[Opportunity Express] ONDS Surges 207% Year-on-Year: Lock in Profits or Hold for the Long Term?

$Ondas (ONDS.US)$ Over the past year, significant efforts in commercializing drones and driving growth through mergers and acquisitions have led to a staggering 207% surge in stock prices, attracting considerable attention from investors focused on cutting-edge technology and defense sectors.

Following this sharp rise, should investors lock in profits promptly or hold for the long term? This week’s Quick Opportunities will explore this with everyone.

What does Ondas primarily focus on?

$Ondas (ONDS.US)$Its strategy is highly clear: to create a defense-oriented autonomous platform covering 'reconnaissance-communication-strike' through its two key business units, Ondas Autonomous Systems and Ondas Networks.

The Ondas Autonomous Systems division serves as the core engine of transformation within defense and security and is currently the primary driver of the company's growth.

OAS is not limited to selling individual drone hardware; rather, it builds a system platform that offers a complete closed-loop solution from reconnaissance to engagement. We can understand this through three flagship products:

Optimus System: Ondas’ drones are like robots living in a box. When the box opens, the drone automatically flies out to patrol (for example, monitoring oil fields, ports, or urban security). When it runs out of power, it autonomously returns to the box for charging, requiring no human intervention throughout the process.

Scout System:This is the first fully automated drone system approved by the US FAA for ‘beyond visual line of sight’ operations. In the United States, the vast majority of drone operations require an operator to supervise nearby. However, the Scout System is permitted to operate autonomously without supervision. For inspecting hundreds of kilometers of oil and gas pipelines, this can result in significant cost savings.

Iron Drone: An autonomous counter-drone system specifically designed to intercept invading drones, with the aim of protecting sensitive airspace such as airports and urban areas. The system has already secured deployment contracts in Europe, Asia, and other regions.

The Ondas Networks segment represents Ondas' core expertise—dedicated private wireless networks.

You may wonder why there is still a need for Ondas' network when 5G or Starlink already provides communication services. In fact, critical infrastructure such as railways, oil pipelines, and power companies are often located in remote areas where 4G/5G signals may not reach. Moreover, public networks can become congested or fail during emergencies (e.g., natural disasters).

Ondas' FullMAX radio technology enables railways or power companies to establish a 'private, encrypted internal internet.' This dedicated channel allows only their data to flow through, preventing unauthorized access. It also offers extensive coverage at a maintenance cost much lower than laying fiber-optic cables.

Ondas is currently focusing on these two core businesses to achieve steady growth. To this end, the company is not only strengthening its internal capabilities but also continuously acquiring high-quality assets to expand its operations.

Aggressive Acquisitions to Expand Footprint

$Ondas (ONDS.US)$ A series of intensive acquisitions and investments recently made by the company reflect its determination to build a closed-loop defense platform.

Its acquisition strategy is clear, covering areas such as unmanned ground systems, robotics, fiber-optic communications, underground intelligence, and mine-clearing robots.

For instance, by acquiring Israel-based Sentrycs, Ondas gained unique 'radio frequency network control' counter-drone technology capable of detecting, identifying, and non-kinetically taking over enemy drones, thereby enhancing its core counter-drone defense layer. The acquisition of Apeiro Motion allowed the company to quickly enter the ground robotics field, establishing a foundation for the development of unmanned ground vehicles. Additionally, the acquisition of Insight Intelligent Sensors strengthened the company's key environmental perception capability in AI electro-optical sensing. By bringing mine-clearing expert 4M Defense Ltd. into its portfolio, Ondas successfully extended its capabilities to the high-barrier specialized operations field of underground intelligence reconnaissance and unexploded ordnance disposal.

In summary, Ondas’ acquisitions are not fragmented but tightly focused on the core objective of a defense platform. This transforms its narrative from single-product growth to platform integration and ecosystem building, significantly expanding its potential market and raising the ceiling.

OAS drives company growth.

