Ondas Holdings Inc. (ONDS) saw its stock price plummet by 5.07% during Thursday's intraday trading session, following the announcement of a $35 million strategic investment in Performance Drone Works (PDW), a veteran-led defense-technology engineering firm specializing in advanced robotics for military purposes.

The investment, aimed at accelerating the development of combat robotics manufactured at scale, is set to bolster Ondas' AI-powered autonomous defense platforms. According to the company, PDW plans to utilize the funds to increase production capacity, expand its engineering staff, and acquire components. The investment will support scaling up production at PDW's 90,000 square-foot facility in Huntsville, Alabama, which has the capacity to produce up to 100,000 advanced drone systems annually.

Despite Ondas Holdings framing this as a strategic move to strengthen its position in the defense sector, the market's immediate reaction appears negative. The stock's sharp decline suggests that investors may have concerns about the substantial financial commitment or skepticism regarding the potential returns on this investment. It's possible that shareholders are wary of the impact this significant expenditure might have on Ondas' short-term financial position or are uncertain about the long-term benefits of entering the competitive military robotics market.