The Boeing Company (NYSE:BA) shares are slightly higher on Friday as investors monitor developments in the defense contracting sector, including increased government spending on unmanned systems and artificial intelligence.

What Happened: The U.S. government has allocated $33 billion in direct spending on drones and AI for the Department of Defense, with $13.5 billion designated for unmanned systems and $16 billion for government-wide AI initiatives.

The military drone market is growing rapidly and is expected to reach $47 billion worldwide by 2032, according to Fortune Business Insights. As of 2023, North America holds about 36.1% of that market, and the U.S. alone is expected to reach $10.71 billion by 2030.

Boeing is positioning itself in this market segment. The company is developing a tiltrotor drone to work alongside Army helicopters in missions like combat and cargo transport. The unmanned aircraft can take ...