On May 29, Kratos Defense & Security Solutions rose 5.16% in pre-market trading, trading at $68.2/share, with trading volume of $1.18 million. The stock continues to gain momentum following reports that the Trump administration is advancing funding agreements with multiple drone companies.

According to sources, the Pentagon is negotiating with several private drone companies to provide financial support aimed at expanding domestic production capacity and reducing costs for this increasingly critical defense technology. The potential agreements may include both debt financing and equity investment, meaning the U.S. government could hold partial ownership stakes in these companies. The Office of Strategic Capital, a lending agency established to support companies vital to national security supply chains, is also involved in the negotiations.

The broader drone and defense sector has rallied sharply on this news. In the prior session, Kratos rose over 12%, while peers such as AeroVironment gained 18% and Red Cat Holdings surged nearly 40%. The Defense Department's fiscal year 2027 budget proposal allocates nearly $75 billion for drone systems, counter-drone technology, and related capabilities, underscoring the strategic priority of this sector.

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