Cathie Wood's ARK Invest Adds Kratos Defense, Aerovironment Stocks As Pentagon Bets On Drones To Drive Future Warfare

• ARK Invest bought 209,379 Kratos shares for $8.7 million and 31,040 AeroVironment shares for $4.3 million, adding to Tuesday's purchases. 
• The buys increase ARK's drone exposure as the Pentagon plans a new Autonomous Warfare Command.
• Kratos' XQ-58A Valkyrie system can fly autonomously alongside F-35 and F-22 fighter jets. 

Cathie Wood's ARK Invest is doubling down on drone warfare, buying 209,379 shares of Kratos Defense & Security Solutions (KTOS) and 31,040 shares of AeroVironment (AVAV) on Wednesday. The investor's latest bets highlight rising conviction that autonomous aircraft and loitering munitions will drive the Pentagon's next wave of defense spending. 

Kratos, AeroVironment Get Fresh Lift From ARK's Drone Strategy 

ARK executed trades across the ARK Innovation ETF (ARKK), ARK Autonomous Technology & Robotics ETF (ARKQ), and ARK Space Exploration & Innovation ETF (ARKX). By expanding exposure to low-cost jet drones and loitering munitions, Wood is positioning her funds to capture multi-billion-dollar shifts in modern military procurement. 

According to ARK Invest's X post, the firm bought 209,379 shares of Kratos Defence for $8.7 million and added 31,040 shares of AeroVironment across ARKQ and ARKX for $4.3 million. This builds on ARK's Tuesday purchases, when the firm bought 100,523 Kratos shares and added 31,109 shares of AeroVironment. 

Both Kratos Defense & Security and AeroVironment stocks edged 0.2% lower overnight ahead of Thursday. 

The Pentagon is creating a new four-star Autonomous Warfare Command, or“Autowarcom,” to speed up the development and use of drones, robots and other autonomous weapons. The command is expected to launch by October 2027, as the U.S. pushes faster defense procurement and has proposed $74 billion for autonomous and counter-drone technology. 

Kratos Expands Its Drone Business

Kratos Defense & Security Solutions develops unmanned aircraft, jet-powered drones, tactical strike systems, satellite communications, and other defense technologies. Kratos' XQ-58A Valkyrie is a key platform for the U.S. military's Collaborative Combat Aircraft programs. The autonomous jet can fly faster than Mach 0.85, travel up to 3,000 nautical miles, and work with F-35 and F-22 fighter jets using AI and advanced control systems. On Oct.5, Kratos won more than $100 million in new contracts to develop space intelligence and cybersecurity tools for U.S. military operations.

The projects will help the military track radio signals, gather intelligence, support targeting, electronic warfare, and cyber operations. The work will use Kratos' KnownSpace network, which has more than 190 sensors worldwide, along with its software and portable space-monitoring systems.

AeroVironment Leads In Tactical Drone Systems

AeroVironment develops small military drones and loitering weapons, including its widely used Switchblade 300 and 600 systems. Last month, AeroVironment received its first international order for its LOCUST laser weapon system, worth more than $50 million. The deal expands its counter-drone business globally and follows a $464.8 million U.S. Army contract for its high-energy laser system. 

KTOS, AVAV Stocks: Retail View 

On Stocktwits, retail sentiment around KTOS stock remained 'bullish,' while AVAV remained 'bearish.' 

So far this year, KTOS and AVAV stocks have crashed 44% and 42%, respectively. 

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