--- title: "Kratos and Airbus flew the Valkyrie in Europe; Kratos says it can build 10,000 engines a year, with no buyer" description: "Kratos and Airbus flew the U740-Valkyrie over Northern Europe and Kratos ordered parts for 3,000 engines, both pointed at 2029. Neither release carries a priced order, the stock touched a 52-week low this week, and ARK is buying." publisher: "The Inference" section: "Hardware" published: 2026-10-12T21:26:31.778Z modified: 2026-10-12T21:26:31.778Z canonical: https://theinference.org/article/kratos-and-airbus-flew-the-valkyrie-in-europe-kratos-says-it-can-build-10-000-engines-a-year-with-no-buyer language: en keywords: "Kratos Defense, Airbus, Defense, Drones, Stocks, ARK Invest" --- # Kratos and Airbus flew the Valkyrie in Europe; Kratos says it can build 10,000 engines a year, with no buyer > Kratos and Airbus flew the U740-Valkyrie over Northern Europe and Kratos ordered parts for 3,000 engines, both pointed at 2029. Neither release carries a priced order, the stock touched a 52-week low this week, and ARK is buying. ## The drone left the ground without a runway On October 12, 2026, Kratos Defense & Security Solutions (NASDAQ: KTOS) and Airbus [announced the first European flight of the U740-Valkyrie](https://www.airbus.com/en/newsroom/press-releases/2026-10-airbus-u740-valkyrie-uncrewed-combat-aircraft-takes-off-for-its-maiden-flight-in-europe), an uncrewed combat jet that rose off a rocket-assisted rail needing no runway, manoeuvred at altitude, reached Mach 0.8 and changed its mission in flight [1][2]. Every planned objective was met [1][2]. The companies say the flight keeps them on track to deliver a combat-ready collaborative combat aircraft to Germany and other European air forces by 2029 [1][2]. Airbus's MARS software is the machine's "European brain", with a human kept on the loop [1][2]. Airbus Defence and Space chief Mike Schoellhorn sold the pairing as "affordable combat mass": a "program of record" airframe matched to a sovereign European mission system [1][2]. The aircraft is real hardware, roughly three tonnes at take-off with a range beyond 5,000 kilometres and an internal weapons bay [2]. ## Same morning, a promise of 10,000 engines a year [Kratos's](https://theinference.org/markets/companies/kratos-defense) [second release](https://finance.yahoo.com/technology/articles/kratos-highlights-recent-successful-flight-132000391.html) celebrated its J85 turbojet, the small engine that powers low-cost cruise missiles, decoys and drones, flying in lugged, palletized and surface-to-surface launches [3]. It then put numbers under the mass story: long-lead component orders to build more than 3,000 engines in 2027, and a factory Kratos says can turn out over 10,000 a year by 2029, against what the release calls urgent Department of War demand, the renamed Pentagon [3]. Neither release contains a customer contract, a price or a delivery schedule for the European drone or the engine line [1][3]. [Trade coverage of the flight](https://www.aerotime.aero/articles/airbus-u740-valkyrie-combat-drone-first-flight-europe) noted the announcement "does not refer to a contract from any customer" [4]. The 3,000-engine order is Kratos buying parts ahead of demand it describes but does not price [3]. No customer has yet paid for a production Valkyrie or a production J85 [1][3][4]. ## Three rivals are chasing the same German contract Germany's accelerated uncrewed-combat-aircraft program has rival bidders too: Rheinmetall with Boeing's MQ-28 Ghost Bat, [General Atomics' YFQ-42A](https://theinference.org/article/anduril-and-general-atomics-are-building-america-s-robot-fighters-on-their-own-dime) and Helsing's CA-1 [4]. Any of them could take the German award the Valkyrie is being pitched for [4]. ## A 52-week low meets a $6.7 million buy The stock touched [a 52-week low of $41.72 on October 7](https://au.investing.com/news/stock-market-news/kratos-defense--security-solutions-stock-hits-52week-low-at-4172-93CH-4677616), is down 21.2% over three months, in step with a 21.5% slide across aerospace-defense equipment, and has lost about 58% over a year [5][6][7]. Cathie Wood's ARK went the other way, [buying 159,918 shares worth about $6.7 million on October 8](https://www.thestreet.com/investing/cathie-wood-spacex-stock-sale) after roughly 100,523 shares two days earlier, funded partly by selling [SpaceX](https://theinference.org/markets/companies/spacex) and [AMD](https://theinference.org/markets/companies/amd) [8]. Analysts kept buy ratings through the drop, with targets from $68 to $135 [7]. *Chart: **Kratos quarterly revenue hit a twelve-quarter high of $458.8M in Q2 2026** Line chart: Kratos quarterly revenue climbs from about $275M in Q3 2023 to $458.8M in Q2 2026, the highest of the twelve quarters shown.