Volatus Aerospace: New Contract with Great Potential
The North American company Volatus Aerospace has secured a major client: the Canadian Armed Forces. On September 10, the drone specialist announced a 5-year contract to supply tactical reconnaissance systems. The initial order comprises 100 systems; Canada has the option to call up an additional 4,900. Delivery of the first batch is scheduled to begin in the fourth quarter of 2026. This marks Volatus’s first contract under the Canadian Defence Drone Initiative.
The procurement framework stipulates a maximum of CAD 5,000 per system and a total of up to CAD 25 million. The actual prices remain confidential. The optional 4,900 systems are not yet included in either the firm order backlog or revenue. Canada alone will decide whether to call them up. If Volatus proves itself with the initial deliveries, this could lead to a larger business relationship. The package also includes training, spare parts and technical support.
As early as September 8, Volatus had qualified for all five areas of the government’s drone program. These range from unmanned systems to communications and integration, as well as testing and training. This breadth opens up further opportunities in future tenders. However, each additional contract must be won separately.
Technological progress is also underway. On September 22, Volatus reported successful initial flight tests of its V-Cortex controller. According to the company, navigation was achieved without satellite signals or additional external sensors, using only the standard onboard sensors. This is relevant for missions where GPS is jammed or fails. The modular control system is designed to fit various aircraft. Further tests are scheduled; development work remains before widespread operational deployment.
These advances align with the strategy of CEO Glen Lynch to retain more value creation in-house. Today, Volatus generates revenue through inspection flights, training, and equipment sales, among other things. In the future, the company’s own autonomous systems and software are expected to contribute more significantly. The manufacturing and integration facility in Mirabel, which opened in June, serves as the foundation for this. SKYDRA adds a platform for planning and simulating drone defence. Subscriptions could generate recurring revenue.
Partnerships are expanding the range of applications. Together with Kraus Hamdani Aerospace, Volatus is working on permanently available airborne reconnaissance. The collaboration with Singular Aircraft focuses on autonomous heavy-lift aircraft for wildfire suppression. It also includes applications for energy providers and infrastructure operators. This broadens revenue opportunities. The key question is whether this will result in larger contracts.
The latest figures highlight the need for action. In the second quarter, revenue reached CAD 8.42 million—up 49.5% from the relatively weak first quarter, but about 20% less than a year earlier. According to the company, a defence contract worth about CAD 2.6 million was delayed because of supply chain issues. Delivery is scheduled for completion by the end of 2026. Adjusted EBITDA remained a loss of CAD 4.35 million; in the first half of the year, the net loss totaled CAD 14.09 million. For now, personnel, development, and production ramp-up costs exceed what the business is generating.
At least Volatus has a financial cushion. After a successful capital increase of CAD 34.5 million, the company had CAD 59.2 million in cash on hand as of the end of June. The funds provide leeway for expansion.
The Canadian military contract now removes some of the story’s purely speculative nature. It is the first concrete evidence that Volatus can benefit from the growing demand for sovereign drone technology. The initial volume is still manageable, and the path to profitability remains long. However, if a significant portion of the 4,900 options are exercised and further orders follow from the Defence Drone Initiative, 2027 could become a decisive year for growth.
The contract has already attracted attention on the stock market. Analysts even see the contract as a potential turning point. Stifel analyst Greg MacDonald reaffirmed his “Buy” recommendation and the price target of CAD 1.00, which currently represents an upside potential of just under 60%. The expert expects Volatus to deliver the initial 100 systems this year, with potentially larger orders following starting in 2027. Even more important than the immediate order volume is proof that Volatus can win government defence contracts.
For risk-tolerant investors, Volatus remains an interesting bet on Canada’s drone procurement. If the company generates follow-on orders and further improves earnings, the stock still has significant upside potential.
Infineon: The AI Boom Needs Power Semiconductors
Infineon is benefiting from the rising power demand of data centres. Its power semiconductors help convert and distribute energy efficiently. Recent company announcements support this narrative. On September 9, Infineon and SolarEdge expanded their collaboration on AI data centres with 800-volt DC power supplies. Electronic circuit breakers are designed to interrupt fault currents particularly quickly.
The DAX-listed company is supplying silicon carbide technology for this purpose. On September 16, a portfolio move followed: The NOR flash and F-RAM memory business is set to be sold to Winbond for USD 1.12 billion. The transaction is scheduled to close in the second half of 2027, subject to regulatory approvals. This sharpens the focus on the core growth areas.
Demand is already evident. In the third fiscal quarter, revenue reached a record high of approximately EUR 4.2 billion. Segment earnings totaled EUR 797 million, with a corresponding margin of 19.1%. For the final quarter, the Executive Board expects revenue of around EUR 4.7 billion and a margin of approximately 23%. At the same time, management says orders from the automotive industry are picking up. This could provide a second driver for AI growth. However, the stock remains tied to investment cycles and delivering on its ambitious outlook.
25 banks and research firms recommend the stock a “Buy”; only 3 issue a “Hold” rating. No analyst currently advises “Sell”. The average price target of EUR 87 leaves over 50% upside potential. With estimated P/E ratios of 20 for 2027 and 15 for 2028, the valuation appears reasonable given the expected operating profit growth in the coming years. For speculative investors with a long-term horizon, Infineon remains an interesting portfolio addition and offers an established, already profitable opportunity to participate in the expansion of AI infrastructure.
M1 Kliniken: Lower Consolidated Revenue, Stronger Core Business
For M1 Kliniken, it is worth taking a closer look at the half-year results released on September 9. Consolidated revenue fell from EUR 183.5 to 76.6 million. This was primarily due to the sale of Haemato Pharm and the resulting exit from the pharmaceutical distribution business. Things are going significantly better in the now-crucial beauty business. Revenue grew 11.0% to EUR 56.9 million, while operating profit before interest and taxes rose by as much as 23.8% to EUR 18.6 million. The EBIT margin rose from 29.4% to 32.7%.
More efficient processes and the expansion of medical capacities are paying off. Following 5.7% growth in the first quarter, the beauty business grew by 16.4% in the second quarter. At the Group level, a one-time, non-cash deconsolidation effect of EUR 4.1 million weighed on earnings. Adjusted for this, EBIT rose by 9.5% to EUR 19.7 million. The revenue decline thus masks a more attractive operating performance.
By 2029, M1 aims to achieve revenue of EUR 200 to 300 million in the beauty segment with a sustainable EBIT margin of at least 20%. New specialty centres in Germany and abroad are expected to drive this growth. The valuation is also worth a look. The analyst consensus estimates 2027 earnings at EUR 1.27 per share, which currently translates to a P/E ratio of just under 16. This is currently higher than the peer group average. However, if M1 Kliniken’s expansion pays off, the valuation premium appears justified and even moderate. However, new locations must operate at full capacity, and the company must recruit qualified doctors. Consumer sentiment also influences demand for cosmetic treatments. Analysts remain very confident, nonetheless. The average price target of EUR 29 offers nearly 50% upside potential. For a speculative portfolio, M1 shares therefore remain an attractive option.
Volatus offers the greatest operational potential and the highest upside potential of the trio. However, the Canadian “hot stock” also remains the most speculative stock. Infineon combines AI expansion with an established industrial business. The DAX stock is an interesting addition to a portfolio and offers investors with a long-term horizon a good opportunity to participate in the expansion of AI infrastructure. M1 Kliniken already generates high margins but still needs to show it can scale its business model internationally. For speculative investors, however, the M1 stock remains an attractive option.
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