Kratos Defense Stock Soars: Here’s Why It Crushed the Market on Monday

Defense stocks aren’t usually the flashiest plays—but Kratos just pulled off a market-beating rally. Here’s what lit the fuse.

The catalyst? Pure asymmetric warfare.

No earnings bombshell or contract win. Just old-fashioned sector rotation as defense ETFs got a sudden inflow of 'safe haven' cash—while tech investors scrambled for cover.

Short squeeze or sustainable momentum?

Traders piled in after early volume spikes, but skeptics note defense stocks often run hot before Pentagon budget debates. Either way, Kratos rode the wave better than peers.

Funny how 'national security' always gets funded… while crypto regulation crawls at bureaucratic speed. Priorities, right?

Time to go on offense with this defense stock

Those bullish adjustments from pundits started flowing in on Friday, following Kratos' earnings release, and continued into the new week.

Image source: Getty Images.

Monday morning, both B. Riley and Noble Capital lifted their price targets on the defense stock and steadfastly maintained their equivalent of buy recommendations. The former's Mike Crawford now feels the stock is worth $72 per share, well up from his previous fair value assessment of $55. Joe Gomes from the latter company hiked his price target by 25% to $75 per share from $60.

As if to put an exclamation point on Kratos' solid second-quarter performance, one researcher even initiated coverage with its own buy rating. This was Cannacord Genuity's Austin Moeller. Essentially in line with his two peers, he believes the company's shares could reach a price of $74 apiece.

Lingering bullishness

We can't really blame any investor or analyst for being optimistic about Kratos' future, given how satisfying some of those quarterly figures were. One that particularly stood out was the company's 17% year-over-year rise in sales, which is considerable for a company that's large and well established in its market.