Defence Stocks Ride the NATO Wave: Boeing, Volatus, Dassault, RTX and DroneShield in Focus

Boeing and RTX Corp: At the Centre of the New EU Military Offensive

The arms race continues and is accelerating. The EU's new ambitious plans are accompanied by official approval of an additional EUR 6.1 billion in EU military aid for Kyiv. These funds will go directly toward purchasing ammunition, drones, electronic warfare equipment, and modern air defence systems. Thanks to a special provision by the member states, Ukraine may now even use the money to acquire US Patriot PAC-3 air defence missiles. Commission President Ursula von der Leyen emphasized that this would protect Ukrainian airspace while simultaneously strengthening Europe's own defence. In total, EUR 28.3 billion has already been allocated for military support through the current EU support loan.

Boeing and RTX (formerly Raytheon Technologies) are key players in Ukraine's announced purchase of US Patriot air defence missiles. As the lead defence contractor, RTX manufactures the entire Patriot air defence system as well as the tactical guided missiles. At the same time, Boeing supplies the highly complex seeker heads, which are indispensable as the technological core for the precise target acquisition of the PAC-3 interceptor missiles. With demand in Europe surging, Boeing has agreed with the Pentagon to triple production of these seeker heads. At the same time, RTX is significantly expanding its collaborations with European partners to ramp up production capacity for missile and air defence components across the entire continent. Both US giants are benefiting directly from the European multi-billion-euro funding package, as they supply the urgently needed high-tech systems for Ukrainian airspace. Exciting!

Dassault Aviation: France's Trump Card in European Airspace

Dassault Aviation is also contributing its in-depth expertise in networked air combat systems and state-of-the-art fighter jets to European defence plans. Following the end of the trilateral FCAS jet project, the French defence contractor is now intensively pushing forward with the development of the new Rafale F5 standard, which is considered the technological centrepiece of future air combat. This modernized platform is specifically designed to operate in "collaborative combat" alongside advanced combat drones and unmanned escort systems (Loyal Wingman). In addition, Dassault benefits directly from European financial aid, as Ukraine recently placed a historic order for 16 Rafale fighter jets, which are being co-financed through the EU support loan. With its advanced electronic warfare and digital networking systems, the company supplies key high-tech components that the EU requires to maintain its sovereignty in the air. The stock has recently consolidated significantly and, at EUR 282, is back at last fall's level.

Volatus Aerospace: The First Major Government Contract Is Here

Almost unnoticed, the Canadian company Volatus Aerospace is undergoing a remarkable transformation from a specialized drone service provider to an integrated Canadian aerospace and defence platform. The key driver is the government's Defence Drone Initiative (DDI) Marketplace, through which Volatus is now qualified in all five service areas. The offering ranges from unmanned systems and counter-UAS to communications and data, as well as engineering, training, and innovation. This gives the company access to a significantly broader spectrum of future Canadian defence contracts.

The crucial step from potential to revenue has now also been taken, as Canada has awarded Volatus a 5-year contract to supply tactical ISR drone systems to the Canadian Armed Forces. Initially, 100 systems are to be delivered, with an option for an additional 4,900 units. Theoretically, the procurement volume could thus rise to as many as 5,000 drones. However, the optional systems do not yet constitute an order backlog and therefore do not represent guaranteed revenue. The contract's strategic value extends far beyond the initial tranche, as Volatus is supplying not only the aircraft but a complete ISR solution, including sensors, ground stations, data links, training, spare parts, software, and ongoing support. This unique, integrated model could prove to be a decisive competitive advantage in future government contracts.

In addition, Volatus is consistently expanding its industrial base in Canada. The innovation and manufacturing centre in Mirabel, as well as the Operations Control Centre in Vaughan, provide the infrastructure to cover development, production, integration, and operations all under one roof. As a result, what was previously a drone business is increasingly evolving into a scalable defence platform with recurring service, maintenance, and training components. The decisive factor is the rapidly growing demand among Western nations for cost-effective, rapidly deployable, domestically produced unmanned systems. The latest government contract demonstrates for the first time that Volatus can translate its technological position into a commercial defence contract. Delivery of the first 100 systems is scheduled to begin as early as the fourth quarter of 2026. At the same time, the existing growth potential remains substantial, as qualification for all five DDI divisions opens the door to further tenders.

From an investor's perspective, the narrative is thus shifting from a speculative bet on the drone market to an increasingly robust story of orders and scaling within the Canadian defence sector. Risk-tolerant investors are now hopeful and watching closely to see how quickly Volatus can win additional DDI tenders and fully utilize its existing manufacturing and integration capacity in Mirabel. If this scaling up is successful, the first CAF contract could serve as a door-opener for a significantly larger role within the Canadian and allied defence industries.

CEO Glen Lynch in conversation with IIF host Lyndsay Malchuk about the company's medium-term strategy.

https://youtu.be/ 9Jnd8XALNZ4

DroneShield: Back in Sell Mode Again

Despite strong operating revenue and a high volume of contracted orders, DroneShield shares are plummeting to new yearly lows near EUR 1.00, after trading at EUR 3.80 in the fall of 2025. The main reason for the significant price decline is severe margin compression, which has pushed the company into the red despite its growth. A sharp rise in operating costs led to an unexpectedly high net loss of AUD 32.2 million. With a market capitalization of over AUD 1.5 billion, the EU orders now secured were likely already priced into the stock, which is why investors are now liquidating their speculative positions. From a technical analysis perspective, testing psychological levels threatens to bring additional trouble. The stock thus remains a classic case where the order book appears unable to offset selling pressure. Be careful at the edge of the platform, because fundamentally, with a 2026 P/E ratio of 7, the stock is still not cheap!

The stock market is suffering from high oil prices. Other factors include rising interest rates, ongoing geopolitical turmoil, and an urgent need for a correction in the completely overvalued high-tech sector. Defence also seems to be becoming a never-ending theme, boosting OEMs as well as the specialty stock Volatus Aerospace. With its first government contract, the stock is now rising rapidly. A well-balanced portfolio protects against major fluctuations in your portfolio.