Trump Invested in Intel And it Soared 500%. Here's the Next Industry the Government is Buying.

Defense drone stocks rose sharply midday Thursday after reports said the Pentagon is discussing funding agreements with drone manufacturers that could include direct federal equity stakes. Unusual Machines led with a 58% intraday jump, while Red Cat Holdings rose 34%. AeroVironment climbed 17% and Kratos Defense & Security Solutions gained 14%. Traders viewed the move as coordinated repricing tied to potential industrial policy under the Trump administration. The equity-stake model resembles the CHIPS Act approach, where government equity involvement helped drive major stock re-ratings. The strategic demand case is reinforced by battlefield data from Ukraine, where drones accounted for most reported Russian casualties and increased sortie activity.

"Defense drone stocks are surging at midday Thursday after a Wall Street Journal and CNBC report indicated the Pentagon is in talks with drone manufacturers about funding deals that could include direct federal equity stakes. Unusual Machines ( NYSE:UMAC) stock leads the rally with a 58% intraday jump, while Red Cat Holdings ( NASDAQ:RCAT) stock is up 34%."

"The trigger is the report that the Pentagon is exploring funding agreements that could grant the U.S. government direct equity stakes in domestic drone makers like Unusual Machines. Traders are positioning for the Trump administration to extend an industrial policy playbook that has already reshaped semiconductors and rare earths."

"The template is visible in chips. Intel ( NASDAQ:INTC) stock has surged 491% over the past year after the U.S. government acquired significant equity interests through the CHIPS Act escrow structure. NVIDIA ( NASDAQ:NVDA) followed with a $5 billion purchase of Intel common stock, and Intel was selected as the host CPU for NVIDIA DGX Rubin systems."

"The strategic case for drones, and names like AeroVironment and Red Cat, are being written on Ukrainian battlefields. Ukrainian Defence Minister Mykhailo Fedorov reported that drones caused 96% of the 35,351 Russian casualties Ukraine inflicted in March, with Ukrainian forces averaging 11,000 sorties per day."

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