Pentagon plans to fund domestic drone makers, stocks rise

Shares of several defense and drone technology companies surged sharply on Thursday following a report that the Pentagon is in talks to provide direct financial support to domestic drone manufacturers. The potential funding could include a mix of loans and equity stakes, which would grant the U.S. government partial ownership in certain firms.

According to the report, discussions have involved companies including Performance Drone Works, Neros Technologies, and Unusual Machines. Officials said the talks are ongoing and no final agreements have been reached. The initiative is linked to the Pentagon's Drone Dominance program, a $1.1 billion effort aimed at stockpiling approximately 300,000 low-cost attack drones by the end of 2027.

The proposed funding is intended to help manufacturers expand domestic production capacity and reduce per-unit costs. Current U.S. manufacturing capacity is estimated at roughly 100,000 drones annually, a figure that lags behind Ukraine's reported output of about four million drones last year. Many American-made drones also currently cost tens of thousands of dollars more than the Pentagon's target price of around $5,000 per unit.