Shares of U.S. drone makers jumped Thursday after Bloomberg reported the Trump administration is vetting funding deals with a select group of firms to expand domestic production and cut costs. Unusual Machines surged 50%, touching a record high, while Red Cat Holdings climbed 25%. AeroVironment added 15% and Kratos Defense rose 13%. The surge lifted the aerospace subgroup of the S&P 500 by roughly 0.8%.

The push follows concerns that U.S. defense supply chains rely heavily on overseas components, prompting officials to consider subsidies or direct investments. The administration's approach mirrors earlier initiatives in semiconductor and battery sectors, signaling a broader industrial strategy. Such support could accelerate certification of commercial drones for military use.

Investors now view the sector as a beneficiary of government cash, tightening the spread between drone stocks and broader tech indexes. With several firms already posting double‑digit gains, capital may flow toward manufacturers that can scale quickly. Analysts warn that delay in funding could reverse the gains, leaving valuations vulnerable.