President Donald Trump‘s administration has made a habit of taking equity stakes in American industries it deems strategically critical — Intel Corp. (NASDAQ:INTC), rare earth mining companies like MP Materials (NYSE:MP) and others have already seen the government show up as a part-owner rather than just a customer.
Now drones are next.
- ONDS stock is soaring. See the chart and price action here.
A Wall Street Journal report published Wednesday revealed the administration is in active talks to extend that same playbook to domestic drone manufacturers, with the Pentagon’s Office of Strategic Capital leading discussions on a mix of debt and equity financing for select U.S. drone firms.
The goal is straightforward: accelerate domestic production, cut costs, and reduce dependence on Chinese-made drone components and supply chains before a potential flashpoint forces the issue.
The policy foundation is already in place.
Trump signed the “Drone Dominance” executive order in June 2025, making mass autonomous drone deployment a presidential priority.
The FY2027 defense budget backs it with tens of billions in drone and autonomy funding, targeting 300,000 low-cost attack drones deployed by 2027.
The $1 billion Drone Dominance Program is actively running — 49 companies were invited Wednesday to compete in the Phase II qualifying event in June. The top performers advance to a production and delivery contract stage.
How To Trade It
Markets moved fast on the WSJ report. Here’s where the key names stand:
Ondas Holdings Inc. (NASDAQ:ONDS):
- The broadest platform play in the group.
- Record Q1 revenue of $50.1 million, a $457 million backlog, and 2026 guidance of +$390 million.
- The $196.6 million Omnisys acquisition added AI battlefield software on top of its drone hardware stack — making it a more complete platform than pure-play hardware names.
Unusual Machines Inc. (AMEX:UMAC):
- The most politically charged name. Donald Trump Jr. serves as both a shareholder and advisory board member.
- Its partner Powerus advanced to Phase II of the Drone Dominance Program this week.
- Unusual Machines was specifically named by WSJ among companies the Pentagon has identified as potential funding candidates.
Red Cat Holdings Inc. (NASDAQ:RCAT):
- The recon drone pure-play.
- Q1 revenue surged 869% year-over-year to $15.5 million.
- Its Teal Drones subsidiary is already in the Drone Dominance Program, and it recently locked in a
- 173-system order from Japan’s Ministry of Defense
Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS):
- The most institutionally credible name on the list.
- Up 70% over the past year, per Benzinga Pro data, focused on jet-powered unmanned platforms and target drone systems already embedded in Pentagon programs.
AeroVironment Inc. (NASDAQ:AVAV):
- The legacy small-UAS leader with loitering munitions and ISR platforms in active military use worldwide.
- Deep existing contract base that makes it a reliable beneficiary of any spending expansion.
- The most speculative name on the list.
- Catches bids on drone-sector headlines, but lacks the revenue scale or confirmed program participation of the others.
The WSJ report stopped short of naming confirmed recipients or deal timelines — these are still discussions.
But given the Trump administration’s track record of following through on strategic equity plays, the drone sector is pricing in the real possibility that government capital is coming.
Photo: Joshua Sukoff / Shutterstock
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