Cathie Wood’s Ark Invest has been aggressively accumulating shares of Kratos Defense and Security Solutions (NASDAQ: KTOS), spending roughly $9.1 million so far in July.
The buying spree has pushed Kratos into the tenth largest position across all Ark Invest ETFs, with the total stake now worth just over $110 million.
The investment is notable given that KTOS shares have fallen more than 33% this year, making Wood’s continued purchases a strong expression of conviction in the company’s long-term trajectory.
Even after that significant decline, the stock still trades at nearly 300 times trailing earnings, a premium that reflects the market’s high expectations for future growth.
Kratos specializes in technology-driven defense hardware, including AI-controlled combat drones priced between $3 million and $5 million, far cheaper than manned fighter jets that cost more than $100 million each.
The company held a $2 billion backlog of orders at the end of the first quarter, while the Pentagon’s fiscal 2027 budget request includes more than $70 billion specifically allocated for military drones and anti-drone weapon systems.
Kratos’s Valkyrie XQ-58A drone has helped cement the company’s reputation as a proven supplier, designed to fly alongside crewed fighter jets to scout, absorb enemy fire, and deploy weapons.
On July 6, the company announced a 106,000-square-foot expansion of its Oklahoma City manufacturing plant to scale up jet drone production in response to rising demand.
Kratos has also landed several high-value contracts across its core divisions this year, including a $468 million follow-on Other Transaction Agreement from the U.S. Space Force awarded in March.
Under that Space Force contract, Kratos will build ground management software and system infrastructure to support the military’s Resilient Missile Warning and Tracking satellite constellation in medium Earth orbit.
The company’s financial performance has been strong, with first-quarter revenue hitting $371 million, up 22.6% year over year, while earnings per share rose 133% to $0.07.
Management raised its full-year guidance in May, forecasting revenue between $1.7 billion and $1.76 billion, representing growth of around 29% at the midpoint.
Adjusted EBITDA is expected to land between $170 million and $176 million for the full year, up roughly 44% at the midpoint compared to the prior year.
Kratos is often compared to Nvidia in the drone warfare space, viewed as a key enabler in a sector where artificial intelligence is rapidly redefining how military operations are conducted.
The company’s focus on affordability and rapid product development gives it a strategic edge over larger defense contractors such as General Atomics, Anduril Industries, and Boeing.
Its product base extends beyond drones to include counter-drone technology, rocket propulsion, space systems, and satellite ground infrastructure, providing meaningful diversification across defense sectors.
Wood has reportedly timed many of her Kratos purchases after share price dips, suggesting a deliberate strategy to accumulate a high-growth defense name at discounted entry points.
