DAX at 30,000—Unrealistic? Keep an Eye on DroneShield, Volatus Aerospace, Airbus, and Hensoldt

Airbus and Hensoldt: On the Way Back to Old Highs?

The tide has apparently turned in the defence sector! Investors who had hoped for further declines are being proven wrong. Technology-based stocks such as Airbus and Hensoldt are firmly back in focus, because they can supply the needs of organizations like NATO. With its decision to permanently allocate 5% of gross domestic product to defence and security-relevant infrastructure by 2035 at the latest, NATO has launched the largest security-policy investment offensive in its history. For the European member states alone, this means additional defence spending of several hundred billion euros per year. The focus is on air defence, electronic warfare, artificial intelligence and the defence against unmanned aerial objects - capabilities that have gained considerable importance through the experiences of the Ukraine war. In parallel, Europe is giving concrete shape to the build-out of a so-called drone wall along NATO's eastern border, to better protect critical infrastructure and airspace against autonomous threats.

Because investors had expected operational delays here, the front-line stocks first had to accept hefty discounts. Yet now, with the rapid turnaround of the Rheinmetall share, everything seems fine again: buy while the cannons are thundering is the motto - and it is working out. Thus, Hensoldt managed to gain a full 20% in just 2 weeks, while the recovery for the DAX stock Airbus was much stronger. Because in mid-May the stock was still at EUR 165, it is now back at EUR 211, just below its all-time high of EUR 221. At Airbus Defence and Space, the unmanned systems business is increasingly coming to the fore. Only a few months ago, the group successfully demonstrated the autonomous "Bird of Prey" interceptor-drone prototype, which can independently identify and engage kamikaze drones. In addition, Airbus is advancing the build-out of a European counter-UAS architecture together with technology partners, positioning itself in a market segment that is likely to gain considerable momentum in the coming years. At the same time, Airbus is working on the next generation of autonomous combat-aircraft companions, the so-called "Loyal Wingman" systems. These AI-controlled aircraft are intended to accompany manned fighter jets in the future, carry sensors, take over electronic jamming measures or even deploy weapons themselves.

Hensoldt benefits even more directly from the expansion of European air defence. The specialist for radar, sensor and reconnaissance technologies supplies precisely those components without which modern drone defence would hardly be functional. The company is consistently expanding its position in both electronic warfare and drone detection and is now participating in several European initiatives to build area-wide drone defence systems. Fundamentally, much suggests that both companies are only at the beginning of a long-term investment cycle. Analysts on the LSEG Refinitiv platform see a median 12-month price target of EUR 211 for Airbus, which is likely still lagging the strong momentum. For Hensoldt, EUR 89.50 is estimated - and here, too, the room to the upside is already getting somewhat tight at EUR 89.50.

Volatus Aerospace: Next-Generation Autonomous Systems on the Rise

The turning of the times is currently changing not only the defence strategies of numerous states but at the same time creating a billion-dollar market for autonomous systems, artificial intelligence and unmanned aviation. Companies that can offer hardware, software and operational services from a single source are increasingly coming into focus for institutional investors. That the market may only be at the start of its growth cycle is underscored by current industry studies. According to an analysis by Fortune Business Insights, the global market for unmanned aerial systems is expected to grow from USD 47 billion in 2026 to around USD 160 billion by 2034. This corresponds to an average annual growth rate (CAGR) of 16.4%. High momentum can be expected for autonomous systems such as drones and robots, AI-supported mission software and safety-critical applications. They have their own specific usage characteristics for defence, energy supply and critical infrastructure. For companies like Volatus Aerospace, this creates a highly attractive market environment, as hardware, software and recurring service revenues combine into integrated platform solutions. And this is where the Canadians can score particularly well!

CFO Abhinav Singhvi explained the company's strategy and its CAD 500 million pipeline at the recent 19th International Investment Forum.

https://youtu.be/fURtUtX51IY

Having started with delivery and control systems from the air, Volatus Aerospace today positions itself in the critical upper segment of the sector. Because today the demand is for unmanned aerial systems that enable airborne data services and AI-based autonomy solutions. Volatus Aerospace has many patents and software know-how, complemented by corresponding user training. The goal is an integrated platform for civil, industrial and security-relevant applications. With this vertical setup, a business model emerges that benefits from infrastructure inspections just as much as from the global rise in demand for modern defence technologies. A further milestone has now been reached with the commissioning of a roughly 53,000-square-foot production and integration center at the Mirabel aviation site near Montréal. There, the first intelligent drone docking stations for commercial customers are already rolling off the line, while production of the company's own V-Series drones is also set to start soon. The new production base considerably increases industrial capacity and, at the same time, creates the conditions to supply customers in Canada, the USA, and other NATO partner states faster and on a larger scale.

Following a recently completed capital measure, the company received CAD 34.5 million, which is to be invested in production expansion, new RPAS systems and targeted acquisitions. At the same time, according to its own statements, management now has a project pipeline of around CAD 500 million, which is to be gradually converted into concrete orders in the coming quarters. Additional attention was generated by the admission to the second selection round of the US Drone Dominance Program, in which only a few companies were able to qualify for further testing and possible later production orders. Should this give rise to a long-term supplier role within Western defence structures, it would likely considerably strengthen the company's international perception once again. The share price recently consolidated toward CAD 0.60 amid profit-taking across the defence sector. However, with a market capitalization of around CAD 428 million, Volatus Aerospace has reached a size that is attracting the attention of international investors focused on defence and security technologies. The company also remains well-positioned to secure a place in US defence procurement programs—a development that could prove a significant catalyst if it materializes.

DroneShield: The Third Sell-Off Is Underway

Another dazzling stock from the defence space. The topic is the Australian counter-drone company DroneShield. After a high of around EUR 3.80, three downward waves have since occurred, pushing the price back below EUR 1.50. Despite its sought-after products and extensive reports on upcoming collaborations with Western defence alliances, the company's revenue target for 2026 is only around AUD 300 million (up from AUD 216 million in 2025). The mark of over AUD 500 million is one the board is not aiming for until 2028. Here, too, investors had expected a much faster pace of execution and were confronted, alongside operational delays, with management's share sales. Perhaps the weak sentiment reflects this combination of disappointments. From a fundamental perspective, however, one could also argue that a price-to-sales (P/S) ratio of 8.5 is difficult to justify. Even at the current share price, the valuation still appears demanding.

The overall situation smells explosive. Rising interest rates and stubborn inflation are currently likely preventing a continuation of the dramatic stock-market rally of recent weeks. While high-tech and chip stocks celebrated a once-in-a-century bull run, it was above all defence stocks that consolidated considerably. Yet the order situation in the sector argues for further investment by public contracting authorities. That speaks for Airbus and Hensoldt, but in particular for Volatus Aerospace, since here a North American aerial excellence is being built for the coming decades.