Teal Drones is one of 19 companies selected for Gauntlet II of the Pentagon's Drone Dominance Program, competing for contracts of up to 60,000 units.
Teal Drones is one of 19 companies selected for Gauntlet II of the Pentagon's Drone Dominance Program, competing for contracts of up to 60,000 units.

Teal Drones is one of 19 companies selected for Gauntlet II of the Pentagon's Drone Dominance Program, competing for contracts of up to 60,000 units.
Red Cat Holdings' Teal Drones advanced to Gauntlet II of the Pentagon's Drone Dominance Program, joining 18 other companies in a competition that could yield contracts for as many as 60,000 drones.
"Advancing to Gauntlet II is an honor and a meaningful validation of the work our Teal team is doing to deliver trusted, mission-ready systems for the warfighter," Jeff Thompson, chief executive officer of Red Cat, said.
The Phase 2 Qualifier at Camp Grayling, Michigan, in June tested about 79 unique drones from 49 companies across Long Range Strike and Tactical Assault in Close Quarters missions. Gauntlet II is scheduled for August at Fort Carson, Colorado, where military personnel will evaluate the systems. Selected companies must first complete a production challenge — manufacturing and delivering 120 drones equipped with lethality payloads within five weeks.
The Drone Dominance Program represents the Pentagon's push to rapidly field affordable, scalable one-way attack drones. After Gauntlet II, the program plans to award contracts for up to 60,000 drones to top performers, a potential windfall for Red Cat, which has a short interest of 34 percent of float and a market value of about $1.3 billion.
Ukrainian defense-tech company General Cherry also advanced to Gauntlet II, underscoring the global nature of the competition. The Pentagon selected 19 finalists from an initial pool of 49 companies that included manufacturers from the U.S., Europe, and Asia.
Red Cat's advancement follows a string of positive developments for the company. In May, its Blue Ops Variant 7 uncrewed surface vessel entered full-rate production, and the company closed its acquisition of Quaze Technologies, adding wireless power transfer capabilities. Analysts have set a median price target of $20 for RCAT, with Roth Capital's Craig Irwin targeting $25 and HC Wainwright's Amit Dayal at $20. The stock trades well below those levels, suggesting the market has not fully priced in the potential of a Drone Dominance Program contract award.
BlackRock added 2.8 million shares of RCAT in the first quarter, a 31 percent increase in its position, while insider Paul Funk sold 165,000 shares for about $1.9 million over the past six months — a mixed signal that investors will weigh against the program's outcome.
This article is for informational purposes only and does not constitute investment advice.