Ondas down over 35% YTD - Is it a buy?

For growth investors, few disconnects in today's market are as striking as Ondas Holdings (NASDAQ: ONDS). Despite rapidly expanding revenue, improving profitability, and a growing pipeline of defense contracts, shares remain down more than 35% year-to-date.

While short-term sentiment has weighed on the stock, the company's underlying business continues to move in the opposite direction.

A Wave of New Contract Wins

Ondas has spent 2026 building one of the strongest order pipelines in the autonomous defense industry, consistently announcing new contracts that reinforce growing global demand for its counter-drone and autonomous systems portfolio.

Most recently, on July 20, 2026, the company announced it had secured a $6.9 million contract from the Australian Department of Defence to supply DTIM (Detect, Track, Identify and Mitigate) Single Operator Counter-sUAS Kits. The award, secured through Australian distributor HIFraser, will be fulfilled by DZYNE Technologies—now operating as Ondas Sentinel following the company's acquisition. The portable systems combine long-range drone detection, AI-powered identification, and Dronebuster® mitigation capabilities into a single operator solution, highlighting Ondas' growing presence in allied defense markets.

The Australian contract comes just weeks after another major announcement in which Ondas disclosed more than $40 million in new autonomous defense orders during June, pushing second-quarter bookings above $150 million. Those awards span counter-drone systems, loitering munitions, and autonomous defense technologies across Europe and the United States, underscoring accelerating demand as governments increase investments in unmanned defense capabilities.

Earlier this year, Ondas also secured several significant contracts:

• $20 million initial purchase order as prime contractor for a multi-year national autonomous border protection program. The project is expected to expand through multiple deployment phases as thousands of autonomous systems are rolled out.
• $15.8 million initial order under a large-scale Israeli demining initiative, with the overall program carrying the potential to reach approximately $60 million through follow-on phases.
• A multi-million-dollar European Iron Drone Raider contract to protect critical airport infrastructure in a NATO country following the successful deployment of the company's counter-UAS platform at a major international airport.

Collectively, these awards demonstrate that Ondas is evolving beyond pilot programs and prototype deployments into a company securing repeat, production-scale contracts from defense agencies and allied governments around the world. As global military spending increasingly shifts toward autonomous systems and counter-drone technologies, Ondas appears to be positioning itself as one of the emerging beneficiaries of that trend.

Revenue Growth Is Accelerating

The financial results are beginning to reflect that momentum.

During the first quarter of 2026, Ondas reported:

• Revenue of $50.1 million, up more than 1,000% year-over-year
• Record backlog of $457 million
• Increased full-year 2026 revenue guidance to at least $390 million
• Product businesses reaching positive adjusted EBITDA months ahead of management's original timeline.

Even more impressive is the operating leverage beginning to emerge.

Higher-margin autonomous defense systems are replacing lower-margin legacy businesses, allowing gross profits to expand alongside revenue. Management has emphasized that its global operating platform is now beginning to scale, meaning future revenue growth should translate into stronger profitability.

The Market Isn't Rewarding the Progress

Despite these operational achievements, ONDS shares remain significantly below recent highs and are still down more than 35% this year.

Several factors may explain the disconnect:

• Small-cap defense companies often experience elevated volatility.
• Investors remain cautious toward companies still transitioning toward sustained profitability.
• Recent capital raises and acquisitions have created short-term uncertainty despite strengthening the long-term business.

However, the fundamentals continue moving in the opposite direction.

Orders are increasing.

Backlog continues expanding.

Revenue guidance has been raised.

Margins are improving.

And management now has substantially greater visibility into future revenue than it did just a year ago.

Why Investors Are Watching Closely

Global defense spending has accelerated as governments prioritize autonomous surveillance, counter-drone systems, border security, and AI-enabled battlefield technologies.

Ondas has positioned itself across several of these rapidly expanding markets through its portfolio of autonomous aerial systems, counter-UAS technologies, robotic platforms, and command-and-control software.

With hundreds of millions of dollars in backlog already secured and new orders arriving at a steady pace, investors will be watching whether today's contract momentum continues converting into quarterly revenue growth throughout the remainder of 2026.

For long-term investors, the key question isn't whether Ondas is winning business—the company clearly is. The question is whether the market will eventually price the stock in line with a business that continues delivering triple-digit growth while steadily improving its path toward sustained profitability.

If you'd like, I can also make this read more like a Seeking Alpha, The Motley Fool, or InvestorPlace article, depending on your target audience.

You said:

add that just just landed a contract worth 6.9 million on july 20th, 2026 to the autralian department of defence for DTIM Single Operator Counter-sUAS Kits

ChatGPT said:

Here's an updated version of the "A Wave of New Contract Wins" section that incorporates the July 20 announcement while strengthening the overall narrative:

A Wave of New Contract Wins

Ondas has spent 2026 building one of the strongest order pipelines in the autonomous defense industry, consistently announcing new contracts that reinforce growing global demand for its counter-drone and autonomous systems portfolio.

Most recently, on July 20, 2026, the company announced it had secured a $6.9 million contract from the Australian Department of Defence to supply DTIM (Detect, Track, Identify and Mitigate) Single Operator Counter-sUAS Kits. The award, secured through Australian distributor HIFraser, will be fulfilled by DZYNE Technologies—now operating as Ondas Sentinel following the company's acquisition. The portable systems combine long-range drone detection, AI-powered identification, and Dronebuster® mitigation capabilities into a single operator solution, highlighting Ondas' growing presence in allied defense markets.

The Australian contract comes just weeks after another major announcement in which Ondas disclosed more than $40 million in new autonomous defense orders during June, pushing second-quarter bookings above $150 million. Those awards span counter-drone systems, loitering munitions, and autonomous defense technologies across Europe and the United States, underscoring accelerating demand as governments increase investments in unmanned defense capabilities.

Earlier this year, Ondas also secured several significant contracts:

• $20 million initial purchase order as prime contractor for a multi-year national autonomous border protection program. The project is expected to expand through multiple deployment phases as thousands of autonomous systems are rolled out.
• $15.8 million initial order under a large-scale Israeli demining initiative, with the overall program carrying the potential to reach approximately $60 million through follow-on phases.
• A multi-million-dollar European Iron Drone Raider contract to protect critical airport infrastructure in a NATO country following the successful deployment of the company's counter-UAS platform at a major international airport.

Collectively, these awards demonstrate that Ondas is evolving beyond pilot programs and prototype deployments into a company securing repeat, production-scale contracts from defense agencies and allied governments around the world. As global military spending increasingly shifts toward autonomous systems and counter-drone technologies, Ondas appears to be positioning itself as one of the emerging beneficiaries of that trend.