Are Those UAPs Secret Navy Robots?

The Pentagon Calls Them UAPs…

Last week, we followed the evolution of warfare from drones in the sky to robots on the ground.

Today, we're going underwater.

You've probably seen the videos.

Mysterious objects hovering over the ocean. Strange craft emerging from beneath the waves.

The Pentagon calls them UAPs.

But what if some of these mysterious machines weren't built by aliens?

What if they were built by the U.S. Navy?

Autonomous underwater robots that navigate without GPS, patrol for weeks, and carry out missions without a single sailor aboard.

It sounds like science fiction, but navies already use machines like this.

To see how quickly this technology is changing warfare, let's start with a country that barely has a navy.

Ukraine

For years, Russia's Black Sea Fleet looked like an overwhelming advantage. Warships, submarines, missiles.

The kind of naval power that takes decades and billions of dollars to build.

Ukraine answered with something much smaller.

Uncrewed boats packed with cameras, communications equipment, and explosives.

In March 2024, Ukraine said its MAGURA sea drones struck the Russian patrol ship Sergey Kotov near Crimea.

Russia's fleet increasingly had to contend with threats from small vessels without sailors aboard.

Then, last December, Ukraine claimed a new first: an underwater drone attacking a Russian submarine in port.

Reuters verified footage of an explosion, but Russia denied its submarine had been damaged. Even with that important qualification, the technological direction is hard to miss.

First, the pilot left the cockpit. Then, soldiers began sending robots ahead of them.

Now, sailors may be leaving some of the most dangerous naval missions to machines.

The Oceans Aren't Empty

Remember the Pentagon strategy document I discussed in Part I?

America has two enormous oceans protecting it from a conventional land invasion.

But oceans aren't empty buffers.

They're full of cargo ships, submarines, fiber-optic cables, energy infrastructure, and naval forces that protect global trade.

And without maritime shipping, the global economy can break down.

Consider the flashpoints…

In the Black Sea, naval drones threaten warships and shipping.

In the Pacific, a conflict around Taiwan would involve some of the world's most contested sea lanes.

In the Persian Gulf and Red Sea, attacks on shipping have demonstrated how quickly a regional fight can disrupt international commerce.

Meanwhile, NATO nations must worry about undersea cables, mines, and hostile submarines.

Countries could decide to build a few more destroyers and crewed submarines to monitor all of that…

Or they could decide to send thousands of smaller, cheaper machines into dangerous areas and let human crews operate farther away.

Increasingly, navies are considering both.

But there's a catch.

The Hardest Environment to Build a Self-Driving Robot

A drone in the air can receive GPS signals and often communicate by radio.

Underwater, those signals don't travel the same way.

GPS doesn't penetrate seawater, and ordinary radio communications are severely limited.

Cameras have problems, too. Light doesn't travel far in murky or deep water.

So underwater robots often depend on sonar and use sound to detect objects, map the seafloor, and locate hazards.

They also need sophisticated navigation, onboard decision-making, reliable batteries, and ways to communicate without constantly surfacing so…

Underwater Robots Must Learn to See

These drones are a different technical challenge in an unforgiving marine environment.

A robot must navigate a world it can barely see, with little or no contact with its operator, and return with useful information.

It's an ideal problem for sensors and cutting-edge autonomy software.

And it's an interesting market for companies that own the underlying technology.

According to The Business Research Company, the global military unmanned underwater vehicle market is an estimated $4.62 billion in 2026…

And will rise to $6.23 billion by 2030 (7.8% annual growth).

And that's just below the surface.

Fortune Business Insights estimates the broader unmanned surface vehicle market at $2.5 billion this year, reaching $3.55 billion by 2034, or 4.5% annual growth.

That second figure does include civilian uses, so don't treat both forecasts as a single military market.

The real opportunity is in repeatable military purchases, exports to allies, and the parts and software each new vehicle requires.

And this September, the U.S. Navy provided clearer evidence of demand…

Thirty Drone Ships

On September 29, the Navy announced agreements to procure 30 medium unmanned surface vessels.

Three companies were selected to build ten each, at an average procurement cost of about $40 million per vessel.

That's roughly $1.2 billion of planned procurement across the program.

