Drone stocks rally after report of Pentagon-backed funding discussions
May 28, 2026 8:54 AM
IH Market News
Shares of several U.S. drone manufacturers moved sharply higher Monday after a report from The Wall Street Journal said the Trump administration is considering funding agreements with domestic drone companies to strengthen U.S. production capabilities.
Unusual Machines (AMEX:UMAC) surged 25%, while Red Cat (NASDAQ:RCAT) gained 13%. AeroVironment (NASDAQ:AVAV) and Kratos Defense & Security (NASDAQ:KTOS) each climbed 10%. Ondas (NASDAQ:ONDS) advanced 9%, and AIRO Group (NASDAQ:AIRO) rose 7%.
According to the report, the administration is exploring financing arrangements with American drone manufacturers as part of a broader push to expand domestic weapons production and lower procurement costs.
The discussions reportedly involve several private drone companies as well as Pentagon officials, including representatives from the Office of Strategic Capital, a Defense Department-backed lending office created during the Biden administration to support businesses tied to critical national security supply chains.
The negotiations are still ongoing, with defense officials continuing to review participating companies before any final agreements are reached.
People familiar with the discussions told the Journal that some proposed deals could involve a combination of debt financing and equity investments through multiple funding structures, potentially giving the U.S. government partial ownership stakes in certain companies.
Among the firms reportedly being considered for funding are Performance Drone Works, which recently secured a U.S. Army contract for reconnaissance drones; Unusual Machines, a drone component supplier that counts Donald Trump Jr. as both a shareholder and advisory board member; and Neros Technologies, a Sequoia Capital-backed startup focused on small first-person-view drone systems.
Unusual Machines stock price
Red Cat Holdings stock price
AeroVironment stock price
Kratos Defense & Security Solutions stock price
Ondas Holdings stock price
Airo Group stock price
Original: Drone stocks rally after report of Pentagon-backed funding discussions
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