The defense technology specialist Kratos Defense is attracting renewed investor attention following a strategic partner’s unexpected move into the energy sector. The company’s recent expansion into new industrial gas turbine markets and a significant scaling of its manufacturing footprint are viewed as potential accelerants for its growth trajectory.
Operational Expansion Underway
Alongside strategic partnerships, Kratos is actively broadening its operational capacity. A series of new facility openings in late 2025 are set to substantially boost its production and service capabilities:
* A new maintenance workshop for PT6 engines has commenced operations in Vancouver, British Columbia.
* The Microwave Electronics Division in Jerusalem has relocated to a state-of-the-art complex featuring 20,000 square feet of clean room space.
* A new manufacturing site in Auburn Hills, Michigan, has launched production of Spartan turbojet engines, targeting an annual output exceeding 50,000 units.
These investments underscore Kratos’s strategic commitment to meeting rising demand across its business segments, spanning from engine maintenance to high-frequency electronics. After a strong yearly performance, the shares are currently trading around €62, marking a significant recovery from their annual low, though they remain well below the peak reached in October. Forthcoming quarterly results will be scrutinized for early signs of revenue impact from these new initiatives.
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Strategic Partnership Provides Validation
A key catalyst for the heightened market interest is the announcement from Boom Supersonic. The company aims to raise $300 million to fund the development of gas turbines for data centers. This development holds direct relevance for Kratos Defense, as its subsidiary Florida Turbine Technologies (FTT) was selected as the design and manufacturing partner for the initial turbine units back in 2022. This alliance highlights Kratos’s technical expertise beyond its core defense business, providing an entry point into the commercial industrial gas turbine market. CEO Eric Demaro had previously alluded to a contract with a “known tech industrial” in this sector during the third quarter of 2025—the Boom Supersonic news now offers concrete validation of that hint.
Wall Street Weighs the Prospects
These developments are being closely monitored by financial analysts. Truist Securities reaffirmed its “Buy” rating with a $125 price target. The firm’s researchers point to Crusoe AI’s planned procurement of 29 supersonic turbines as an additional, and previously underappreciated, growth driver for Kratos. Earlier in December, B. Riley upgraded its rating to “Buy” with a $105 price target, emphasizing the company’s proprietary intellectual property as a valuable asset. Adopting a more cautious stance, Jefferies maintains a “Hold” rating, having lowered its price target to $85, citing risks associated with near-term execution.
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