Drone Stock Becomes Hottest IPO As Shares Soar Nearly 1,000%

Swarmer (SWMR), a company that makes software for military drones, has become the hottest IPO stock so far this year.

The company went public Tuesday at an IPO price of $5 per share. It closed at 31 in its first day of trading and jumped as high as 65.04 Wednesday. With shares trading around 53 Thursday, the new issue is up about 950% from its initial offering.

That's by far the best-performing IPO this year, according to data from IBD MarketSurge and IPO analysis firm Renaissance Capital.

The initial pubic offering raised a relatively modest $15 million, and the lesser-known Lucid Capital Markets was the only underwriter. But Swarmer went public at a time when the Iran conflict and the Ukraine-Russia war were showing how drones have revolutionized warfare.

Austin, Texas-based Swarmer doesn't make drones but rather software that coordinates large numbers of low-cost drones to operate as a cohesive system. Its software has been used in the battlefields of Ukraine for nearly two years, where it has completed more than 100,000 combat missions. Data from those missions is fed into machine-learning models to further develop the software.

Swarmer's technology taps into the latest strategies in drone warfare: using large numbers of drones to overwhelm defenses and using artificial intelligence to reduce the number of operators and help guide attacks.

The company says it has operations and teams working in Ukraine, Poland and Estonia. It has 62 employees, Renaissance data shows.

In its prospectus, Swarmer reported a loss in 2024 of ​more than $2 million, and a loss of about $8.5 million last year. It reported revenue of $329,410 and $309,920 for those years.

Swarmer says it has firm sales commitments over the next 12 to 24 months totaling $16.3 million. It expects an additional $16.8 million from unconfirmed deals with some existing customers, according to the prospectus.

​Swarmer's chairman is Erik Prince, the former head of Blackwater, the security firm that gained prominence for its operations in the Iraq War.

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