ESCALATION IN THE STRAIT OF HORMUZ: OCCIDENTAL, VOLATUS AEROSPACE, AND PALANTIR IN THE CROSSHAIRS OF STOCK MARKET TRADERS

STAGE 1 – THE RAW MATERIAL: OCCIDENTAL PETROLEUM

At the very beginning of the chain is oil. Prices surged after the outbreak of the Iran conflict but have since fallen well below the USD 100 mark. If hostilities continue, “black gold” could become scarce again—and thus more expensive. One company that would benefit directly is Occidental Petroleum. At its core, the company is a traditional oil and gas producer focused on the Permian Basin—the most productive oilfield in the US, stretching from western Texas to southeastern New Mexico. In addition, it has offshore operations in the Gulf of Mexico, the chemicals division OxyChem (raw materials such as chlorine and soda ash for industry), and 1PointFive, a growing pillar of the business focused on CO₂ capture (Direct Air Capture), which is also intended to be marketed as a service to other industries in the long term. However, the core business remains production. When oil prices rise, profits rise almost in direct proportion—it is precisely this correlation that makes the stock sought after during periods of market turmoil.

Berkshire Hathaway, the holding company controlled by stock market icon Warren Buffett since 1965, has held a stake in Occidental since the debt-financed acquisition of Anadarko Petroleum in 2019 and has been gradually buying additional shares ever since. Berkshire is now the largest single shareholder, with more than 26% of the shares. What Buffett values most about Occidental is the combination of an easily understandable, albeit capital-intensive, business; the comparatively low production costs in the Permian Basin; and the disciplined capital allocation under former CEO Vicki Hollub, who consistently reduced debt and sold off non-core assets following the Anadarko acquisition. Since Hollub recently retired, it is now up to her successor, Richard Jackson, to continue this successful strategy. Since he was previously responsible for operations, this should not be a problem. Buffett’s investment is still regarded by the market as a kind of seal of approval for the business model, as reflected in the stock’s valuation. With an estimated price-to-earnings (P/E) ratio of about 13 for 2027, the stock is not a bargain compared to European competitors like Shell or TotalEnergies, but it is roughly on par with major US competitors such as ExxonMobil and Chevron.

STAGE 2 – THE HARDWARE: VOLATUS AEROSPACE

The second sector that could benefit from the conflict is military hardware—specifically, drones, the new key technology in modern warfare. Here, Volatus Aerospace is increasingly positioning itself as one of the most interesting names outside the well-known defense heavyweights. The Canadian company, originally a pure-play drone and flight service provider, is systematically shifting its business model toward defense and artificial intelligence. Just last week, the company became one of the first in Canada to receive certification from Transport Canada for its Canary aircraft under the new “Pre-Validated Declaration” process. The Canary is thus the first Remotely Piloted Aircraft System (RPAS) to meet the safety requirements for beyond-visual-line-of-sight flights in populated areas using only onboard collision-avoidance technology. Currently, Volatus Aerospace is showcasing its portfolio of autonomous systems, SKYDRA drone defense solutions, and its new V-Cortex AI control platform at MASS 2026 in St. John’s, a defense and security conference focused on the maritime and Arctic regions, which runs through July 16.

Strategically, this fits into a larger picture: Canada’s new procurement strategy aims to award 70% of defense contracts to domestic companies in the future; Volatus has already secured training contracts within the NATO framework and has been selected for the next phase of the US “Drone Dominance Program,” which aims to establish a Western supply chain for hundreds of thousands of drone units. Since Volatus manufactures primarily in Canada, the company also benefits from stricter origin requirements for components, which are holding back many competitors that rely on supplies from sanctioned countries. The current escalation in the Middle East is likely to further fuel this already ongoing wave of demand. With a share price of CAD 0.57 (currently EUR 0.35 in Germany) and a market capitalization of just over CAD 400 million, the stock remains largely undiscovered, though several analyst firms already cover it. Price targets range from CAD 0.95 to 1.25, implying significant upside potential if analysts’ expectations are met. Most recently, the management team led by CEO Glen Lynch has consistently delivered.

STAGE 3 – THE SOFTWARE: PALANTIR TECHNOLOGIES

The third sector that could return to the spotlight among stock market investors is surveillance software and data analysis, which is best exemplified by Palantir’s stock. The company, now based in Florida after two relocations, is exactly where Volatus aims to be with V-Cortex. At its core, Palantir sells platforms that consolidate enormous amounts of data, often scattered across many systems, and make it analyzable. Gotham is aimed at intelligence agencies, the military, and security authorities; Foundry targets industrial companies; and with AIP, AI models are embedded directly into existing workflows and decision-making processes, rather than simply serving as a chatbot on the sidelines. Customers often commit to the company’s proprietary “ontology”, the data structure in which all processes are mapped, for years, resulting in very high switching costs and correspondingly robust growth.

It is precisely these close ties to intelligence agencies and the military—Palantir was founded in 2003 with early backing from the CIA’s venture capital arm, In-Q-Tel—that also contribute to the company’s reputation as something of an enigmatic and, to some, unsettling business. Critics point to the software’s role in target identification, border surveillance, and deportation operations, as well as to the fundamental lack of transparency in the systems, which civil rights activists fear could serve as a blueprint for a surveillance state. This ambivalence has accompanied the stock since its IPO. Some see it as an indispensable infrastructure provider for the West’s AI-powered defense, while others view it as a company with excessive access to sensitive data. The hype surrounding the stock, which at times drove the price above USD 200, has subsided since the start of the year—a consequence of its high valuation. Even at the current price of around USD 127 (EUR 111 on German exchanges), the 2027 P/E ratio stands at an ambitious level of over 60. However, the company is growing rapidly. In the first quarter, revenue rose by 85% to USD 1.63 billion, and operating income more than doubled from USD 176 million to USD 754 million. In addition, the management team led by CEO Alex Karp has raised its full-year growth forecast from 61% to 71%. The consolidation phase may end with the next quarterly results on August 10, provided it becomes clear then that tensions in the Middle East are not easing.

THREE INDUSTRIES, THREE PATTERNS OF REACTION TO THE CONFLICT

Oil reacts immediately and in the short term; defense hardware, as seen with Volatus, benefits from structural tailwinds and catch-up potential. AI-driven software, such as that offered by Palantir, shows where value is shifting in the long term—regardless of daily developments on the front lines. Based on individual stock performance, the following picture emerges. For Occidental Petroleum, the analyst consensus expects revenue and earnings to stagnate over the next few years, though persistently high oil prices could fundamentally change this outlook. For Volatus Aerospace, revenue growth of 50% is expected for next year; the uncertainty lies in the timing of the break-even point. However, its valuation is surprisingly low compared to other drone specialists, especially since its business model is shifting further and further toward software and AI. Palantir is growing the fastest thanks to its less capital-intensive business model, but it also has by far the highest valuation among the three companies.

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