NATO without drone defense! Opportunity for Rheinmetall, DroneShield and Volatus Aerospace!

Volatus Aerospace: Another 100% rally ahead?

With Volatus Aerospace, investors can invest in a drone play that is positioned in both the military and civil sectors and has massive growth opportunities in both. The Canadian company's share price surged from EUR 0.09 in early June to around EUR 0.60 by mid-July. Investors got a little carried away, and the sharp setback was the logical consequence. However, at the current level of EUR 0.35 and a market capitalization of just over CAD 200 million, the more than obvious demand from NATO offers an exciting entry opportunity. For context: DroneShield is valued at around EUR 1.7 billion. Unlike drone manufacturers, Volatus acts as a service provider, partnering with drone makers based on customer needs and enhancing solutions with proprietary hardware and software. Its drones can be remotely controlled globally from a command center near Toronto. The Company offers a broad range of services, including aerial reconnaissance, cargo transport, AI-assisted inspections of pipelines and buildings, and pilot training.

Operational events in recent months demonstrate the Company's broad positioning in the military and civil sectors and highlight its growth opportunities. Highlights in the second quarter included regulatory breakthroughs for national BVLOS operations and the extension of a nationwide framework agreement in Canada. In addition, the Company received approval from two major oil and gas companies for drone inspections of pipelines and entered into a partnership with J.D. Irving for large-scale reforestation. Volatus also secured a nationwide agricultural contract for multispectral crop surveys and advanced the commercialization of autonomous BVLOS medical flights in Ontario. Further successes followed after the end of the quarter: a training contract and a surveillance contract – both from NATO countries. These are unlikely to be the last contracts from NATO.

Rheinmetall also plays a role in drones

Of course, Rheinmetall cannot be left out of the list of arms profiteers. However, Germany's largest defense manufacturer is better known for its tanks, artillery systems and ammunition. The DAX-listed company's best-known new technology in the field of drone defense is the Skyranger. In 2021, it was unveiled as a compact, highly mobile air defense system designed specifically to protect against drones, helicopters, and low-flying aircraft. It combines a 30-millimeter revolver cannon with advanced sensor technology with the GTK Boxer. Orders have recently been received from both the German Armed Forces and Ukraine, where the demand for effective drone defense remains critical. The Skyranger system is also expected to safeguard Rheinmetall's planned factory in western Ukraine.

Rheinmetall's portfolio of drone defense solutions also includes mobile laser weapons and electronic jamming systems. The HEL-Effektor laser system, with an output of up to 50 kilowatts, is designed specifically for use against swarms of drones and is currently being tested. In addition, Rheinmetall is developing electronic countermeasures that interrupt radio contact between drones and their controllers or jam GPS signals. In combination with modern sensors and radar systems, this creates a multi-layered defense concept ranging from early detection to destruction.

The Group is also expanding its activities in the field of unmanned systems. In recent years, the portfolio has been expanded to include reconnaissance drones and so-called "loitering munitions." The latter are unmanned aerial vehicles that can circle over a target area, gather information, and then attack a target on command or automatically. The cooperation with the Israeli manufacturer UVision is also important. Its HERO drone family is manufactured and distributed by Rheinmetall in Europe. In September 2022, Rheinmetall and UVision received their first order for HERO drones from a European NATO partner, followed in July 2023 by a major order from Hungary, which is to be delivered in the current year.

DroneShield: Consolidation complete?

When it comes to promising drone stocks, one Australian high-flyer cannot be overlooked: DroneShield. Investors discovered the stock in February and has since gained over 300%. Like Volatus, DroneShield's stock has consolidated in recent weeks. Despite a decline of around 22%, it is worth AUD 2.81 billion on the stock market. In view of Q2 revenue, which rose by 480% to AUD 38.8 million, the stock is certainly not a bargain. Nevertheless, it remains interesting because the order pipeline is full.

The Company specializes in drone defense. This involves combining several key technologies. The focus is on radio frequency sensing (RF sensing), artificial intelligence, and sensor fusion, which can be used to reliably identify and classify unmanned aerial vehicles. This is supplemented by electronic countermeasures that disrupt or interrupt communication and GPS signals, rendering enemy drones inoperable. The systems are flexible in their application – from portable solutions to vehicle-mounted variants and stationary systems. They thus cover a wide range of applications that are of interest both in war zones and for the protection of critical infrastructure.

In recent months, DroneShield has secured several major contracts, underscoring the growing demand for effective drone defense solutions. In June 2025, the Company received a European military contract worth USD 61.6 million, followed in July by another order worth USD 11.7 million from a member of the Five Eyes alliance. With these deals, DroneShield is demonstrating that its systems are in high demand internationally and that the Company is becoming one of the leading providers of counter-UAS technologies.

Drones belong to the future – in both the civilian and military sectors. DroneShield is likely to continue to grow strongly, although there is a risk that it will be overtaken in technological development by companies like Rheinmetall. Volatus can choose the best hardware for its services, making its risk seem comparatively lower. Both stocks are very exciting. And Rheinmetall is also expected to play an increasingly important role in this field in the future.