The first deliveries are scheduled before the end of fiscal 2027.

This is what I like to see as an investor: a customer moving toward actual production.

And one of the selected companies trades on the New York Stock Exchange.

Three Maritime Stocks I'm Watching

Huntington Ingalls Industries (HII): The Navy's Robot-Ship Builder

HII is best known for building aircraft carriers and nuclear submarines.

But it also develops uncrewed vessels.

The Navy selected its ROMULUS surface-drone platform for ten of those new vessels.

And HII has a second business beneath the waves: REMUS autonomous underwater vehicles used for missions such as surveying, reconnaissance, and mine detection.

In June, HII delivered its first new REMUS 130 to a U.S. ally.

It also won a contract to develop technology for launching and recovering REMUS drones through a submarine's torpedo tube.

So, existing submarines may soon be able to send out smaller autonomous scouts without exposing their crews.

HII reported $3.4 billion in second-quarter revenue, up 10.9%, with $57.3 billion in total backlog.

Management raised its 2026 shipbuilding revenue outlook to $10.2 billion to $10.4 billion.

What I'm watching: whether these first ten ROMULUS vessels lead to follow-on orders, and whether REMUS finds more customers among allied navies.

The risk? HII is a very large, complex shipbuilder.

Naval robotics is still a small part of the business, and traditional shipbuilding execution matters far more to near-term earnings.

L3Harris (LHX): Drones Launched From Submarines

Imagine a submarine staying hidden while it sends out a smaller robotic scout.

That's the kind of capability L3Harris is developing.

In March, the Defense Innovation Unit awarded L3Harris a contract for a system that launches and recovers its Iver4 900 underwater robots through submarine torpedo tubes.

An Iver4 can help survey underwater terrain, detect mines, and gather information without sending a crewed vessel directly into danger.

L3Harris isn't alone in this field; HII (above) won a separate launch-and-recovery development award.

But L3Harris also sells an enormous range of defense electronics, sensors, and communications systems.

Second-quarter revenue reached $5.9 billion, up 8%.

New orders were $7.3 billion, pushing backlog to a record $42 billion.

Management raised its full-year revenue guidance to $23.2 to $23.7 billion.

What I'm watching: whether Iver4 and submarine-launch systems move beyond initial contracts into production fleets and overseas sales.

The drawback is the same as HII: underwater robots are only one component of a much larger business.

Kraken Robotics (PNG.V / KRKNF): The Picks-and-Shovels Play

There's one smaller stock I find especially interesting.

Kraken, a Canadian company, makes the equipment underwater robots need to function: advanced sonar, subsea batteries, and related sensing systems.

So an investor doesn't have to guess which submarine drone will win.

Its technology can be incorporated into several manufacturers' machines.

And, given its experience building electronics for a harsh ocean environment… it has a technology head start on any potential newcomers.

In August, Kraken reported C$27.3 million in second-quarter revenue and a 59% gross margin.

More interesting: the company said combined 2026 product orders for Kraken and the recently acquired Covelya had reached approximately C$355 million.

It also signed a long-term agreement to supply batteries for extra-large unmanned underwater vehicles.

After acquiring Covelya in July, Kraken guided to C$290 million to C$320 million in 2026 revenue, including six months of the acquisition's contribution.

What I'm watching: new sonar and battery design wins, deliveries against orders, and whether the acquisition strengthens margins rather than simply making the company larger.

Kraken's primary listing is in Canada; KRKNF is its U.S. OTC symbol.

It's smaller and riskier than HII or L3Harris.

The New Navy

Three investments. Three different ways to participate.

HII builds the vessels.

L3Harris builds underwater systems that can work with submarines.

Kraken supplies the specialized eyes and power systems.

None is guaranteed to benefit simply because navies want more autonomous machines.

Future contracts must turn into delivery, revenue, and profit as countries allocate their budgets to new marine warfare technology.

On Thursday, we'll finish this series with warfare's final form.

After robots that fly, crawl, and swim come robots shaped like us.

Why?

Because humans already built a world of tools, ships, aircraft, and machines designed for human bodies and hands.

And, of course, weapons too.

Next issue: The rise of Terminator robots…

Always be prospering,

Harry Seldon
Moonshot Minute

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