TipRanks Smart Growth Portfolio #53: Sky Abuzz
Dear Investors,
Welcome to the 53rd edition of the Smart Growth Portfolio and Newsletter, where we spotlight a rapidly emerging name in the autonomous defense sector. But first, here are some news and updates.
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Portfolio News
❖ Clear Secure (YOU) ex-dividend date is March 10. Although YOU is a midcap growth company, its stable finances allowed it to initiate dividend payments back in 2022. The regular quarterly dividend of $0.125 reflects a yield of about 2.11%, double the technology sector average.
In other company news, Needham hiked its price target on Clear Secure to $60 from $45, implying an upside of about 25% from current levels. The firm said that YOU’s recent report revealed broad-based strength in CLEAR1 bookings, robust in Amex net adds, and general positive ongoing trends for CLEAR+, while maintaining strong cash flow generation.
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❖ Applied Digital (APLD) is moving aggressively to build one of the largest AI data centers in the world, working to secure the funding and the power supply needed to make it happen.
On the funding side, Applied has priced an offering of $2.15 billion in 6.750% senior secured notes due in 2031, expected to close around March 10, 2026. The raised amount is intended for the development and construction of Polaris Forge 2, a 200-megawatt AI data center in Harwood, North Dakota. This facility is already leased to Oracle Corp., providing APLD with a high-credit-quality anchor tenant to justify the massive debt.
The second part of the deal – powering that future AI hub – is equally important, as energy remains the most pressing bottleneck in the AI buildout. Here, APLD has acted through Base Electron, an independent power producer it backs, which has issued a full notice to proceed on a $2.4 billion contract with Babcock & Wilcox. The energy infrastructure company will build a natural gas-fired power plant – using four 300-megawatt boilers paired with Siemens Energy steam turbines – delivering 1.2 gigawatts of dedicated electricity. For context, 1.2 GW is enough to power roughly 900,000 homes.
The generated power will supply both Applied’s AI Factory campuses and the broader grid, giving APLD a major structural advantage over competitors still waiting in traditional utility queues. At the same time, the development of Polaris Forge 2 is transforming APLD from a relatively smaller-scale player into a major AI landlord.
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❖ Micron’s (MU) price target was hiked to $650 from $315 by Aletheia Capital, Asia’s largest independent investment advisor based in Hong Kong. This is a massive bullish call on MU, setting a new Street high, by far – the previous highest PT was Stifel’s $550. According to the analyst note, the surge in demand for AI training and inference continues to drive massive consumption of HBM, while the rapid emergence of agentic AI workloads requires equally large volumes (if not larger) of diversified memory beyond HBM, including Micron-made server-grade DRAM, LPDDR5X, and CXL, immensely benefiting the chipmaker. As a result, Aletheia doubled its outlook for MU’s FY26 EPS and tripled its FY27 estimates. 1
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❖ Arlo Technologies (ARLO) announced that its board has approved the repurchase of up to an aggregate of $50 million of shares of its common stock through open market purchases. This new buyback plan is set to run through December 31, 2027. This program adds to the previous September 2024 authorization of a similar amount, which was largely exhausted by the end of 2025. The prolific buybacks reflect confidence in the company’s long-range plan, profitability improvements, and cash position, while signaling that management views Arlo’s stock as undervalued.
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This Week’s Top Growth Pick: Ondas Holdings (ONDS)
Ondas, Inc. operates at the intersection of autonomous aerial systems, ground robotics, and specialized wireless connectivity, developing technologies that help organizations monitor and secure critical infrastructure. The company builds integrated platforms that combine AI-enabled drones, robotic systems, automated data collection, and secure communications designed for complex operating environments. As industries increasingly rely on automation to oversee assets spread across large and often remote areas, the ability to gather intelligence quickly and respond in real time is becoming essential. Ondas focuses on that operational layer – enabling persistent aerial monitoring, counter-drone defense, and reliable machine-to-machine communications for defense, industrial, and public-safety applications. Its systems are built for situations where situational awareness, control, and uptime are mission-critical.
Source: Ondas, Inc. Website
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Drones of Change
Ondas Inc. began as a developer of specialized wireless networks designed to connect machines and infrastructure across large industrial environments. Its early technology focused on private broadband systems that allowed rail operators, utilities, and industrial facilities to move operational data reliably across wide areas – an expertise that later became increasingly valuable as automation and unmanned systems entered industrial workflows.
