Drone Stocks Rise After Defense Secretary Hegseth Announces Drone Surge

Shares of drone stocks are trading higher after Secretary of Defense Pete Hegseth announced efforts to fast-track drone production.

What To Know: Hegseth signed a directive that allows military commanders at the rank of colonel or Navy captain and above to independently procure and test small drones—specifically Group 1 and Group 2 unmanned aircraft systems.

These drones will now be treated as "consumable weapons," removing them from traditional aircraft tracking systems and enabling quicker fielding of technology, including 3D-printed and commercial off-the-shelf systems.

The order rescinds several legacy Pentagon policies that Hegseth said have held back innovation and directs all branches of the military to conduct drone combat simulations. It also mandates coordination with the Federal Aviation Administration to expand approved flight ranges, speed up spectrum approvals, and create new test areas focused on swarm tactics, live-fire exercises, and combined-arms scenarios.

"The Department's bureaucratic gloves are coming off," Hegseth said. He added that under President Trump's leadership, drone lethality "will not be hindered by self-imposed restrictions."

Some drone stocks trading higher, include Red Cat Holdings, Inc., AeroViroment, Inc. (NASDAQ:AVAV), and Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS).

Price Action: At the time of writing, Red Cat shares are trading 23.3% higher at $8.36, AreoVironment stock is trading 9.88% higher at $261.05 and Kratos stock is trading 11.7% higher at $51.69, according to data from Benzinga Pro.

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