HPQ Silicon: Hidden Gem Entering Commercialization
Another hidden gem is HPQ Silicon, though that may change in the coming months. The Canadian technology company is active in several exciting, future-oriented fields. On the one hand, the company is developing next-generation lithium-ion batteries designed to set new standards in performance. In addition, it is working on technologies for clean hydrogen and energy generation from waste. To achieve this, it uses silicon-based anode materials from its partner Novacium, in which HPQ holds a stake. HPQ also holds exclusive rights in North America, giving it access to a billion-dollar market.
The company has recently reported notable progress in battery technology. In current tests, 21700 cells based on Novacium’s GEN4 silicon anode technology broke the 7,000 mAh mark for the first time, reaching a capacity of 7,030 mAh. This places the company at the forefront of what has been publicly documented in an industrial setting to date. Even more important than the pure capacity milestone, however, is the stability of the cells. Even under these demanding conditions, the GEN4 cells showed minimal capacity degradation. Overall, the batteries stand out due to higher energy density and expanded operating windows. Based on this progress, combined with exclusive commercialization rights in North America and a focus on applications such as electric mobility, drones, and consumer electronics, the company is now poised to systematically advance commercialization.
The sales success of partner Novacium demonstrates that short-term commercialization in North America is realistic. In Europe, the company has received its first concrete customer order from industry. A European drone manufacturer has ordered initial battery packs based on the high-performance GEN4-21700 cells—an important milestone on the path from the lab to practical application. The delivered packs are specifically designed for high-end drones and address the industry’s key bottleneck: longer flight times while maintaining the same weight.
With capacities of up to 13,400 mAh in the current 8S2P configuration and potentially over 20,000 mAh in an expanded version, the technology demonstrates its performance in real-world applications. This should also serve as a reference point for the North American market.
DroneShield: Numbers Fail to Impress
While HPQ Silicon is still a hidden gem among drone stocks, DroneShield can now almost be described as a core investment, at least among the pure plays. The stock of the drone defense specialist has surged more than tenfold since the beginning of 2024 amid significant volatility. Year-to-date, the shares are up over 15%.
The first-quarter results did not spark much enthusiasm. Yet the figures are certainly impressive. Revenue climbed 121% year-over-year to AUD 74.1 million. Customer payments even surged 360% to AUD 77.4 million.
Furthermore, it was the fourth consecutive quarter with positive operating cash flow. During the reporting period, this stood at AUD 24.1 million (Q1 2025: -AUD 17.9 million). Unfortunately, there are no figures on earnings performance. This lack of transparency is somewhat concerning for a company of this size.
The pipeline points to further growth. As of the end of March 2026, the pipeline had a volume of AUD 2.2 billion. This represents 312 potential deals across 30 countries. DroneShield also highlighted a potential major contract valued at AUD 750 million. The company is well-funded for growth, with cash reserves of AUD 222.8 million. The Vision 2030+ was also confirmed. In this plan, DroneShield sets a revenue target of AUD 1 billion per year. Of this, 30% is expected to be recurring revenue.
The market capitalization of the drone defense specialist currently stands at AUD 3.49 billion.
Rheinmetall: German Armed Forces Order Kamikaze Drones
Rheinmetall has not traditionally been regarded as a drone supplier. However, Germany’s largest defense contractor now appears to be gaining a foothold in this segment as well.
Most recently, the company received a major order from the German Armed Forces for FV-014 loitering munition systems. The FV-014 drone has a range of up to 100 km and is equipped with a warhead, including a detonator, weighing approximately 4 kg. Additionally, the drone can remain airborne for up to 70 minutes, monitoring targets until it is deployed. The system is produced entirely within the EU. Delivery of the first kamikaze drones is scheduled to begin in the first half of 2027. The first tranche is valued at EUR 300 million. The total framework contract is worth billions.
Rheinmetall CEO Armin Papperger commented: “In a very short time, Rheinmetall has developed an autonomous drone that combines reconnaissance and strike capabilities. With the FV-014, the Bundeswehr will receive another weapon system that allows it to protect its own forces and engage critical targets quickly, in a controlled manner, and effectively. We are grateful for the trust placed in us and will very soon begin producing the system on an industrial scale in large quantities.”
However, Rheinmetall shares have not yet benefited from the growing drone business. So far this year, the stock has lost about 15% of its value.
Drones have become indispensable in both the military and civilian sectors. Technological advancements are rapid. HPQ Silicon aims to make a splash in the battery sector in the future. Recent tests were convincing, and the order in Europe demonstrates what is possible. The stock is still a hidden gem. In contrast, DroneShield is now valued at AUD 3.40 billion on the stock market. The stock is no longer a bargain. However, its growth remains impressive. Unfortunately, the company’s reporting lacks transparency. Rheinmetall currently lacks momentum.
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