By Kit Norton

Shares of Ondas, an autonomous drone play and a partner with Palantir, reversed lower Tuesday after a big move Monday following the company's fourth-quarter financial results and expectations of significant growth around its autonomous drone business in 2026.

Ondas stock rose as high as $11.37 early Tuesday before falling 2% to $10.68, failing to build on its momentum from Monday when it galloped 8.4% higher.

It appears to be a popular stock among retail traders. Ondas climbed into the top 20 of tracked stocks by the subreddit investor group r/WallStreetBets. Website ApeWisdom shows Ondas is the 17th top-trending issue on r/WallStreetBets as of Tuesday.

Along with Ondas, the iShares U.S. Aerospace & Defense exchange-traded fund declined 0.3% to $222.58 on Tuesday. Drone technology company AeroVironment dropped 4.9% to $196.18 after jumping 4.3% on Monday following new business contracts. Separately, defense IPO Karman Holdings fell 0.5% to $101.85 Tuesday with fourth-quarter earnings due late Wednesday.

As of Tuesday, Karman shares are up 15.6% since the start of the war with Iran.

The investor interest in Ondas comes as the Iran war is spurring demand for military gear. Meanwhile, markets continue to digest President Donald Trump's comments around back-channel diplomacy to potentially bring an end to the war with Iran. Tehran has denied direct talks with the U.S. and fresh attacks by Iran on its Gulf neighbors have tempered optimism.

On Monday, the West Palm Beach, Fla.,-based provider of AI-powered autonomous drone systems announced that 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 reported preliminary results Friday.

For 2025, Ondas Holdings revenue grew 604% to $50.7 million, slightly topping Wall Street estimates of $48.6 million, according to FactSet. The autonomous drone company reported an adjusted net loss of 62 cents per share for 2025. Before the release, Wall Street predicted a loss of 25 cents per share, according to FactSet.

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.

Ondas CEO Erik Brock said in the earnings release Monday that Palantir's artificial intelligence platform "positions Ondas at the center of next-generation, multi-domain operational environments where data fusion, autonomy and AI drive faster, more informed mission outcomes."

While the company isn't close to turning a profit, Ondas broadly sounded an optimistic tone in its earnings release.

The company raised its full-year 2026 revenue target to at least $375 million, up from its previous $170 million -- $180 million view. Ondas also outlined a Q1 2026 revenue target of $38 million -- $40 million, representing approximately 820% year-over-year growth.

Ondas added that the vast majority of this expected growth will come from its autonomous systems, with a backlog currently sitting at $68.3 million.

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

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(END) Dow Jones Newswires

March 24, 2026 16:25 ET (20:25 GMT)

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