With flurry of FAA approvals, drones are about to fly much farther over US skies
A rendering of P2 Zips charging at a docking station.
Zipline
This week, drone delivery company Zipline was granted Federal Aviation Administration approval to fly drones beyond the visual line of sight. That’s a major milestone in efforts to extend the range of the domestic drone industry over U.S. airspace, and Zipline isn’t the only drone operator to recently receive FAA approval.
In a series of moves in August and earlier in September, the FAA gave the same clearance to UPS subsidiary Flight Forward (which delivers packages by drone), avionics provider uAvionix, and drone inspection provider Phoenix Air Unmanned. It’s a regulatory aim that the drone companies have been working towards for a decade and will pave the way for other companies to receive streamlined approval for their own drone flights beyond the visual line of sight, as well as for more consumer companies to accelerate efforts to deliver goods by unmanned aircraft.
The FAA told aviation publication Flying that the approvals will serve as the basis for “summary grants” in the future as it continues to work towards formal rulemaking and to help fast track business models similar to the ones to receive the first approvals, meaning package delivery, drone inspections, medical supplies and drone aviation system development, such as uAvionix.
Prior to “beyond the visual line of sight” approval, human observers were required to be stationed along the entire route a drone was flying to ensure that there was no interference with air traffic. The new regulations allow for drones to be flown without observers, which the companies say will increase accessibility and scalability of what’s still a nascent business in the U.S.
“For the last few years, we’ve been operating in the U.S. with training wheels,” said Zipline CEO Keller Cliffton. “We were able to make deliveries to homes but we always needed to stay within a mile-and-a-half of our distribution centers, which made it easy to serve tens of thousands of people, but impossible to serve hundreds of thousands of people.”
Now he says Zipline will be able to serve “hundreds of millions of people” in the U.S.
“It unlocks the scale of the technology so that everybody can benefit. And, at scale, this technology will save people a lot of money, and it will also save lives in the U.S.,” said Cliffton, whose company began in 2014 as a drone solution for emergency medical deliveries in hard-to-reach geographies but has expanding into multiple sectors and has deals with retailers including Walmart.
In March, Zipline released its drone Platform 2, or P2 Zip, which can carry up to eight pounds within a ten-mile radius, finish flights in about ten minutes, and land a package on a space as small as a table or doorstep.
“The reason that number is important is that when you look at e-commerce in the U.S., a vast majority of packages weigh five pounds or less,” Cliffton said in a conversation with CNBC about the new drones in March. As far back as 2020, the company was part of drone tests with Walmart in Arkansas. Early this year, Walmart announced that with partners including Zipline, DroneUp and Flytrex, it had grown to 36 drone delivery hubs across Arizona, Arkansas, Florida, North Carolina, Texas, Utah and Virginia.
The FAA approvals mean the regulator is satisfied that the drones can safely operate with autonomous technology to monitor airspace and avoid aircraft that they may encounter. Zipline’s drone programming enacts 500 preflight safety checks and has an acoustic avoidance system, though was still unable to fly beyond the line of sight until it received FAA approval.
The list of products that Zipline — a five-time CNBC Disruptor 50 company that ranked No. 25 on this year’s list — is flying since it started as a medical care supplier in Rwanda has grown to include food deliveries, prescriptions, agriculture products, retail items, and medical supplies for both humans and animals.
“Approval of an onboard perception system that enables beyond visual line of sight flight has been the holy grail for drone delivery for the last 10 years,” Cliffton said.
And he says there are global implications of the long-awaited U.S. decision.
“Both the FAA and Congress know that it is really strategically important for the U.S. to stay in the lead when it comes to this fundamental technological transformation that’s happening, where it’s suddenly now possible to build the first logistics systems that are fully zero emission and automated,” he said.
“I think some people have seen how much other countries were growing on this front and thought maybe the U.S. was going to fall behind, and I think this is an exciting demonstration that the U.S. may be a fast follower of a few other countries, but that in general, the U.S. is going to be a global leader when it comes to this industry.”
Palantir co-founder and CEO Alex Karp attends meetings at the U.S. Capitol in Washington on Oct. 18, 2023.
Jonathan Ernst | Reuters
With Palantir’s stock plummeting more than 11% this week despite a better-than-expected earnings report, CEO Alex Karp took aim at investors betting against the software company.
Karp, who co-founded Palantir in 2003, went after short sellers in two separate interviews on CNBC this week. After “Big Short” investor Michael Burry revealed bets against Palantir and Nvidia, Karp on Tuesday accused short sellers of “market manipulation.”
He repeated that message on Friday in an interview with CNBC’s Sara Eisen, again knocking Burry’s wager against the stock.
