Why Kratos (KTOS) Stock Is Trading Up Today

What Happened?

Shares of aerospace and defense company Kratos (NASDAQ:KTOS) jumped 4.8% in the afternoon session after the company announced a partnership with Airbus to develop a European variant of its XQ-58A Valkyrie drone. 

The collaboration aimed to deliver a combat-ready version of the uncrewed combat aircraft for the German Air Force by 2029. The Valkyrie is a low-observable drone designed for long-range missions, capable of operating independently or in tandem with manned aircraft. Under the agreement, the flight-proven Valkyrie will be equipped with a mission system made by Airbus. The partnership was seen as a significant step for Kratos, positioning it to meet the urgent demand from European customers for advanced, uncrewed combat systems. The joint project also reinforced trans-Atlantic cooperation within NATO.

After the initial pop the shares cooled down to $57.03, up 2.9% from previous close.

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What Is The Market Telling Us

Kratos’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock gained 3.1% on the news that the investment firm Cantor Fitzgerald reiterated its "Overweight" rating and $60 price target on the company. 

The firm's positive stance was based on the belief that the market was underestimating the growth potential of Kratos, especially concerning its X-58 drone program. Cantor Fitzgerald noted that while the drone market is competitive, the X-58 was well-positioned as military strategies shifted towards valuing attrition-lethality frameworks, which refers to the ability to sustain combat effectiveness despite losses. This analyst action followed other recent positive news for the defense technology company, including the U.S. Marine Corps' decision to move the XQ-58 Valkyrie drone into a Program of Record, which transitions it into production. Additionally, Noble Capital recently raised its price target on Kratos to $60, citing growth opportunities in both defense and commercial markets.

Kratos is up 116% since the beginning of the year, and at $57.03 per share, it is trading close to its 52-week high of $59.12 from July 2025. Investors who bought $1,000 worth of Kratos’s shares 5 years ago would now be looking at an investment worth $3,202.

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