On Thursday, shares of drone companies surged after The Wall Street Journal reported that the Trump administration is in discussions to fund several drone manufacturers, potentially including equity stakes that would give the government ownership.
Notably, Unusual Machines saw its stock price increase by nearly 50%, while Kratos Defense & Security and AeroVironment rose by 14% and 17%, respectively. The Drone & Modern Warfare ETF (JEDI) also rallied by 8%.
These funding deals are aimed at boosting domestic production of drones, which are essential for modern warfare, and could face scrutiny due to the involvement of Donald Trump Jr., who is a shareholder and advisory board member of Unusual Machines.
Analyst Austin Bohlig from Needham noted that such funding makes sense given the critical nature of drone components and the current supply constraints. The Trump administration's approach to taking equity stakes in companies is unprecedented outside of crises, focusing on industries crucial to national defense, such as critical minerals and semiconductors