“To get out of his position, he had to screw the whole economy by besmirching the best financials ever … that are helping the average person as investors [and] on the battlefield,” Karp said.
Even with Palantir’s slide this week, the stock is up 135% in 2025 and has multiplied 25-fold in the past three years, an extended rally that’s lifted the company’s market cap to over $420 billion. While revenue and profit are growing rapidly, the multiples have shot up much faster, and the stock now trades for about 220 times forward earnings, a ratio that rivals Tesla’s.
Nvidia and Meta, by contrast, have forward price-to-earnings ratios of about 33 and 22, respectively.
In August, Citron Research’s Andrew Left, a noted short seller, called Palantir “detached from fundamentals and analysis” and said shares should be priced at $40. It closed on Friday at $177.93 after late-day gains pushed the stock into the green.
Palantir, which builds analytics tools for large companies and government agencies, reported earnings and revenue on Monday that topped analysts’ estimates and issued a forecast that was also ahead of Wall Street projections.
But the stock fell about 8% after the report and then slid almost 7% on Thursday. Karp told Eisen that the recent boom in Palantir’s share price isn’t just for Wall Street.
“We’re delivering venture results for retail investors,” he said.
While Palantir has in the past faced a fairly heft dose of short interest, there are currently relatively few investors placing big bets against it. The short interest ratio, or the percentage of outstanding shares being sold short, peaked at over 9% in September and is now at a little over 2%, which is about as low as its been since the company went public in 2020.
Still, calling out the doubters is a common occurrence for Karp, who has previously said on CNBC that people should “exit” if they “don’t like the price.”
In May, after the stock plummeted following earnings, Karp said ,”You don’t have to buy our shares.”
“We’re happy,” he said. “We’re going to partner with the world’s best people and we’re going to dominate. You can be along for the ride or you don’t have to be.”
The company has also faced backlash over its work with government agencies like U.S. Immigration and Customs Enforcement, and Karp has admitted that his strong pro-Israel stance led some people to leave the company.
The boisterous CEO has been particularly vocal this week. On Monday’s earnings call, he questioned how happy the people are who didn’t invest in the company, and told them to “get some popcorn.”
And on CNBC he aimed much of his ire at Burry after the investor revealed his short positions in Palantir and Nvidia.
“The two companies he’s shorting are the ones making all the money, which is super weird,” Karp told CNBC’s “Squawk Box” on Tuesday. “The idea that chips and ontology is what you want to short is bats— crazy.”
Affirm CEO Max Levchin said Friday that while the buy now, pay later firm isn’t seeing credit stress among federally employed borrowers due to the government shutdown, there are signs of a change in shopping habits.
“We are seeing a very subtle loss of interest in shopping just for that group, and a couple of basis points,” Levchin told CNBC’s “Squawk on the Street.”
At least 670,000 federal employees have been furloughed in the shutdown, and about 730,000 are working without pay, the Bipartisan Policy Center said this week.
Levchin said he’s closely watching employment data for signs of major disruptions, but the company is “capable” of adjusting credit standards when needed.
“Right now, things are just fine,” he said. “We’re not seeing any major disturbances at all.”
The federal funding lapse, which began Oct. 1, is the longest in U.S. history and has halted work across agencies with an impact beyond those who are government employees. The SNAP food benefit program, which serves 42 million Americans, has also been cut off.
The comments from Levchin followed a fiscal first-quarter earnings report that blew past Wall Street’s estimates. Affirm posted earnings of 23 cents per share on $933 million in revenue. Analysts polled by LSEG expected earnings of 11 cents per share on $883 million in sales.
Revenues climbed 34% from a year ago, while gross merchandise volumes jumped 42% to $10.8 billion from $7.6 billion a year ago. That surpassed Wall Street’s $10.38 billion estimate.
The fintech company, which went public in 2021, also lifted its full-year outlook, saying it now expects gross merchandise volume to hit $47.5 billion, versus prior guidance of $46 billion.
Affirm also said it renewed its partnership with Amazon through 2031. The company has also inked deals with the likes of Shopify and Apple in a competitive e-commerce landscape.
Long-time partner Walmart recently ditched Affirm for Swedish buy now, pay later firm Klarna, which went public in September after delaying its public offering due to market uncertainty caused by President Donald Trump‘s tariff plans. Worries of a pullback in discretionary spending due to tariffs ignited fears across the fintech sector.
Levchin said categories such as ticketing and travel have seen an uptick in interest, and consumer shopping remains strong. Active consumers grew to 24.1 million from 19.5 million a year ago.
“We’re every single day out there preaching the gospel of buy now, pay later being the better way to buy, and consumers are obviously responding,” he said.
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