Al Root

Drones stocks soared early Friday after Defense Secretary Pete Hegseth announced in a video filmed at the Pentagon with Metallica playing in the background that his department was "unleashing American drone dominance."

Shares of AeroVironment and Kratos Defense & Security Solutions were up 5.5% and 8.3%, respectively. Shares of smaller Red Cat and Unusual Machines were up 17.3% and 22.3%, respectively. The S&P 500 and Dow Jones Industrial Average were down 0.7%.

AeroVironment makes guidable, loitering munitions, among other things. Kratos makes tactical unmanned vehicles. Red Cat makes the Black Widow reconnaissance drone, among other things. Unusual Machines makes drone components.

Shares of the largest defense contractors weren't getting a boost. Lockheed Martin and Northrop Grumman stocks were down about 0.2%. Both of those companies work on unmanned systems, but are large, diversified defense players.

"Today, I'm rescinding restrictive policies that stifle production, and this will unleash American manufacturing and ingenuity," added Hegseth. He plans to boost manufacturing, supply combat units with more drones, and train senior officers in their use.

The U.S. military, of course, employs dozens of unmanned systems. The move represents an acceleration of the trend.

Write to Al Root at allen.root@dowjones.com

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July 11, 2025 10:41 ET (14:41 GMT)

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