Nvidia stock's explosive success — +58 % in the last year alone — has investors scrambling to find the next unicorn. While some are betting on rivals such as Advanced Micro Devices, hoping they will ride a similar wave of success, there could be opportunities in other semiconductor industry sectors, including defense.

First, given that the AI craze is far from over and more industries are adopting the technology in their operations, the semiconductor sector still appears to have excellent growth potential. Even if Trump announces new restrictions on chip exports to China, this will unlikely dampen chip companies' momentum.

As for opportunities in the defense industry, although one of Donald Trump's main campaign promises was to resolve major global conflicts, including those in Gaza and Ukraine, progress on that front has been modest. Countries continue to hold talks, but no one seems willing to lay down their arms.

In fact, new conflicts seem to arise almost every month. Last week, Cambodian and Thai forces exchanged attacks that resulted in multiple casualties, and before that, Iran was bombed. In such a climate, it is clear that many countries will continue to increase defense spending, including those on drones.

Conflicts between Russia and Ukraine, as well as between Azerbaijan and Armenia, have highlighted a shift in modern warfare. Drones are replacing heavy equipment and large troop deployments, driving demand for anti-drone technologies, such as laser defense systems.

So who are the leading players in this field?

Among the companies with significant UAV (unmanned aerial vehicle) programs are AeroVironment, Kratos Defense, Red Cat, L3Harris Technologies, Mercury Systems, Northrop Grumman, Lockheed Martin, Boeing, Elbit Systems, and RTX Corp. Many others are also increasingly investing in this growing technology.

The problem for investors is that drone-related investments are not exactly new. In many cases, the expected growth in defense orders has already been factored into these stocks. Conducting a thorough comparative analysis before adding any of these companies to your portfolio is essential.

If you are satisfied with average market returns, index ETFs could be a solid option. In fact, it's not a bad decision: so far this year, the S&P 500 and Nasdaq have risen nearly 9% and 12%, respectively. This strategy offers peace of mind, saving you the stress of reacting to every headline.

Ultimately, your choice should reflect your own risk tolerance. Even if you believe in a company's long-term potential and aren't concerned about short-term declines, it's still wise not to go all-in on a single stock. Diversification may not make you rich overnight, but it could save you from losing everything at once.