The company’s defining shift came over the past five years, as Ondas expanded from connectivity into autonomous systems. Through subsidiaries such as American Robotics and Airobotics, the company began developing fully autonomous drone platforms capable of launching, landing, charging, and redeploying without human intervention. These systems support persistent aerial monitoring of industrial facilities, energy infrastructure, and security-sensitive locations, enabling operators to maintain continuous situational awareness across large operational areas.
That transition steadily moved Ondas deeper into security, defense, and critical-infrastructure protection. Airobotics’ Iron Drone Raider system – an autonomous counter-drone platform designed to intercept hostile unmanned aircraft – has gained traction with defense and civil-security customers, including a multi-million-dollar order from a European NATO country in early 2026 to protect national infrastructure. Around the same time, the company secured a multi-year demining program award valued at up to $30 million, highlighting the growing role of unmanned systems in humanitarian and post-conflict operations.
Strategic acquisitions have further broadened the company’s technological reach. In early 2026, Ondas announced the acquisition of Rotron Aero, a developer of advanced unmanned aerial platforms, strengthening its capabilities in heavy-lift and tactical drone systems. Earlier additions, such as Roboteam, brought a portfolio of rugged unmanned ground vehicles already deployed by defense and security forces worldwide, while Apeiro Motion added advanced robotic mobility technologies supporting next-generation ground systems.
Partnerships and new programs are accelerating that momentum. In March 2026, Ondas announced a $10 million strategic investment and collaboration with World View Enterprises to explore high-altitude sensing and communications platforms. Shortly afterward, the company secured a $20 million initial purchase order under a program where Ondas will act as the prime contractor for autonomous systems deployment. Together, these developments show how Ondas has been assembling a broader autonomous technology ecosystem – combining aerial drones, counter-UAS systems, ground robotics, and specialized communications to support defense, homeland security, and critical infrastructure protection.
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Rise of the Machines
Ondas operates at the intersection of autonomy, robotics, and secure communications, building integrated systems designed to monitor, protect, and control contested environments. The company combines autonomous aerial platforms, counter-drone defenses, ground robotics, and industrial wireless networks into a unified operational architecture. ONDS is positioning itself as a multi-domain autonomy platform provider, delivering layered systems capable of detecting, analyzing, and responding to threats across air, ground, and communications networks.
The company’s primary growth engine is Ondas Autonomous Systems (OAS), which develops autonomous drones and robotics platforms used for surveillance, security, inspection, and defense missions. Its flagship platform is the Optimus “drone-in-a-box” system, a fully autonomous aerial solution capable of launching, flying missions, charging, and redeploying without human intervention. Optimus supports persistent monitoring of energy infrastructure, utilities, rail networks, border security operations, and defense installations, allowing operators to maintain continuous aerial awareness of critical assets. The system’s automated docking station can store multiple batteries and mission payloads, enabling drones to autonomously switch tasks while maintaining around-the-clock coverage. In early 2026, Optimus received DCMA Blue List approval, confirming compliance with U.S. Department of Defense cybersecurity and supply-chain standards and enabling faster procurement by federal agencies.
Alongside autonomous observation platforms, Ondas has built a layered counter-drone defense architecture designed to address one of the fastest-growing threats in modern security environments. Its approach integrates three operational layers: detecting and identifying hostile drones using sensor intelligence, electronically neutralizing them through Sentrycs’ cyber-over-RF takeover technology, and physically intercepting them when necessary through the use of the Iron Drone Raider system. Unlike traditional counter-UAS solutions that rely on jamming or explosives, Iron Drone Raider deploys interceptor drones that capture hostile drones with nets, allowing safe neutralization even in dense urban environments such as airports or critical infrastructure facilities. ONDS recently expanded this portfolio with Sentrycs Scout, a portable counter-drone platform designed for law enforcement and tactical field units, addressing a rapidly growing market for mobile drone defense.
