Shares of Kratos Defense & Security Solutions (NASDAQ:KTOS) climbed 3.6% while Red Cat Holdings (NASDAQ:RCAT) advanced 3.1% after both firms were listed among 25 vendors invited to take part in Phase I of the War Department's Drone Dominance Program.
The companies are set to participate in a live assessment called "the Gauntlet," which is scheduled to begin on February 18 at Fort Benning. Military operators will test vendor systems during the evaluation, which is expected to conclude in early March. The War Department has indicated that approximately $150 million in prototype delivery orders will be placed shortly after the phase concludes.
The Drone Dominance Program has been funded at $1.1 billion across four phases. Its stated objective is to rapidly field low-cost, unmanned one-way attack drones at scale as part of efforts to strengthen America's military capabilities. Program leadership has described the funding as "ready and steady."
Both Red Cat's subsidiary Teal Drones and Kratos SRE, Inc. appear on the alphabetical list of 25 companies invited to the first phase. The initiative, commissioned by Secretary of War Pete Hegseth, was framed as a push to match emerging technologies to threats and to outfit combat units with lethal drones without "bureaucratic delay." The Department's stated plan calls for fielding hundreds of thousands of weaponized, one-way attack drones ready for combat by 2027.
Execution of the program is assigned to multiple organizations within the defense community, including the Defense Innovation Unit, the Test Resource Management Center, and the Naval Surface Warfare Center, Crane Division. Those organizations are responsible for running the evaluations and managing prototype work under the program's funding profile.
The market movements for KTOS and RCAT followed the public announcement of the invited participants. Investors appear to have reacted to the opportunity represented by potential prototype orders and the broader multiyear program funding.
Summary
Kratos and Red Cat were named among 25 vendors for Phase I of the War Department's Drone Dominance Program, triggering modest share gains. The Gauntlet evaluation begins February 18 at Fort Benning and ends in early March, with about $150 million in prototype orders expected soon afterward. The full program carries $1.1 billion in funding over four phases and aims to field large numbers of one-way attack drones by 2027.