Ondas Falls 6% After Palantir Defense AI Launch

Ondas Inc. shares fell 6% to $6.32 in afternoon trading on October 12, despite the company announcing a new defense artificial intelligence venture with Palantir Technologies. The stock is now down 35% year to date.

The announcement came alongside the launch of Regna AI, a joint effort between Ondas and Palantir to develop sovereign AI systems for national defense operations. These systems are designed to run on government-controlled infrastructure and connect software to Ondas's drones and autonomous systems. Ondas did not disclose any financial terms, revenue expectations, or specific contract values for the venture.

Competitors in the uncrewed and counter-drone markets also saw declines. AeroVironment stock dropped 3% to $123.74, while Kratos Defense & Security Solutions shares slipped 2% to $39.73. The Defiance Drone and Modern Warfare ETF fell 5%, outpacing the 1% drop in the S&P 500.

Ondas had previously partnered with Palantir on the SkyWeaver platform, which uses agentic AI for intelligence, surveillance, and reconnaissance. In the first quarter of 2026, Ondas completed five acquisitions, including Rotron Aerospace, Mistral, and World View, expanding its portfolio into loitering munitions and stratospheric surveillance.

The company targets full-year 2026 revenue of at least $390 million and reports a pro forma backlog of $457 million. Unlike its larger peers, Ondas is small enough that a software venture could significantly alter its revenue mix. However, without a funded contract, the company's outlook remains dependent on hardware sales.

AeroVironment holds a funded backlog of $1.5 billion and sells systems like Switchblade and Puma. Kratos builds the Valkyrie combat drone and raised its 2026 revenue guidance to between $1.75 billion and $1.81 billion. Both companies have seen steeper year-to-date declines than Ondas, with AeroVironment down 49% and Kratos down 48%.

Ondas cites a two-year pipeline of $4.3 billion across more than 45 program submissions. The company has guided toward adjusted profitability by the first quarter of 2028. Until Ondas and Palantir publish specific terms or name a government customer, Regna AI remains an unpriced framework rather than a confirmed revenue source.