With war once again raging across the Middle East, the US back to its strong-arming ways in Iran and Venezuela, and the latest installment of the Russia-Ukraine War entering its fourth year, demand for defense technology is trending steeply up and to the right, drawing new investors to the space to capitalize on this momentum.
Interested investors should, however, take care to set their FOMO to one side and remember that successful defense stocks, like any other sector, hinge on the marketability of unmet needs and the utility underpinning the products a given company has on offer. In other words, problem size and solution efficiency are what will ultimately differentiate competing names on your watchlist.
This article is disseminated in partnership with defense stocks Kopin Corp. and Mobix Labs Inc. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Now, while any respectable company can put a persuasive PowerPoint deck together, keen to attract venture capital, retail investors, such as you and me, will have a better chance at satisfactory returns if we let a company prove itself in the marketplace first – at least for a year or two – granting us cold, hard data on which to base our due diligence and potential allocations.
Two candidates that have done just that are Kopin and Mobix Labs, a pair of small-cap technology stocks quickly establishing themselves as go-to names in their fields, including strong presences in the defense sector, handily earning their spots in the newest edition of Stockhouse’s Weekly Market Movers.
Kopin Corp.
Kopin, market capitalization US$404.57 million, is an optics specialist that develops and produces display modules, eyepiece assemblies, image projection modules and other patented display systems primarily for defense, aerospace and consumer-facing clients.
The company is the world’s top provider of microdisplay technology – miniaturized display units with high-resolution screens – granting it a front-row seat to an accelerating market expected to reach US$5.3 billion by 2030, compounding at a substantial 26.4 per cent annually.
Kopin’s tier-1 clientele, spread between defense (80 per cent) and business/consumer (20 per cent), includes the US Army, General Dynamics and Collins Aerospace, whose high profiles have allowed the company to build an approximately US$720 million opportunity pipeline, more than 16 times trailing twelve month revenue, setting a prospective tone for the years ahead. Noteworthy initiatives to look out for include:
- A partnership with Therion, a global leader in night-vision and thermal imaging systems, which invested in Kopin to bring its DarkWave module into production, enabling night vision goggles to transform into augemented reality systems.
- A contract with Lockheed Martin to produce an eyepiece for the defense giant’s Next-Generation Short-Range Interceptor, with initial production of 2,000 units at US$5,000-$10,000 per unit expected in 2027 and volume expected to ramp up over the next 10 years.
- A US$3.6 million order for an avionic helmet-mounted display destined for a rotary‑wing military aircraft platform for a European defense customer, delivering flight symbology, navigation cues, aircraft status and weapons‑system information directly into a pilot’s line of sight.
Boasting established manufacturing facilities in the US and the United Kingdom, proprietary technology and established trust across industry leading clients, Kopin stands alone in the microdisplay space, serving as the sole supplier across numerous of its programs.
This differentiated positioning has helped the company ride the rising waves of US and EU defense spending, generating an average of US$45.9 million in revenue from 2021 to 2024, while putting itself on track to reach a five-year high in fiscal 2025, all while carrying no debt and consistently reducing negative cash flow from operations.
With a customized leadership team at the helm, fortified with microsystems, defense, security and photonics experience, I believe Kopin deserves conviction when it comes to continuing to grow its pipeline, post solid income statements and trace a path to profitability.
Investors have been slowly catching on to the company’s upside, lifting Kopin stock (NASDAQ:KOPN) by 68.75 per cent year-over-year, though you’re still nursing a 73.85 per cent loss since 2021. Shares last traded at US$2.16.
Michael Murray, chair, president and chief executive officer (CEO) of Kopin, sat down with Ricki Lee to discuss the US$3.6 million European military contract. Watch the interview here.
Mobix Labs
Second in our pair of small-cap stocks is Mobix Labs, market cap US$87.52 million, a connectivity and electronics provider catering to demanding environments in defense, aerospace and technology. The company, based in Irvine, California, divides its business into four key areas:
- Electromagnetic interference (EMI) interconnect solutions for secure aerospace and GPS systems.
- Active Optical Cables for AI data centers.
- 5G communication solutions.
- Wireless systems spanning 5G, radar and imaging sensors.
Since its founding in 2020, Mobix has managed to pair its diversified offering with a high-profile customer base of its own, including Gulfstream, GE Healthcare, BAE Systems and Raytheon, adding value through a proven ability to tailor technical skill to project needs. Recent milestones highlight the company’s healthy sales pipeline, well-versed at closing deals with tier-1 clients, including:
- Contracts to provide filter connectors for the Apache helicopter and USB connectors for the Chinook helicopter, both commanding iconic presences within the US military (January 2025).
- A partnership with a national US rail carrier to advance AI-powered safety (August 2025).
- A follow-on communications contract with the US Navy (October 2025).
- Recently acquired FAA certification for its drone‑based sensing platform (February 2026).
Concurrently, Mobix has translated its growing pipeline into improvements on the income statement, earning US$9.9 million in revenue in 2025, up by 54 per cent year-over-year, supported by a 10.6 per cent jump in gross margins and an almost 20 per cent reduction in operating losses.
Mobix’s most recent catalyst for shareholder value, an EMI filter contract for the US Navy’s Tomahawk cruise missiles – currently deployed in active military operations – sent shares soaring by more than 500 per cent in a single day, further reinforcing the company as a reliable player in the US defense supply chain.
Even after its exponential run-up, Mobix Labs stock (NASDAQ:MOBX) remains flat year-over-year, giving back more than 80 per cent since listing in 2023, offering investors an overly pessimistic entry point to the company’s formidable growth engine.
Phil Sansone, CEO of Mobix Labs, joined Ricki Lee to shed light on the intricacies of the Tomahawk contract and how it positions the company for future growth. Watch the interview here.
Thanks for reading! I’ll see you next Monday for a new edition of Weekly Market Movers, where I delve into companies that sat down with Stockhouse for an interview over the past week. Here’s last week’s article, in case you missed it.
Join the discussion: Find out what investors are saying about these defense technology stocks on the Kopin Corp. and Mobix Labs Inc. Bullboards and make sure to explore the rest of Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein.
For full disclaimer information, please click here.
