Is Russia testing NATO? New scenarios even consider the possibility of asymmetric attacks on Poland. This complex situation is forcing nations to rethink their defence strategies and invest accordingly. According to surveys by the Stockholm International Peace Research Institute, global military spending reached a historic high of USD 2.887 billion in 2025. This trend is driving the unmanned aerial systems and defence technologies sector in particular. While large corporations and specialized technology suppliers are benefiting from this realignment, smaller, more agile market players are coming into focus within the defence industry as strategic suppliers and acquisition targets. We take a closer look and highlight some exciting stocks.
time to read: 3 minutes
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Author:
Nico Popp
ISIN:
VOLATUS AEROSPACE INC | CA92865M1023 | TSXV: FLT , OTCQB: TAKOF , RHEINMETALL AG | DE0007030009 , DRONESHIELD LTD | AU000000DRO2
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Author
Nico Popp
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
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Rheinmetall: Billion-Euro Contracts for the Eastern Flank
The Düsseldorf-based defence conglomerate Rheinmetall is solidifying its market-leading position in Europe through a dual strategy focused on unmanned attack systems and advanced defence technology. In April, the company signed a framework agreement worth billions of euros with the German Bundeswehr for the FV-014 Loitering Munition System. The first tranche is worth approximately EUR 300 million gross, with deliveries scheduled for the first half of 2027. At the same time, Rheinmetall is expanding its presence on NATO's eastern flank. In May, Romania awarded the defence giant a major contract for Skyranger 35 air defence systems and Lynx armoured personnel carriers with a total value of EUR 5.7 billion. In addition, Rheinmetall invested over GBP 56 million in its Telford, UK, facility, where the joint venture Rheinmetall BAE Systems Land delivered the 100th Boxer vehicle to the UK Ministry of Defense at the end of June. So much activity in just a few months shows that business is booming at Rheinmetall.
DroneShield: Revenue Surge Driven by AI-Powered Defence Systems
The Australian company DroneShield recorded a substantial revenue surge in the past fiscal year, benefiting from rapid growth in the anti-drone market. Annual revenue climbed by a whopping 276% to a record high of AUD 216.55 million. This resulted in a net profit of AUD 3.52 million for the company, marking an operational turnaround. The growth driver was the high-margin Software-as-a-Service segment, which grew by 312% to AUD 11.6 million for the full year. DroneShield aims to increase the share of recurring SaaS revenue to 30% to 40% within the next five years. To support its global sales pipeline of AUD 2.2 billion, the company is continuing to expand its production capacity. Management expects higher throughput by the end of the year. The expansion is timely: in February alone, the company secured six contracts worth a combined USD 21.7 million for portable counter-unmanned aircraft systems (C-UAS).
Volatus Aerospace: Production in Canada and Exciting Projects
Canadian-based Volatus Aerospace reported revenue growth of 26% in fiscal year 2025, reaching a total of CAD 34.20 million. In particular, defence and drone revenue doubled from CAD 7.89 million in the previous year to CAD 16.26 million, representing a 106% increase and underscoring the company's successful strategic focus on the defence sector. In the first quarter of 2026, under the leadership of CEO Glen Lynch and CFO Abhinav Singhvi, Volatus strengthened its financial foundation with stable revenue of CAD 5.6 million and a record-high gross margin of 35%. The planned net loss of CAD 6.6 million results from targeted investments in the start of production in Mirabel, the Condor XL heavy-lift drone program, and the further development of the V-Cortex AI autonomy platform. The latter enables navigation independent of positioning services such as GPS through optical terrain matching.
Volatus achieved another milestone last November with the purchase of advanced unmanned aerial systems from the British developer Caliburn Holdings. The acquisition, funded with CAD 2 million worth of the company's own shares, includes three highly modular fixed-wing UAS platforms with a flight duration of up to 7 days. The entire British engineering team is now working at the new manufacturing facility in Mirabel, Canada.
Conclusion: Strong Market Position with High Upside Potential
In addition to the Caliburn acquisition, Volatus is pursuing several other strategic partnerships and agreements. In December, the company secured a NATO defence contract worth up to CAD 9.00 million, followed by another framework agreement worth CAD 2.10 million in April for the training of security forces. Furthermore, in April, Volatus signed a memorandum of understanding with Sentinel R&D to develop a heavy kinetic interceptor drone. In the civilian sector, the company has secured an inspection contract covering 160,934 km of power lines through 2028, as well as a contract for the logistical support of offshore wind farms. Thanks to regional supply chains, Volatus is reducing its dependence on Asia and positioning itself as an exciting provider of innovative drone technology.
Analysts view Volatus Aerospace's strategic realignment positively and, by consensus, rate the stock as a clear "Buy". Estimates from five analysts aggregated on the Investing.com Canada portal indicate an average 12-month price target of CAD 1.04. At the current price of around CAD 0.63, this represents upside potential of approximately 65%. Volatus Aerospace has many interesting projects and stands out for its innovations and manufacturing operations in Canada. The coming quarters will show to what extent the company can translate its potential into tangible results.
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