How to profit from the arms race: Rheinmetall on the ground and Volatus Aerospace and DroneShield in the air

Rheinmetall - Transforming into a defense systems provider

Rheinmetall is undergoing a remarkable strategic expansion. Instead of limiting itself to traditional land systems technology, the Company is systematically building up new expertise in the domains of naval, space, and unmanned systems. This transformation aims to elevate the Company from a component supplier to a cross-domain, full-spectrum defense systems provider. For investors, this change signals a fundamental repositioning that goes far beyond the traditional business and is intended to open up new, significant sources of revenue in the long term.

In the naval sector, Rheinmetall has taken a decisive step with the planned acquisition of Naval Vessels Lürssen (NVL). This deal not only adds shipyards to the portfolio, but above all, expertise in the integrated construction of warships such as frigates. For the first time, Rheinmetall is acquiring the capability to offer complete maritime platforms and integrate them with its own system electronics, sensors, and weaponry. This gives the Company access to a billion-dollar market and strengthens the industrial base in northern Germany.

At the same time, Rheinmetall is pushing into space. A partnership with Norway's Andøya Space aims to build European capabilities for fast and flexible satellite launches, known as tactical responsive launches. This is complemented by the Company's entry into satellite reconnaissance via cooperation with ICEYE. In the field of unmanned land systems, the US subsidiary is driving forward the development of autonomous vehicles such as the "Mission Master," which serves as a transportable platform for various tasks. These initiatives underscore the Company's ambition to become the leading full-range supplier for modern land and alliance defense. The share price recently failed to reach the EUR 2,000 mark and is currently trading at EUR 1,928.50.

Volatus Aerospace – More than just a drone company

The drone industry is growing rapidly, and Volatus Aerospace has positioned itself as an integrated service provider that is benefiting from this trend. The Company does not operate purely as a hardware manufacturer, but as a solutions provider that combines the appropriate technology according to customer requirements and supplements it with its own software and services. This model is proving to be extremely scalable. The portfolio ranges from the inspection of critical infrastructure such as pipelines and power grids to precise agricultural analyses and automated logistics deliveries. A key success factor is the Company's own remote control center in Ontario, from which missions can be carried out worldwide. This broad positioning makes Volatus independent of individual markets.

In the civil sector, recent projects highlight the diversity of possible applications. A multi-year contract to inspect 100,000 miles of power lines for a North American utility shows how drones are replacing traditional methods. Equally significant is the partnership with AI Reforestation. Together, the two companies plan to use the heavy-lift Condor XL drone to sow tree seeds over large areas in regions destroyed by forest fires. This not only addresses an urgent environmental problem, but also opens up long-term business models in the area of CO₂ certificates. Such applications demonstrate the social benefits of the technology.

In addition to civilian applications, the Company's involvement in the defense sector is driving growth. Volatus has positioned itself as a reliable partner for NATO countries and has already secured several seven-figure contracts for tactical reconnaissance drones and training units. The changing geopolitical situation and the mandatory increase in defense spending by NATO countries are creating long-term stable demand in this area. The ability to conduct complex drone operations and deliver valuable data intelligence makes Volatus a relevant player in this growing market. The stock has gained significantly since the beginning of June and is currently trading at CAD 0.57.

DroneShield – Systematic growth

DroneShield continues its growth trajectory unabated. The Australian drone defense specialist recently announced the delivery of its 4,000th system and secured two new US orders worth AUD 7.9 million. The order comprises portable systems for the US Department of Defense, which are to be delivered from stock in the fourth quarter. This rapid delivery demonstrates how well the Company is prepared for larger orders. In addition, these are repeat orders, which shows that customer satisfaction is high and that further orders can be expected in the future.

The Company's technological base is broad. Beyond pure hardware solutions, DroneShield offers an integrated software platform that connects various sensors and effectors. Customers who subscribe to the SaaS service receive regular AI-powered updates, which continuously improve the systems and generate a valuable source of recurring revenue. This model strengthens customer loyalty and ensures predictable revenue independent of new business. In the first half of the year, the Company generated revenue of AUD 72.3 million, an increase of 210%, and posted a pre-tax profit of AUD 5.2 million for the first time.

Strategically, DroneShield is benefiting from an early market stage in which pilot projects are now transitioning into large-scale procurement programs. The Company serves a broad range of customers, from the military and government agencies to critical infrastructure operators. Planned regional manufacturing in the US and Europe starting in 2026 will further facilitate local marketing. For investors, the ability to translate strong demand into scalable and profitable sales is crucial. The stock is currently trading at AUD 3.22.

The arms race in the drone age opens up unique opportunities for investors. Rheinmetall is strategically transforming itself from a component supplier to a cross-domain system provider for national defense. As an integrative service provider, Volatus Aerospace dominates both civilian and military drone markets with its scalable solution approach. DroneShield is already turning the massive demand for drone defense into profitable and scalable revenues with its hardware-software mix. These companies are positioning themselves at the forefront of a fundamental paradigm shift in the security industry.