* *Quarterly revenue, US$ millions, as reported in Kratos's SEC filings; labels are calendar quarters, Q3 2023 to Q2 2026. The stock's 52-week low of $41.72 came on October 7, 2026, in the quarter after the last point [6][7]. [10][6][7]* ## Record revenue, bookings that barely moved The bulls have receipts: [second-quarter revenue was $458.8 million, up 30.5%](https://finance.yahoo.com/markets/stocks/articles/kratos-ktos-down-13-7-153016346.html), and full-year guidance rose to between $1.75 billion and $1.81 billion [9]. But bookings of $492.2 million left the quarter's book-to-bill at 1.1, bookings about matching revenue, and the quarter still ran a $1.6 million operating loss while the first half consumed $38.4 million of operating cash [9]. *Chart: **Record-revenue Q2 2026 was Kratos's first operating loss in eight quarters** Column chart in two series across eight quarters from Q3 2024 to Q2 2026: Kratos operating income runs between $3.0M and $8.2M and then falls to a $1.6M loss in Q2 2026, while operating cash flow swings from a $45.6M inflow to outflows of up to $29.2M.* *Quarterly operating income and operating cash flow, US$ millions, as reported in Kratos's SEC filings, Q3 2024 to Q2 2026. Q2 2026 booked a $1.6M operating loss on record revenue; the first half of 2026 consumed $38.4M of operating cash [10]. [10]* ## What the third-quarter report has to prove Neither 2029 target can be checked until a contract reaches the filings [1][3]. A German award or a production engine order would surface as funded backlog (orders the customer has paid for) above the current $1.57 billion, and a book-to-bill above 1.1 [9]. Kratos holds $1.44 billion in cash to keep building ahead of both [9]. Until one of those numbers moves, the flight and the factory remain Kratos's own bet, with ARK holding the same position [8]. ## Takeaway Airbus and Kratos flew the U740-Valkyrie in Europe and Kratos ordered parts for 3,000 engines, but neither release carries a priced order; until a German award or a production engine contract reaches the filings, a 52-week-low stock and ARK's $6.7 million buy are the only money behind the 2029 targets. ## Sources 1. [Kratos Defense via Yahoo Finance (GlobeNewswire), Airbus U740 Valkyrie Uncrewed Combat Aircraft Takes off for First European Test Flight, 12 October 2026](https://finance.yahoo.com/technology/articles/airbus-u740-valkyrie-uncrewed-combat-091500120.html) 2. [Airbus press release, Airbus U740 Valkyrie uncrewed combat aircraft takes off for its maiden flight in Europe, 12 October 2026](https://www.airbus.com/en/newsroom/press-releases/2026-10-airbus-u740-valkyrie-uncrewed-combat-aircraft-takes-off-for-its-maiden-flight-in-europe) 3. [Kratos Defense via Yahoo Finance (GlobeNewswire), Kratos Highlights Recent Successful Flight Tests of the J85 Engine Across Multiple Configurations, 12 October 2026](https://finance.yahoo.com/technology/articles/kratos-highlights-recent-successful-flight-132000391.html) 4. [AeroTime, Airbus U740 Valkyrie combat drone completes first flight in Europe, 12 October 2026](https://www.aerotime.aero/articles/airbus-u740-valkyrie-combat-drone-first-flight-europe) 5. [Zacks Investment Research via TradingView, Kratos Defense Drops 21.2% in 3 Months: Time to Buy or Stay Cautious?, 11 October 2026](https://es.tradingview.com/news/zacks:91f773755094b:0-kratos-defense-drops-21-2-in-3-months-time-to-buy-or-stay-cautious/) 6. [Investing.com Australia, Kratos Defense & Security Solutions stock hits 52-week low at $41.72, 10 October 2026](https://au.investing.com/news/stock-market-news/kratos-defense--security-solutions-stock-hits-52week-low-at-4172-93CH-4677616) 7. [Investing.com Canada, Kratos Defense & Security Solutions stock hits 52-week low at $41.72, 7 October 2026](https://ca.investing.com/news/stock-market-news/kratos-defense--security-solutions-stock-hits-52week-low-at-4172-93CH-4869974) 8. [TheStreet, Cathie Wood sells $4.7 million in surging tech stock after rally, 9 October 2026](https://www.thestreet.com/investing/cathie-wood-spacex-stock-sale) 9. [Zacks Equity Research via Yahoo Finance, Kratos (KTOS) Down 13.7% Since Last Earnings Report: Can It Rebound?, 3 September 2026](https://finance.yahoo.com/markets/stocks/articles/kratos-ktos-down-13-7-153016346.html) 10. [Kratos Defense, quarterly figures from its SEC filings, retrieved 12 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001069258) --- Kratos and Airbus flew the Valkyrie in Europe; Kratos says it can build 10,000 engines a year, with no buyer — The Inference. Canonical: https://theinference.org/article/kratos-and-airbus-flew-the-valkyrie-in-europe-kratos-says-it-can-build-10-000-engines-a-year-with-no-buyer