Shares of Kratos Defense & Security Solutions (KTOS) soared 14.96% during intraday trading on Thursday, leading a broad rally across the U.S. drone sector.

The surge was triggered by a Wall Street Journal report that the Trump administration is pursuing funding deals with a group of drone companies. The talks, which could result in funding via a mix of debt and equity, are part of an effort to increase domestic production and lower the costs of these increasingly vital weapons systems.

Drone dominance was identified as a top presidential priority in President Trump's defense budget request, making companies like Kratos Defense, which provides unmanned systems and related technologies, direct potential beneficiaries of such government-backed initiatives. The positive news sparked investor optimism across the sector, lifting multiple drone-related stocks during the session.