Money is pouring into drone warfare tech, which is good news for small defense suppliers but a reminder that the world is rearming fast.

• Alex Karp of Palantir is set to be the first big investor in a new defense fund run by Ukraine's former defense minister, who wants to build drones for the U.S. in exchange for Patriot missiles.
• Old-line contractors like Raytheon and L3Harris have resisted licensing their tech to Ukraine over theft fears, so Ukraine is building its own instead.
• Russia's new jet-powered attack drones fly three times faster than the old propeller ones, and Ukraine is struggling to shoot them down.
• Kratos is a small player making jet engines for missiles and drones, plus cheap laser and microwave systems to knock drones out of the sky for pennies instead of millions.
• Kratos burns cash and the stock looks expensive after a meme-style run-up, though it raised money at the top and has a solid balance sheet.

Outlook: Defense spending is set to climb across Europe, Canada and the U.S. as Russia, China, Iran and North Korea rearm, but Kratos shares may need to fall a lot further before they are worth buying.