The company is also expanding its autonomy platform beyond aerial systems. The acquisitions of Roboteam and Apeiro Motion add tactical ground robots and advanced robotics mobility systems, enabling integrated air-and-ground mission capabilities. Meanwhile, the planned acquisition of Rotron Aero introduces long-range unmanned aerial vehicles and autonomous strike platforms, extending Ondas’ capabilities into extended-range reconnaissance and attack operations.
Complementing the robotics business is Ondas Networks, which develops the FullMAX private wireless platform for mission-critical industrial connectivity. The technology enables secure broadband communications for railroads, utilities, and other critical infrastructure operators, providing the resilient networking backbone required for autonomous systems and industrial Internet-of-Things deployments.
These technologies are increasingly being deployed in real-world programs. Ondas subsidiaries have secured multiple government and defense contracts, including a $20 million initial order for a national autonomous border protection system involving fleets of drones and AI-driven command-and-control architecture. The company has also received multi-million-dollar orders for its Iron Drone Raider system from European NATO-country customers, including deployments protecting major international airports. In Israel, its 4M Defense unit is executing a $30 million multi-year autonomous demining program along the Israel–Syria border, while a recently announced Asia-Pacific defense contract expands deployments of its autonomous aerial platforms in that region.
ONDS is also pushing its sensing capabilities into higher operational layers. In March 2026, the company invested $10 million in World View Enterprises, forming a partnership to integrate high-altitude stratospheric surveillance platforms with its tactical drone systems. The collaboration aims to create a multi-layer intelligence architecture spanning stratospheric, aerial, and ground domains, reinforcing the company’s multi-domain strategy.
The broader market backdrop strongly favors these capabilities. The rapid proliferation of low-cost drones in conflicts such as the Ukraine and Iran wars has exposed the limitations of traditional missile-based air defense systems, which are often too expensive to counter large drone swarms. Governments are increasingly seeking lower-cost, scalable counter-UAS solutions, a category expected to expand into a multi-billion-dollar market over the coming decade.
Within this evolving defense landscape, Ondas sits between large missile-defense primes and smaller single-product drone startups. By offering an integrated detect-to-intercept autonomy platform, the company is positioning itself as a flexible systems integrator capable of protecting civil infrastructure, securing borders, and supporting modern military operations. As autonomous systems become central to national security and infrastructure protection, that layered approach positions Ondas to capture a growing share of a rapidly expanding global autonomy and defense market.
Source: Ondas, Inc. Investor Day 2026
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Escape Velocity
Ondas’ financial profile reflects a company moving from early-stage development toward scaled deployment. The numbers still show a young business investing heavily in growth, but recent results suggest the underlying revenue engine is beginning to accelerate.
Momentum became visible in the second half of 2025. Preliminary Q4 revenue is expected to reach $27-29 million, up more than 50% from the prior internal target, and nearly six times higher year-over-year, reflecting the early ramp of autonomous systems programs and new defense deployments. For the full year, ONDS expects $47.6-49.6 million in revenue, roughly 23% above its earlier guidance and marking a sharp step up from the prior year. The trajectory has been similarly strong across recent reporting periods, with trailing twelve-month revenue growth reaching 208% through Q3 2025. In other words, Ondas is no longer inching forward with incremental sales; it is transitioning into a much steeper expansion phase as pilot projects evolve into operational programs.
Order visibility is improving alongside that growth. Backlog reached $65.3 million at the end of 2025, nearly triple the level reported just one quarter earlier, reflecting a broader mix of government, infrastructure, and defense contracts. Much of this backlog is tied to programs that typically expand over time through follow-on orders and deployment phases, giving the company a clearer runway for continued revenue growth.
Profitability has not yet arrived, but the spending pattern is consistent with a company scaling its technology platform. Operating expenses increased throughout 2025 as Ondas invested in research and development, manufacturing capacity, and the integration of several acquisitions that broaden its autonomous systems ecosystem. As a result, the company remains GAAP loss-making, while non-GAAP results are improving fast – with a loss per share shrinking at a double-digit pace through the past year – although still reflecting the cost of expansion. Operating cash usage is estimated at roughly $35-40 million annually, which for now is manageable given the company’s unusually strong balance sheet.
