Drone makers Aerovironment (AVAV) and Kratos Defense (KTOS) certainly seem to have very bright futures ahead of them, as both have landed major deals from the Pentagon in the last year, both firms have integrated advanced technologies into their products, and drones have become a major part of warfare. Moreover, geopolitical tensions are generally high and rising in much of the world, causing many countries to raise their defense spending meaningfully. And President Donald Trump is asking Congress to increase defense spending by about 50% in fiscal 2027, while Defense Secretary Pete Hegseth is clearly a big fan of drones.
But both AVAV stock and KTOS stock have extremely high valuations, partly due to recent crises that have dominated the headlines in recent weeks.
