Almonty Industries, Deutz, and GFT: Strong Upside Potential Thanks to Tungsten, Defense, and AI

Almonty: On the Path to Becoming the Western World's Leading Tungsten Producer

Shareholders have been waiting a long time for this moment. In June, Almonty Industries began processing tungsten ore at the new processing plant at the Sangdong Mine to produce marketable concentrate. This marks the transition from years of construction and financing to an operational business.

The timing could hardly be better. China accounts for more than 80% of global tungsten production and has restricted exports of this strategic metal. The US plans to stop procuring Chinese tungsten for defense purposes starting in 2027. This extremely hard and heat-resistant metal is needed for applications including ammunition, armor, tools, semiconductors, and electronics.

A stockpile of approximately 139,700 metric tons of ore, averaging 0.25% tungsten trioxide, is already available for the ramp-up. This corresponds to about 2.6 months of production in Phase I. Almonty estimates the gross value contained therein at approximately USD 68 million at current prices. This does not yet represent revenue, let alone profit, but it underscores the scale of the immediately available material. The existing operation in Portugal is also providing a boost. In the first quarter, revenue jumped 221% to USD 25.4 million. Adjusted EBITDA turned from a loss of USD 2.4 million to a profit of USD 6.1 million, and operating cash flow reached USD 9.7 million. These figures still stem primarily from the Panasqueira Mine and demonstrate the leverage that high tungsten prices can generate.

The market has already largely priced in this new level of growth. At the current price of around USD 14, Almonty still has a market capitalization of over USD 4 billion. Since the start of the year, the share has nevertheless risen by over 60%. However, the shares are still more than 40% below the 52-week high of USD 24.41 reached in April. This leaves room for upside, especially since nearly all of the revenue in 2025 came from the Panasqueira Mine and Sangdong is practically not yet included in the historical figures.

The extended offtake agreement with Global Tungsten & Powders, a company within the Austrian Plansee Group, provides additional planning certainty. The term was extended from 15 to 21 years, and the volume was increased by 40% to 4.41 million MTU. At the same time, prices for Almonty have improved by approximately 6.3%. The contract covers approximately 90% of planned Phase I production. At current tungsten prices, the minimum purchase volume would correspond to annual contract revenue of approximately USD 490 million, according to the company. The planned doubling of capacity in Phase II is not yet included in this figure.

Financially, Almonty has ample leeway following the placement of a convertible senior notes offering worth USD 800 million. The 2.25% coupon is favorable, and the initial conversion price is USD 27.40. In the latest video, "Almonty Industries: The USD 800 Million Bet on Tungsten," CEO Lewis Black explains how the fresh capital will be used. In addition to ramping up and expanding Sangdong, the focus is on developing the Panasqueira mine in Portugal, the Gentung project in Montana, and potential other strategic assets. At the same time, Black puts the USD 800 million convertible senior notes offering and the geopolitical race for a tungsten supply independent of China into context.

https://youtu.be/H89AmF0rjfA

The next test comes as early as August 12 with the release of the Q2 results. Analysts expect, on average, USD 35.3 million in revenue and USD 0.05 in earnings per share. For the full year, the consensus is for USD 244 million in revenue and earnings per share of USD 0.39. All four analysts currently covering the company recommend buying the stock. The average price target is USD 24.63, representing a potential gain of over 70%. However, these earnings estimates assume that Sangdong will significantly accelerate revenue growth in the second half of the year. The next sustained surge in the share price must therefore come from production volumes, shipments, and cash flow. If the company stays on track, Sangdong has the potential to make Almonty one of the most strategically important tungsten producers in the Western world. The bottom line is that Almonty remains a speculative stock with high upside potential, offering risk-tolerant investors the most exciting and direct investment in a Western tungsten supply. Due to high volatility, new positions should ideally be built up in stages.

DEUTZ Reaches New Heights with Military Wild Card

The Cologne-based engine manufacturer Deutz shifted into high gear in terms of growth during the second quarter. Revenue climbed 13% to EUR 585 million, while order intake rose by just under 15% to EUR 560 million. Adjusted EBIT performed even better, jumping 41% to EUR 42.4 million. The full-year forecast of EUR 2.3 to 2.5 billion in revenue and an adjusted EBIT margin of 6.5% to 8% was confirmed. For 2026, analysts expect revenue of EUR 2.41 billion and earnings per share of EUR 0.94.

