By Connor Hart

The Pentagon is going all in on drones, a move that has provided a boost to several defense-technology stocks.

Defense Secretary Pete Hegseth has ordered the removal of any policies that slow down the development and deployment of drones, according to a memo reviewed by The Wall Street Journal.

"I am rescinding restrictive policies that hindered production and limited access to these vital technologies, unleashing the combined potential of American manufacturing and warfighter ingenuity," he said in the memo, sent Thursday and titled "Unleashing U.S. Military Drone Dominance."

The memo builds upon executive orders signed by President Trump last month aimed at easing restrictions on U.S.-made drones and strengthening an industry that has struggled to compete with Chinese competitors.

The Defense Department plans to boost what it called a nascent U.S. drone manufacturing base by approving hundreds of American-made products for military purchase.

The order is expected to deliver a lift to defense-technology companies specializing in drones and unmanned aerial vehicles, analysts said. Shares of publicly traded defense companies opened higher Friday, including Kratos Defense & Security Solutions, up 9%; Red Cat, up 32%; and Unusual Machines, up 21%.

The Pentagon also intends to arm combat units with a range of low-cost drones developed by American engineers and artificial-intelligence experts, the memo said.

"Finally, we'll train as we expect to fight," Hegseth wrote, noting that drones will be fully integrated into combat training by next year.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

July 11, 2025 09:42 ET (13:42 GMT)

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