Buy Drone Stocks Now? Rheinmetall, Steyr Motors and Volatus Aerospace Target a Billion-Dollar Market

Volatus Aerospace: New Orders on the Horizon?

Canada is currently significantly ramping up its defence spending. In the 2025/26 financial year, defence expenditure stood at more than CAD 63 billion, reaching the NATO benchmark of 2% of gross domestic product for the first time in decades. CAD 6.6 billion alone is set to be channelled into strengthening the domestic defence industry over the next five years. A further CAD 6 billion is being made available by the state-owned Business Development Bank of Canada for companies in the defence and national security sectors. In the long term, Canada aims to increase its defence and security spending to 5% of GDP by 2035.

One element of these measures is the Defence Drone Initiative (DDI). Launched in July 2026, it is designed to accelerate the development, testing, adaptation and production of unmanned and autonomous systems. At the same time, the initiative aims to build up domestic technological and industrial capabilities and reduce Canada's dependence on foreign suppliers. Through a dedicated marketplace, pre-vetted companies can bid on future contracts with the Canadian Armed Forces and the Coast Guard. Volatus Aerospace intends to benefit from this in future. This is because, in addition to civilian applications such as the monitoring of pipelines and forests, the drone specialist also offers solutions in the military sector.

Volatus Aerospace was selected last week as a qualified supplier for the Defence Drone Initiative (DDI) Marketplace. The company sees its inclusion in the supplier pool as confirmation of its previous investments in technology, production capacity, operational expertise and partnerships. In particular, Volatus is relying on its innovation and production centre in Mirabel and its control centre in Vaughan, and aims to offer the development, manufacture, integration and operation of unmanned systems from a single source in future.

This marks a significant acceleration in Volatus's growth story. The company generated revenue of around CAD 14.05 million in the first half of 2026. While this figure is still modest, the trend is upwards. Revenue in the second quarter was around 50% higher than in the first quarter. Management has indicated that new procurement programs in Canada, as well as major NATO and defence projects, could lead to higher order intake in the foreseeable future. The company has repeatedly highlighted a pipeline worth over CAD 500 million. Speculating on new orders in the coming months could prove interesting.

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Rheinmetall Aims for a Share of the Drone Market

Rheinmetall not only aims to play a leading role in heavy military equipment but also to establish itself in the growing drone market. To this end, Germany's largest defence contractor is focusing on the detection and countering of enemy aircraft, as well as the development of its own unmanned systems. Two recent announcements demonstrate the breadth of Rheinmetall's coverage in this field.

To protect airports and critical infrastructure, the Düsseldorf-based company offers a modular drone defence system. Radar, radio, acoustic and camera systems such as Skyspotter are designed to detect even small or radio-silent aircraft and integrate their movements into a digital situational picture. Depending on the threat, jammers, interceptor drones, lasers or conventional air defence systems can then be deployed. Together with Deutsche Telekom, Rheinmetall is also investigating the use of mobile phone masts for comprehensive radio direction-finding. However, for wider deployment, the responsibilities and legal powers of the authorities must also be clarified.

At the same time, Rheinmetall is working on the development of its own drones. There has recently been an update on the LUNA NG reconnaissance drone. The unmanned system reaches an altitude of up to 5,000 m, carries payloads exceeding 30 kg, and remains airborne for more than 12 hours. The Bundeswehr Aviation Authority has now granted the system provisional airworthiness certification, meaning the armed forces can already carry out training and test flights independently. As part of the testing program, the LUNA NG has completed around 150 flights and 200 flight hours. Further tests are still required before full type certification is granted, but Rheinmetall has thus taken an important step towards the regular deployment of its military drone in European airspace.

Unfortunately, Rheinmetall does not disclose specific turnover figures for drones and drone defence systems but can already point to concrete orders. The framework contract for the FV-014 loitering munition is in the billions. The Bundeswehr has drawn down around EUR 250 million from this first tranche for the kamikaze drone. In addition, the Bundeswehr has ordered 13 LUNA NG units worth around EUR 200 million.

Steyr Motors: Back on the Road to Success with USVs?

Recently, Steyr Motors has been overshadowed by the failed takeover attempt and profit warnings. Could the drone hype give the shares of this specialist engine manufacturer a new boost? The Austrian company is focusing not on the air, but on the water. Steyr does not develop complete naval drones itself, but instead supplies compact diesel engines and propulsion solutions for these platforms. According to the company, the engines are already being used in USV applications. In its investor presentation for the first half of 2026, Steyr Motors also names several potential major projects with customers that have not yet been disclosed. The USV business is therefore expected to become an additional sales market alongside traditional marine and military vehicles.

The acquisition of the Danish marine engine manufacturer BUKH, which Steyr Motors completed in April 2026, plays an important role in this. BUKH is particularly well known for SOLAS-certified engines for rescue and military patrol boats and complements Steyr Motors' existing product portfolio. The combined power range extends from small engines for compact USV platforms to more powerful propulsion systems for larger watercraft. Overall, Steyr Motors is able to cater to a broad spectrum of USV applications. The USV business offers significant potential, but it must first prove its economic significance through binding orders and concrete call-offs. Following the severe profit warning, the Steyr share is attempting to find a floor between EUR 27 and EUR 30. This values the company at approximately EUR 153 million.

Volatus Aerospace is arguably one of the more interesting drone plays. The company has taken an important step forward with its market authorisation. Revenue and order intake are expected to pick up noticeably in the second half of the year. The share is therefore of interest. At Rheinmetall, the drone division plays a very minor role. Even larger orders will not change this in the foreseeable future. Steyr has squandered a great deal of trust. A sustained upward trend will likely require more than just the odd order here and there.