The planned billion-euro acquisition of FFG is fueling further optimism. The military vehicle manufacturer is expected to contribute more than EUR 1 billion in revenue as early as 2027, with an operating margin exceeding 20%. Deutz is thus likely to achieve its 2030 targets of EUR 4 billion in revenue and a 10% margin "well ahead of schedule." The acquisition, however, does not come cheap. Deutz is paying EUR 1.6 billion for the deal and plans to pay approximately EUR 1 billion in cash—no small sum. Although free cash flow over the past twelve months of EUR 71.4 million was solid, it is not sufficient for a major acquisition.

On August 24, shareholders will therefore vote on a capital measure through which the Rhineland-based company intends to partially finance the deal. This will increase the number of shares and dilute existing shareholders. In addition, debt will rise significantly. Already, the company has debts totaling EUR 450 million, offset by only EUR 65 million in cash and cash equivalents. However, if the company secures the financing and successfully closes the deal, FFG will provide a strong operational boost. As early as 2027, the new subsidiary is expected to contribute more than EUR 1 billion in revenue with a margin exceeding 20%.

Also noteworthy recently were the insider purchases by the Executive Board and Supervisory Board totaling around EUR 1.7 million. CEO Sebastian Schulte alone invested a good EUR 1 million in Deutz shares. This is a strong signal of confidence. Fundamentally, Deutz shares remain moderately valued despite its strong earnings momentum. The P/E ratio based on the next twelve months stands at just under 9, compared to the industry median of around 15. Deutz is also trading at a discount based on the expected EV/EBITDA of 5.6. All seven analysts currently covering Deutz recommend buying the stock. Bernstein upgraded the stock to "Outperform" following the half-year results. However, consensus estimates for revenue and earnings were recently lowered slightly. If FFG is acquired as planned, the stock will also gain a significant defense sector wild card. Deutz is an exciting German small-cap stock with potential.

GFT: AI Beneficiary with Comeback Potential

At software specialist GFT, the AI narrative is driving the numbers. Half-year revenue rose 5% to EUR 462.6 million, adjusted EBIT by 8% to EUR 32.6 million, and pre-tax profit by 26% to EUR 24.0 million. The order backlog was 18% higher than the previous year. GFT is also increasingly benefiting from its in-house AI platform, Wynxx, which is now used by 113 companies in twelve countries.

The broad regional footprint reduces dependence on Germany. In 2025, just under 59% of revenue came from the Americas, the United Kingdom, and the Asia-Pacific region, while 41% came from Continental Europe. Brazil was the largest single country market at just over 20%, while Germany accounted for just under 13%. The gross margin reached 84.9%. However, with an operating margin of 7.9% and a net margin of 3.7%, GFT fell below the respective industry medians—the additional AI business has yet to prove its earnings leverage.

For the full year, GFT continues to target revenue of around EUR 930 million and adjusted EBIT of EUR 71 million. At the half-year mark, the Group generated EBIT of EUR 33 million on revenue of EUR 463 million. In terms of earnings momentum, the company will therefore need to step up its efforts in the second half of the year. The valuation, however, is moderate. The P/E ratio of around 13 is slightly above the industry median. With an EV/revenue ratio of 0.68 compared to 0.89 for the industry, GFT is trading at a discount. The balance sheet is not debt-free, however: cash and cash equivalents of EUR 42 million were recently offset by financial liabilities of EUR 143 million.

The current share price of around EUR 23.65 is just under 25% above the start of the year and close to the 52-week high of EUR 24.95. All seven analysts covering the company recommend buying the stock. The average price target is EUR 29. The experts at NuWays even consider a price target of EUR 32 to be achievable—representing potential of around 35% from current levels. If the company succeeds in converting its order backlog into profitable growth and sustainably improving its previously below-average margins through AI-driven growth, GFT's stock has further upside potential. The shares also look promising from a technical analysis perspective.

Conclusion: Three Exciting Stocks with Different Risk Profiles

All three companies are capitalizing on major market trends but face very different challenges. Almonty offers the greatest leverage for potential price gains with the ramp-up of Sangdong, but it also remains the most speculative stock. For Deutz, the financing and integration of the FFG acquisition must succeed for the stock to realize its full upside potential. GFT, as a moderately valued AI beneficiary, offers the most balanced risk-reward profile of the trio.