Defense Drone Sector Heating Up: Is ONDS' $35M PDW Bet the Right Move?

Ondas Holdings just dropped $35 million into Performance Drone Works, and it’s a pretty bold play in the booming defense-tech space. Here’s what’s actually happening under the hood:

The Money Move

PDW’s getting three things out of this: ramped-up production for their C100 and AM-FPV combat drones, more engineering firepower for autonomy upgrades, and a fully domestic, NDAA-compliant supply chain. Translation: they’re betting big on the U.S. military drone arms race.

Ondas is already seeing the payoff. They just landed an $8.2 million deal to deploy counter-UAS systems at a major European airport, and their revenue forecast just jumped from $25M to $36M for 2025. For 2026? They’re targeting $110M+. That’s not a typo.

The Competition’s Moving Fast Too

Draganfly snagged a major military order for Commander 3XL drones. Red Cat Holdings? Posted 646% YoY revenue growth in Q3 (now at $9.6M), powered by the Army’s $35M SRR Tranche 2 program expansion. The whole sector’s accelerating.

The Valuation Question

Here’s the thing: ONDS stock is up 587% in six months, trading at a 31.3x forward P/S ratio—that’s 15x higher than industry peers. It’s running hot. The Zacks consensus on earnings has been revised upward hard, but at these multiples, execution becomes everything. One stumble on delivery or production scaling, and the air comes out fast.

Bottom Line

The $35M investment makes strategic sense—consolidating ONDS’ position in autonomous defense while PDW scales combat capabilities. But the stock’s already priced in a lot of optimism. Watch Q1 2025 earnings and production metrics closely.