Cerebras, Volatus Aerospace, Standard Lithium: 3 Markets Poised for a Breakthrough

Cerebras: Billions for the Next Stage of AI Expansion

The AI boom is also hitting Europe with full force. The US company Cerebras Systems has now announced, in partnership with Compute Nordic Finland, a new AI data centre in Mikkeli, Finland. The facility is designed to allow its capacity to be increased in several phases.

Operations will initially start with a capacity of 50 MW, then be increased to 80 MW, and are set to reach 165 MW in the final phase. Great attention was paid to sustainability during the project's planning. The servers are cooled via a closed-loop system, which significantly reduces water and energy consumption. The waste heat generated during operation is also fed directly into the local grid, thereby benefiting the local community. The project is expected to bring between EUR 1.0 and 1.7 billion in investment to the region. In addition, it is expected to create between 80 and 250 new permanent jobs for technical specialists.

These positive operational developments prompted the investment company ARK, led by Cathie Wood, to buy Cerebras shares. In total, just over 93,000 shares, valued at approximately USD 17.3 million, were acquired. To free up capital for this move, ARK sold off other technology shares. Among other things, shares in the established chip manufacturer Advanced Micro Devices were sold for USD 3.47 million. Positions in companies such as Twist Bioscience, Tempus AI and Roblox were also reduced. These transactions suggest that the fund manager is adjusting its strategy. Capital is being withdrawn from older or existing investments and instead channelled specifically into newer companies in the field of artificial intelligence.

Volatus Aerospace: The Door to Canada's Defence Billions Is Opening

At Volatus Aerospace, the transformation from a drone service provider to an integrated aerospace and defence platform is taking shape. The latest milestone is of great significance in this regard. Volatus has been included in the supplier pool for the Canadian Defence Drone Initiative. This means the company can compete for future contracts through 2031 for autonomous systems, counter-UAS, data and communications solutions, integration, testing and training. While inclusion does not yet guarantee revenue, it does give Volatus direct access to an accelerated government procurement process.

The groundwork for larger contracts has already been laid. In June, Volatus opened a production and integration facility in Montréal-Mirabel covering approximately 4,924 m², where autonomous systems are manufactured for commercial and military customers. At the same time, the company's operational business is developing dynamically. In the second quarter, revenue rose by 49.5% compared with Q1 to CAD 8.42 million, with services increasing 59% and equipment 38%. With CAD 59.2 million in cash, Volatus also has the highest level of liquidity in its history.

This combination makes the Volatus story an interesting one. The existing business in pipeline, energy and infrastructure monitoring provides a commercial foundation, whilst the defence sector could provide significant growth potential. With V-Cortex, Volatus is developing its own autonomy technology, while partnerships are broadening its offering. Kraus Hamdani Aerospace, for example, is contributing the K1000ULE for long-endurance reconnaissance and resilient communications. At the same time, with Canary, Volatus possesses one of the first systems accepted by Transport Canada for BVLOS operations over populated areas with integrated detect-and-avoid capability.

Added to this is the international perspective. Volatus has already reached the next evaluation phase of the US Drone Dominance Program. If the company now succeeds in utilizing the new production base to full capacity and securing larger series orders from government programs, its revenue profile could change fundamentally. Volatus is still loss-making, but its manufacturing capabilities, software, operational expertise and access to defence procurement programs are increasingly coming together to form an integrated platform.

Standard Lithium: The Next Step

Reliable storage capacities are becoming increasingly important in this market, and light metals are essential to achieving them. The raw materials specialist Standard Lithium recently secured a supply contract with LG Energy Solution through its joint venture, Smackover Lithium. Under the agreement, 8,000 tonnes of lithium carbonate per year, of a quality suitable for battery production, are to be supplied. The contract runs for 10 years and will commence as soon as production begins as part of the South West Arkansas (SWA) Project. Production is scheduled to start in 2029. Financial details have not been disclosed. For Standard Lithium, this is the second major customer this year.

The company has now contractually secured approximately 90% of the planned production volume for the first expansion phase of 22,500 tonnes per year. The remaining volume is to be allocated soon via a further, smaller contract. These firm supply contracts are an essential prerequisite for the forthcoming project financing. The company plans to raise more than USD 1 billion in debt financing through export credit agencies. The final investment decision is expected to be made before the end of this year, after which the construction phase is set to begin immediately.

Jefferies has recently initiated coverage of the shares and recommends holding them. The target price set is USD 2.90, while the share price was most recently just under USD 2.50. Jefferies highlights positively that the USD 225 million in government grants from the US Department of Energy, as well as the existing partnerships, are regarded as a solid foundation.

Nevertheless, there are challenges that must be overcome before production begins. These include the successful scaling up of the plant to industrial scale, the finalization of project financing, and the unpredictable development of global market prices for lithium. With this neutral rating, Jefferies is well below the market average, which currently favours a strong "Buy" recommendation with significantly higher price targets of between USD 4.70 and USD 5.76.

Cerebras, Volatus Aerospace and Standard Lithium represent three markets currently attracting substantial investment. With its billion-dollar project in Finland, Cerebras aims to expand its position in the AI infrastructure market and is receiving a boost from ARK's investment. Through the Defence Drone Initiative, Volatus Aerospace is opening the door to government contracts and could utilize its new production base with high-margin defence business. Standard Lithium has already secured contracts for around 90% of the planned production for the first phase of expansion, thereby fulfilling a key prerequisite for financing and the start of production.