Looking at the latest Q3 2025 earnings, Ondas reported revenue of $10.1 million, representing a year-over-year increase of 582%, setting a new historical high. As of Q3, consolidated backlog stood at $23.3 million, compared to $10 million at the beginning of 2025. The high revenue growth rate in Q3 and the surge in orders have instilled significant confidence in the market. Management has raised the 2025 revenue target to at least $36 million and preliminarily set the 2026 revenue target at a minimum of $110 million.

Of course, the core pillar of ONDS' revenue remains OAS.In Q3 2025, OAS contributed a record $10 million in revenue, with corresponding backlog growing to $22.2 million. Including acquisitions completed or pending in Q4 2025, OAS' total backlog amounts to $40.4 million.

OAS’s growth is primarily driven by deliveries of its Optimus system and Iron Drone radar-based counter-drone platform. Particularly, the counter-drone systems are poised for sustained multi-year growth, with the market size expected to reach $10.5 billion by 2030. The company has expanded its global footprint to over 25 countries, serving top defense, public safety, and security agencies tasked with protecting critical infrastructure.

Another core business segment, Ondas Networks, while contributing less to revenue than OAS, deploys 160 MHz networks supporting dot16, addressing significant industrial needs. It has established robust customer relationships and technological barriers for Ondas in the communications field, providing potential for cross-industry applications.

Ondas is currently collaborating with several railway companies, planning to launch pilot projects using the 160 MHz band across multiple rail networks in Q4 2025 and Q1 2026. Field tests will conduct Proof of Concept (POC) applications on 160 MHz networks to address communication, signaling, and general operational issues. This marks a crucial step in transforming new industry standards into actual contracts, with full productization and commercialization expected by 2026.

Investors should closely monitor the progress of order fulfillment related to Ondas Networks, as it will be a key factor influencing short-term stock price volatility.

Investment Risks

It is important to note that $Ondas (ONDS.US)$ Although growth has been rapid, there remains a series of potential risks that cannot be overlooked.

First, competition in the drone market is becoming increasingly fierce, with companies such as Unusual Machines, AeroVironment, and Draganfly all vying for a larger market share. Any delays in delivery or reduction in orders from Ondas' major clients could significantly impact its revenue.

Furthermore, the company’s operating expenses increased to $18.1 million in Q3 2025, up from $8.7 million in the same period last year, due to rising personnel costs. The adjusted EBITDA loss widened to $8.8 million, compared to a loss of $7.1 million in the same period last year. Combined with the company's aggressive acquisition strategy, subsequent integration challenges related to technology, teams, and operations may lead to additional costs, further squeezing profit margins.

Additionally, Ondas faces a valuation issue, with its current price-to-sales ratio far exceeding the industry average of 3.29, which may expose investors to adjustment risks in the medium to short term.

Technical Analysis

From a technical perspective, $Ondas (ONDS.US)$ The stock remains in an upward trend; on December 15, the price retraced to find support at the 50-day EMA, forming a short-term support level.

However, recent adjustments in the broader U.S. stock market, coupled with upcoming key data releases such as non-farm payrolls and CPI, could result in heightened stock price volatility. Investors need to carefully monitor the effectiveness of the 50-day EMA support. If the 12-day EMA crosses below the 50-day EMA and the candlestick closes below the 50-day EMA, it would indicate short-term pressure on the stock, potentially leading to further corrections, necessitating timely profit-taking or stop-loss exits. Conversely, if the 50-day EMA holds as strong support, it would present a relatively safe entry point for short-term accumulation, warranting long-term tracking.

However, no technical indicator is infallible and should only serve as a reference. Investors need to remain mindful of associated risks. Fellow investors with further insights on investment perspectives are welcome to share and discuss in the comments section.

Risk Disclosure: This content does not constitute a research report and is provided for reference only. It should not be relied upon as a basis for any investment decision. The information contained herein does not represent a comprehensive description of the securities, markets, or developments discussed. While the sources of information are deemed reliable, no guarantee is made regarding the accuracy or completeness of the content provided. Furthermore, no assurance is given concerning the accuracy of any statements, opinions, or forecasts presented in this document.

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