That balance sheet changed dramatically in early 2026 after ONDS completed a $1 billion capital raise, generating approximately $959 million in net proceeds. Combined with existing liquidity, the company ended the year with more than $1.5 billion in cash and minimal debt, giving Ondas several years of runway. For a defense technology company still in its scale-up phase, that level of financial firepower provides a significant strategic advantage. It allows Ondas to continue funding product development, pursue acquisitions, and expand manufacturing capacity without the near-term financing pressures that often constrain emerging defense contractors.
Management’s outlook reflects confidence that recent contract momentum will translate into meaningful scale. The company has raised its 2026 revenue target to $170-180 million, implying growth of more than threefold year-over-year at the midpoint if achieved. The forecast assumes that several autonomous systems programs currently in early deployment stages will expand into larger operational rollouts across defense, border security, and infrastructure protection markets.
Risks remain, as Ondas is still in the investment phase, and its financial model depends on successfully converting its expanding pipeline into sustained deployments. Yet with revenue accelerating, backlog rising, and a balance sheet capable of supporting several years of expansion, the company appears well-positioned to pursue that growth trajectory as demand for autonomous systems continues to rise globally.
Source: Ondas, Inc. Investor Day 2026
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Vertical Takeoff
Ondas operates within a small but rapidly expanding cluster of publicly traded autonomous defense technology companies. Its closest peers include Red Cat Holdings and Draganfly, two small-cap drone developers focused on defense and public safety markets. Larger sector benchmarks include Kratos Defense and AeroVironment, both established suppliers of unmanned systems to the U.S. military and allied defense programs. Together, these companies provide a useful valuation and stock performance reference point for Ondas’ position within the emerging autonomous defense ecosystem.
Over the past year, Ondas’ stock has not just ridden the autonomous defense wave – it has become one of the market’s purest expressions of it. ONDS’s roughly 1,080% surge reflects a step-change in how investors perceive the company: from a super-speculative penny stock to a multi-domain autonomy platform with visible defense credibility. The difference versus peers is less about “drones are hot” and more about catalyst density and timing. Ondas stacked high-signal updates – acquisitions that expanded capability across air and ground, procurement unlocks such as DCMA Blue List approval, and headline program wins that framed scale – within a very short window. In a still thin-float name, that kind of newsflow can compress a re-rating from years into months.
For context, every peer in the group also performed exceptionally well, with the worst-performing stock, AeroVironment, still delivering a 67% rally. But while the geopolitical backdrop lifted the entire sector, peers lacked the full combination of surge drivers that propelled ONDS: a pure-play drone narrative, explosive growth from an extremely low starting valuation, an unusually dense stream of visible catalysts, small-float amplification, and the absence of established profitability that often caps upside in more mature defense companies. Most of these dynamics remain in place for Ondas, with the average Street price target still implying more than 72% additional upside.
Ondas’ valuation reflects a company that investors increasingly treat as a high-growth autonomy platform rather than a near-term earnings story. Based on an enterprise value of roughly $3 billion and management’s $170–180 million revenue target for 2026, ONDS trades at about 17x forward sales – a premium to larger peers such as Kratos and AeroVironment but broadly consistent with earlier-stage autonomy companies that are still scaling deployments. The key driver behind that premium is growth. Ondas has already delivered triple-digit revenue expansion, and if its autonomous systems programs continue ramping toward a potential $250-300 million revenue run rate by 2027, operating leverage could begin to materially reshape the financial profile. If that growth trajectory materializes, today’s valuation may ultimately prove to be the market’s early entry point into a company moving rapidly up the defense autonomy value chain – a thesis reflected in current Street price targets.
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To Sum It All Up
Ondas is positioned at a strategic intersection of autonomy, robotics, and modern security infrastructure – areas that are rapidly becoming central to how governments and industries protect assets and operate in contested environments. The company’s expanding platform across drones, counter-drone systems, and robotics reflects a broader shift toward autonomous technologies that can monitor, defend, and respond in real time. As geopolitical tensions and drone warfare reshape defense priorities, demand for scalable, lower-cost autonomous solutions is accelerating. Ondas is still early in its journey, but the combination of technological breadth, growing program visibility, and a market increasingly focused on autonomy gives it a compelling runway. If execution continues and deployments scale as expected, the company could evolve from an emerging contender into a meaningful player in the next generation of defense technology.
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Smart Growth Portfolio
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Disclaimer
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