By Kit Norton

Shares of Ondas, an autonomous drone play and a partner with Palantir, sank Thursday, wiping out gains from earlier this week even as Wall Street signaled it sees upside.

Ondas Holdings stock fell 8.5% to $9.43 on Thursday, entering negative territory for the week despite surging 8.4% on Monday following the company's fourth-quarter financial results and expectations of significant growth around its autonomous drone business in 2026.

Shares are currently down 6.2% on the week and on pace for a second consecutive monthly decline.

The stock's decline comes as Northland Securities on Thursday raised its Ondas price to $18 from $16, keeping an Outperform rating on the shares.

Northland analysts wrote that Ondas executives touted "torrid demand" for its autonomous drone products on its Wednesday earnings call and that the company appears "well on their way to being a scaled, multi-domain, autonomous systems company." The firm also noted that Ondas has $1.5 billion in cash that could be used for future consolidation.

Meanwhile, Maxim Group on Wednesday also hiked its Ondas price target to $22 from $16, representing 113% upside compared with Wednesday's closing price of $10.31. The firm has a Buy rating on Ondas stock with the view that the autonomous drone company is well-positioned to capitalize on rising defense budgets and demand for autonomous defense technologies.

Investor interest around Ondas has picked up as the U.S.-Iran war is spurring demand for military gear.

While rumors of peace talks swirl, Meir Kliner, president of Ondas Autonomous Systems, said on Wednesday's fourth-quarter earnings call that demand for the company's services will remain after the Iran war ends.

"We believe we have the right product at the right time," Kliner said. "We have seen a very strong demand right now."

"Looking ahead, we don't see these as a short-term dynamic. If anything, once the current conflicts end, there will be a broader recognition that these threats are not going away. So the budgets for the government and the defense organization, it's going to increase dramatically and hopefully we will be there to supply our capabilities with our companies, " Kliner added.

The conference call came two days after the West Palm Beach, Fla.,-based provider of AI-powered autonomous drone systems announced fourth-quarter revenue soared 634% to $30.1 million. Ondas saw a net loss of $101 million for the quarter, a steep increase from a $10.3 million loss a year ago.

The company also raised its full-year 2026 revenue target to at least $375 million, up from its previous view of $170 million -- $180 million. Ondas outlined a first-quarter 2026 revenue target of $38 million -- $40 million, representing approximately 820% year-over-year growth. Ondas sees the vast majority of this expected growth coming from its autonomous systems, with a backlog currently sitting at $68.3 million.

In early March, Ondas reported it received multiple orders totaling approximately $6 million for dozens of counter-drone systems from its current defense and homeland security customers in the Middle East and other regions.

Meanwhile, on March 11, Ondas and Palantir announced a strategic partnership to integrate Palantir's foundry product into Ondas' autonomous drone platforms worldwide.

Along with Ondas, the iShares U.S. Aerospace & Defense exchange-traded fund declined 2.6% to $220.07 on Thursday. Drone technology company AeroVironment dropped 1.6% to $195.91 after similarly jumping earlier this week following new business contracts.

Separately, defense IPO Karman Holdings sank 13.7% to $86 after reporting late Wednesday mixed fourth-quarter results and hiking its sales forecast for the year.

Erik Prince-backed drone technology start-up Swarmer advanced 15.1% to $36.71 on Thursday. Shares traded as high as $65.04 in the days following its March 16 IPO, which were priced at $5 a share.

Write to Kit Norton at kit.norton@barrons.com

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March 26, 2026 16:24 ET (20:24 GMT)

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