Combat Drones and Tungsten: Rheinmetall, Hensoldt and Almonty Industries at the Heart of the Defense Boom

Hensoldt and Rheinmetall: Defense Is in Demand

European defense conglomerates continue to operate in a market environment that has regained strength following a period of somewhat more significant consolidation. Hensoldt recently reported its figures for the first half of 2026. The results are certainly impressive. Order intake nearly doubled to EUR 2.81 billion. Revenue climbed by just under 24% to EUR 1.17 billion. Operating profit is also on a steep upward trajectory. Adjusted EBITDA grew to EUR 137 million. The stock market reacted positively across the board to Hensoldt's well-filled order book, pushing the stock higher and keeping it stable at over EUR 90.

A similar picture emerges for Rheinmetall. The Düsseldorf-based company has been riding a wave of success since early 2024, with only minor or moderate setbacks. The Canadian bank RBC recently rated the stock "Outperform." The price target stands at an impressive EUR 1,600. Even though the cancellation of the F126 frigate led to a minor adjustment in the revenue forecast, the growth story remains strong and intact. The stock is currently trading robustly in the range of EUR 1,110 to 1,200. A new partnership is particularly exciting. Rheinmetall and Boeing are collaborating on the "MQ-28 Ghost Bat." This is an unmanned combat drone, scheduled to be made operational for the German Armed Forces by 2029. Incidentally, Hensoldt is also part of this interesting and prominent industrial team as a sensor supplier.

Both companies are also benefiting massively from the far-reaching modernization programs of European NATO member states and complement each other technologically at the highest level. While Rheinmetall provides the urgently needed physical firepower with its armored vehicle systems, such as the Lynx infantry fighting vehicle or the Panther main battle tank, as well as state-of-the-art artillery ammunition, Hensoldt ensures digital superiority on the battlefield. The sensor specialist's advanced radar, jamming, and optronics systems are crucial for detecting and repelling enemy threats in real time in modern and increasingly networked conflicts.

Both companies have become indispensable pillars of the new European security architecture; as they increasingly collaborate to equip the same military platforms or benefit in parallel from major international contracts, they are also reaping a greater share of the rapidly growing defense budgets.

However, such state-of-the-art weapon systems and sensors share one fundamental commonality: they absolutely require rare and strategic raw materials. Tungsten, in particular, is indispensable for armor, ammunition, and electronics. Demand from the West continues to rise rapidly. This is also evident in the price of tungsten, which has multiplied within just a few months. So far, China has dominated this critical market. That is precisely why forward-thinking investors are now also turning their attention to producers who can guarantee a conflict-free supply outside of Asia.

Almonty Industries: Focused on the Future

One such urgently needed producer is Almonty Industries. The company is a producer and supplier of tungsten. The current geopolitical tensions in the Middle East and Ukraine, and wherever war breaks out or rages, make this metal indispensable to the entire defense and high-tech industries. To focus fully on its core operations during this critical phase, Almonty has recently streamlined its stock exchange listings somewhat.

Management has decided to voluntarily delist from two stock exchanges. The shares were already delisted from the Canadian TSX stock exchange as of the end of July 2026. The company will also soon leave the Australian ASX stock exchange. Trading will be suspended on August 28, before the official delisting on September 1, 2026.

The reasons for this are purely pragmatic. Trading volumes in Australia and Canada have recently been relatively low compared to those on the US Nasdaq exchange. Furthermore, the withdrawal reduces high administrative and internal compliance costs. Investors can, of course, continue to trade the stock seamlessly on the Nasdaq under the ticker symbol ALM or on the Frankfurt Stock Exchange. This step makes the company leaner and more agile.

Contractual Security and Financial Firepower

Almonty's fundamentals are currently performing well. In particular, the flagship project, the Sangdong Mine in South Korea, is gaining significant momentum. Historically, it is considered one of the largest and highest-grade tungsten deposits in the world. Following the successful start-up of the processing plant in July 2026, the company is now preparing for full capacity in the first phase of the project. Almonty recently announced a crucial amendment to its offtake agreement with Global Tungsten & Powders. This Pennsylvania-based partner is a key supplier to the US defense industry.

The term of the contract has been extended by 6 years, bringing the total to 21 years and extending it into the late 2040s. The contractually guaranteed volume increases by 40% to 4.41 million MTU of tungsten concentrate. This contract covers only 90% of the mine's Phase One. A planned Phase Two is expected to double capacity.

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Exceptional Level of Planning Certainty for the Industry

The latest financial results confirm this upward trend. In the second quarter of 2026, revenue jumped 498% year-over-year to CAD 43.0 million. This growth was driven by historically high record prices for tungsten. The bottom line was a net profit of CAD 181.8 million, though this was also significantly affected by non-cash derivative valuation adjustments. Adjusted EBITDA turned positive at CAD 17.6 million, compared to a loss in the prior year. In addition, the company successfully completed the issuance of a convertible senior notes offering totaling USD 800 million. With cash reserves of CAD 1.2 billion, Almonty is now well funded to rapidly advance the development of its promising projects.

Technical Analysis: The Leap to the Next Higher Level

After a strong rally to a high of just over USD 24, the stock took a breather. The share is currently in a fairly pronounced consolidation phase, which could end at any time. The upper boundary of this range is currently just under USD 15. This is precisely the key level for investors. If the share breaks above this level and climbs to, say, USD 15.50, the breakout should be considered successful.

Another dynamic upward move could then follow this. Based on the chart pattern, this scenario suggests potential for a move all the way up to the previous high of USD 24. That would represent a very significant upside from the current price or the breakout price. At the same time, the stock is well supported on the downside. A floor is currently found at just under USD 12 to USD 12.50. Should the price unexpectedly fall below this range, several horizontal support levels should cushion the decline. The risk-reward ratio for Almonty therefore currently appears attractive.

The defense industry is clearly poised for a golden decade. Rheinmetall and Hensoldt are quite well positioned to benefit from the inevitable rise in budgets and new major projects. Their current balance sheets and full order books point to future growth and profits.

Without high-quality tungsten, however, even the most advanced tanks and drones will remain grounded. Almonty stands out operationally with a large cash cushion, long-term offtake agreements, and a lean cost structure. The chart also shows consolidation with potential triggers above USD 15 for the next upswing. Almonty Industries is currently well-positioned to deliver pleasant surprises in investors' portfolios in the coming months.