A 900% Increase in Funding for Key Defense Program Triggers Buy Signal

October 1 doesn’t just signal the arrival of fall, the start of the spooky season, and the chase for the World Series. 

It’s also the start of the U.S. government’s fiscal year — something we’re grossly reminded of every time a small group of politicians attempt to shut down our government for sport. 

For me, that means scrutinizing our annual defense budget as it rolls through Congress.

This year, there’s a lot to look at because our government allocated $826.45 billion in new discretionary spending, which is $285.87 million over the president's budget request and $28.71 billion — or 3.6% — higher than the FY23 total.

You’re not going to make any money just gazing at the headline number, though. 

You’ve got to drill down into the programs — and specifically, the R&D programs. 

That’s what gives the biggest clues about spending trends and where to invest. 

For example, one eye-popping increase in funding involves something I call “Project Wingman.”

Project Wingman is an effort to pair manned fighter jets with drones, or what the Pentagon is calling collaborative combat aircraft (CCA).

It’s been in the testing phase for a while, and now having proven itself, it’s set to get a massive increase in funding. 

Indeed, the Pentagon is now pouring $522 million into Project Wingman, up from a scant $52 million in FY23. 

That’s a 904% increase that will cover the cost of developing the platform itself, developing the autonomous programming that will fly the drones, and the creation of an experimental operations unit for pilots to practice and train alongside their new robot wingmen.

Just to start, the service is buying 1,000 units as it works to determine basing needs, organizational structures, sustainment, and other aspects of the program.

And once that’s all sorted out, we’ll undoubtedly see more funding increases and a higher rate of acquisition in years ahead.

Remember, the key to this program is the relative affordability of drones compared with the exorbitant cost of a fifth generation fighter. 

We’re talking about $5 million–$15 million per unit, versus $70 million–$80 million for an F-35.

The whole point is to grow the strength and size of our Air Force to maintain an advantage over near-peer adversaries like Russia and China.

“We cannot afford complacency, nor can we afford an Air Force composed largely of fighters that cost as much as our fifth-gen aircraft,” Kristyn Jones, the acting undersecretary of the Air Force, said recently. 

Additionally, investing tens of millions of dollars in drones could actually save the Pentagon and the American taxpayer hundreds of millions of dollars down the line, as the smaller attritable drones make their more expensive manned counterparts more survivable. 

That is, by flying alongside or out ahead, assisting manned fighters with target acquisition or threat neutralization or even acting as a diversion, these drones could save dozens or even hundreds of manned fighters from being shot down along with their pilots.

So this is a huge opportunity — not just for the military but for investors. 

And I’m happy to report that it’s still in its very earliest stages.

So do yourself a favor and check out my full report on Project Wingman — and the company most likely to benefit from all this increased funding — right here.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is an Editor of Wealth Daily and Investment Director of Secret Stock Files, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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