’s final meeting of 2024 begins tomorrow and culminates with a decision on Wednesday about whether or not to cut interest rates. Expect every talking head on your TV screen to be honing in on any clues they can find about the Federal Open Market Committee’s plans tomorrow.