The defense industry is seeing a shift as new, high-tech companies like drone maker Kratos Defense & Security Solutions Inc. and data analytics company Palantir Technologies Inc. gain ground alongside traditional military contractors. Changes in warfare, increased global military spending, and a push for technology innovation are driving this transformation. Despite high valuations and some growing pains, these companies are attracting investors looking for high-risk, high-reward opportunities. The shift towards technology-focused defense contractors is expected to continue as governments prioritize advanced weapons systems over traditional equipment.

Read more at Yahoo Finance: Shift in Modern Warfare Turns Defense Firms Into Growth Stocks