Ondas Holdings Inc. saw its shares move higher in early trading on Thursday, fueled by renewed speculation around U.S. government funding for drone manufacturers and an upcoming shareholder vote that could impact its acquisition strategy. The stock closed Wednesday up 10.5% at $10.80 and was quoted at $11.62 in premarket activity, indicating continued volatility ahead of the Nasdaq open.
Drone Funding Chatter Boosts Sentiment
Market sentiment was lifted by a Reuters report, citing the Wall Street Journal, that the Trump administration is in discussions with several U.S. drone companies about potential funding. While Ondas was not named among the firms—such as Unusual Machines and Neros, which has Sequoia Capital backing—the broader sector rally lifted the stock. The move appears largely sentiment-driven, as no contracts or confirmed funding for Ondas have been announced.
Shareholder Vote on Share Authorization
Ondas’s annual meeting is scheduled for 10:00 a.m. EDT on Thursday, with a key proposal to increase the company’s authorized share count on the agenda. The company has indicated that current share reserves tied to warrants are limiting its capacity to execute its merger and acquisition program. The outcome of this vote could influence the pace of Ondas’s acquisition strategy, including recent deals like the purchase of Israel’s Omnisys Ltd.
Strong Revenue Growth and Strategic Shift
Ondas reported first-quarter revenue of $50.1 million, more than ten times the figure from the same period last year. The company has repositioned itself as a high-growth defense technology firm rather than just a drone manufacturer, focusing on software and integrated defense solutions. Ondas also raised its 2026 revenue guidance to at least $390 million, reflecting strong visibility into its targets.
Omnisys Acquisition and Analyst Views
On May 21, Ondas completed the acquisition of Omnisys Ltd. for approximately $196.6 million in stock. Omnisys’s Battle Resource Optimization (BRO) software is designed for real-time planning and coordination of defense assets. CEO Eric Brock highlighted the platform as “proven” and “battle-tested.” Needham analysts maintained a positive outlook, projecting the acquisition could add $30 million to $40 million in pro forma 2026 revenue, with further gains expected in 2027 as adoption expands in allied markets.
Financial Risks and Dilution Concerns
Despite the revenue surge, Ondas reported a first-quarter operating loss of $42.7 million, which widened year-over-year. Net income was boosted by a $389.5 million non-cash warrant gain, an accounting item that does not represent actual cash flow. The company warned that adjusted EBITDA losses will remain elevated in the second quarter. Additionally, a May 22 filing for the resale of 2.74 million shares tied to the Mistral acquisition could lead to dilution if growth falters.
Market Outlook
With the drone funding narrative, a busy premarket session, and the upcoming vote, Ondas remains in focus for traders. While the growth figures are compelling, investors will be watching closely to see if the stock can sustain its gains amid ongoing losses and potential dilution risks.
