On May 29, Kratos Defense & Security Solutions rose 5.35% in after-hours trading, trading at $68.6/share, with trading volume of $19.1 million. The stock extended gains from the regular session, where it had already surged approximately 14%.

On the news front, the Trump administration is reportedly negotiating with U.S. drone companies to provide funding aimed at boosting domestic production capacity and reducing costs. The Department of Defense has identified multiple companies that may receive support, with agreements potentially involving both debt financing and equity investment structures. The U.S. Department of Defense FY2027 budget proposal allocates nearly $75 billion toward drones, counter-drone technology, and related systems, underscoring the strategic priority of unmanned systems amid ongoing conflicts in Ukraine and the Middle East.

Kratos operates a dedicated Unmanned Systems segment, producing jet-powered unmanned aerial drone systems, hypersonic vehicles, rocket systems, and propulsion systems for drones, missiles, and loitering munitions — positioning the company as a direct beneficiary of expanded government drone investment. Within the Aerospace & Defense sector, Red Cat Holdings rose 4.59%, while Rocket Lab USA fell 0.64% and Redwire Corp. declined 1.66%.

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