PDW's $35M funding: How Ondas is reshaping the defense autonomous systems market landscape

The U.S. defense technology sector welcomes a major deal. Ondas Holdings Inc. (ONDS) announced a $35 million investment in Performance Drone Works (PDW). This funding will flow directly into Ondas’ Autonomous Systems (OAS) business unit, empowering PDW’s combat-grade drone system development through private wireless solutions. This strategic capital injection not only strengthens PDW’s position in the defense innovation ecosystem but also further consolidates Ondas’ core competitiveness in autonomous defense platforms.

$35 Million Expansion Plan

The financing obtained by PDW will focus on three key areas. First is production scaling—accelerating capacity building for the C100 and AM-FPV flagship platforms to meet the surging procurement demands of the defense sector. Second is talent reserve, especially expanding engineering forces in autonomous systems, payload integration, and system design. Third is supply chain localization—establishing a fully domestic procurement system compliant with the (NDAA), locking in the advantages of U.S. manufacturing from the source.

Behind this three-pronged strategy reflects Ondas’ deep judgment of the autonomous defense market prospects. As a rising force in unmanned combat systems, PDW’s technological capabilities synergize with Ondas’ wireless communication infrastructure. The two companies have launched joint R&D programs, focusing on exploring domestic defense innovation and enhancing U.S. military operational capabilities.

Ondas’ Position in the Competitive Landscape

In the industry competition landscape, Ondas is not fighting alone. Draganfly Inc. (DPRO) is also actively expanding its military drone portfolio. Its Commander 3XL drone recently secured international military orders, successfully entered the U.S. Army procurement pipeline, and was selected by a major defense department for high-end missions. Through intensive strategic partnerships, this company continues to strengthen its multi-mission drone position in the global defense market.

A more aggressive competitor is Red Cat Holdings Inc. (RCAT). The company’s Q3 revenue reached $9.6 million, a 646% year-over-year increase and a 200% quarter-over-quarter growth. Behind this exponential growth is the explosive expansion of the U.S. Army SRR Phase II program—after approval in July 2025, contract value has risen to approximately $35 million. Red Cat has thus raised its full-year 2025 revenue guidance to $34.5–$37.5 million, directly competing with Ondas’ new forecast of $36 million.

Ondas’ Growth Logic and Financial Performance

Ondas has recently shown multiple performance highlights. The latest major European order—an $8.2 million contract from a leading European security agency—will be used to deploy the Iron Drone Raider counter-UAV system at one of Europe’s largest airports. This project is led by Ondas’ Airobotics unit, covering system integration, on-site installation, and deployment.

Based on the strong performance of the OAS business and recent M&A integration, Ondas has raised its 2025 revenue forecast from $25 million to $36 million. An order backlog of $23.3 million provides ample production visibility. Although Ondas Networks’ revenue contribution is limited due to delays in railway network deployment, the company expects backlog to hit new highs by year-end, with a stronger momentum in 2026—targeting at least $110 million in revenue, though quarterly fluctuations will still depend on order pace and infrastructure progress.

Stock Surge and Valuation Reassessment

The market has already sensed the valuation re-rating opportunity for Ondas. Over the past six months, ONDS stock soared 587.3%, far outperforming the communication network software industry average decline of 6.7%. However, this surge also brought valuation premiums—ONDS’ 12-month forward price-to-sales ratio stands at 31.3x, well above the industry average of 2x, forming a clear valuation premium.

Notably, Zacks analysts have significantly upgraded ONDS’ current-year earnings expectations over the past 60 days, reflecting a market reassessment of the company’s growth trajectory. Currently, ONDS holds a Zacks Rank 3 (Hold), indicating that while fundamentals have improved, the stock price has already fully reflected some of the positive factors.

Industry Differentiation and Investment Insights

The defense tech drone sector is experiencing clear differentiation. Leading players are forming a Matthew effect through capital injection, order acquisition, and strategic mergers and acquisitions. Ondas, through PDW investment, is entering more manufacturing and autonomous segments; Red Cat leverages large U.S. Army orders as growth engines; Draganfly relies on international military orders to maintain growth momentum. All three companies are competing in the dimensions of localization, NDAA compliance, and autonomous systems.

For investors focusing on the defense tech niche, it is crucial to distinguish between short-term stock price speculation and medium-term order support. Ondas’ $35 million PDW investment, $8.2 million European airport order, and $110 million revenue target in 2026 are all based on real customer demand. These factors will gradually materialize in 2025, but whether they can continue to outperform expectations depends on subsequent order flow and the commercialization of new product lines.