If you believe that drone racing is a little silly, consider the fact that the new sport is appearing on ESPN (DIS) this August. In a statement last week, the 24/7 sports network announced, alongside the International Drone Association, a distribution deal. The appearance on ESPN will provide legitimacy to the sport and gather interest from various demographics. Many have questioned the move by ESPN, even though drone racing will be broadcast live on ESPN3, but the move is clearly about ESPN targeting an audience that might not usually tune into the network.
The generation of young men who watch videos mostly on the internet, stream entertainment digitally and play videogames online is becoming the most desired group to win over amongst sectors. Twitch has gathered a large viewership just broadcasting video game tournaments and vlogs online and now ESPN is trying to incorporate something that might lure in some of those viewers. This purely digital group also is going to be critiquing how the tournament is viewed—will GoPro (NASDAQ:GPRO) be used in the live action? This is just one of the many companies that could profit off of Drone Racing becoming a sport.
IXYS Corp. (NASDAQ:IXYS) is a California-based company that makes chips for drones, robots and wearables. As drone sales rise, so will the chips needed to provide power to these flying racers. Another company that could benefit, especially as networks figure out how to broadcast the video, is Ambarella (NASDAQ:AMBA). The company manufactures chipsets and software for video uploads and transmission. As a matter of fact, AMBA is most famous for making image application chips for GoPro’s cameras. Not to mention, many drone makers use AMBA’s chips including the largest drone maker, DJI Innovations, which is so far privately held.
Another company that could stand to profit of the growth of the sport is Qualcomm (QCOM), one of the world’s largest chip makers. QCOM has been trying to grab market share of drones since they released a reference design for drones in 2015. The Snapdragon Flight uses Qualcomm’s spapdragon processor couples with wireless radios, cameras, and sensors. The purpose of this model was for builders to construct a model for cheap. Many drone makers are using the model as a reference point to build drones to compete against DJI.
Are there any competitors that could profit? The answer is of course and one of those companies is Valmie Resources Inc. (OTCMKTS:VMRI). VMRI’s wholly owned subsidiary, Vertitek, and its new division, Vertitek Racing, which are makers of fabricated frames for those very racing teams. Teams are now preparing for the Liberty Cup as a chance to qualify for the U.S. Nationals. The Liberty Cup will be held in New Jersey and represents a proving ground for many of the teams to showcase their pilot’s skills and their drone’s abilities. The Liberty Cup will be the beginning of new day for the sport and will also be a great place for investors to find diamonds in the rough. Plus, there will be certainly be hundreds of amazing new videos to watch online.