Ondas Inc. shares edged lower in early premarket trading on Monday, giving back a fraction of last week's sharp gains as investors weighed a robust order update against the costs of an aggressive acquisition strategy. The stock was indicated at $13.04, down 1.4% from Friday's close of $13.22, after surging 43.5% the prior week.
The dip comes as the defense and autonomous-systems company has become a momentum favorite in the drone-defense trade. With each new order, expectations shift for this small but rapidly scaling contractor. However, its market capitalization has outpaced reported sales, making traders sensitive to signs that the backlog is converting into revenue.
On May 29, Ondas announced it secured more than $30 million in new orders during May, bringing second-quarter orders to over $110 million across defense, security, and autonomous technology programs. These orders span air defense, counter-UAS systems, loitering munitions, ISR tools, and unmanned ground vehicles.
Eric Brock, chairman and CEO, stated the orders reflect continued execution. Oshri Lugassy, co-CEO of Ondas Autonomous Systems, noted that buyers are moving beyond individual drones or sensors toward integrated mission systems.
The company reported first-quarter revenue of $50.1 million, up more than tenfold year-over-year, and raised its 2026 revenue forecast to at least $390 million. It also reported a pro forma backlog of $457 million and $1.48 billion in cash and short-term investments at quarter-end.
Analysts remain largely bullish. Max Michaelis at Lake Street maintained a Buy rating with a $19 target on May 28, while Timothy Horan at Oppenheimer kept a Buy rating with a $16 target the same day. Needham's Austin Bohlig reiterated Buy with a $23 target on May 19.
Ondas has pursued an aggressive acquisition strategy. In May, it agreed to buy Omnisys Ltd., an Israeli developer of AI-powered Battle Resource Optimization software. Ofer Yarden, Omnisys' CEO, said the platform helps defense organizations optimize resources and execute complex missions in real time.
This strategy pits Ondas against larger defense-drone players like AeroVironment and Red Cat Holdings. However, execution risk remains. Operating expenses surged to $67.3 million in Q1, and the operating loss widened to $42.7 million. The company cautioned that gross profit could remain volatile due to lumpy sales mix. A May 21 SEC prospectus covering 3.1 million shares offered by selling stockholders tied to the Omnisys transaction adds dilution concerns.
For Monday's open, the stock faces a key test: whether buyers treat the premarket dip as a pause after a steep run, or whether concerns about dilution, integration, and negative operating income weigh more heavily than the order book.
