Drones, Hypersonics, and Airbus: Kratos Becomes the Defense Market's Dark Horse
The report specifically highlighted the company's expanding portfolio of affordable combat drones, such as the XQ-58A Valkyrie, and its pivotal contracts under the MACH-TB hypersonic testbed program. This comes just days after multiple other firms, including Benchmark, Stifel, and RBC, reaffirmed or upgraded their bullish stances, with price targets ranging between $50 and $54.
Analysts appear to be coalescing around Kratos' reputation as a rare defense-tech play: agile, innovation-driven, and deeply embedded in programs that are both high priority and high margin. That confidence got another jolt on July 16, when Airbus announced a partnership with Kratos to supply Valkyrie drones, equipped with Airbus mission systems, to the German Air Force. Deliveries are expected by 2029, but the contract solidifies Kratos' growing international relevance in the unmanned combat space.
Founded in 1994 and headquartered in San Diego, Kratos specializes in disruptive defense technologies, including autonomous aircraft, hypersonic test vehicles, missile defense systems, and satellite ground infrastructure. Its customers include the U.S. Department of Defense, NATO allies, and major primes looking for cutting-edge solutions without the legacy bloat.
While we acknowledge the potential of KTOS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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