Kraken Robotics is the subsystem prime for underwater drones, putting $3-5 million of content per hull in reach as Anduril and navies scale uncrewed fleets. Its offering spans batteries, sonar and navigation via Covelya/Sonardyne. Funds that bought near CAD $2 two years ago have spent four months clearing their positions, and that selling is mostly past. x.com  x.com  x.com 

Kratos and Kraken Robotics are falling on sector macro, not business decline, so a strong year-end close looks likely. Both hit 52-week lows, down 68% and 64% from this year's highs. Per Bernstein, peace headlines and a stalled US budget put defense at a 12% discount to the S&P, but it expects the 2027 budget to rise over 10%. Raymond James notes tax-loss selling hits YTD losers into mid-October, and they often lead the rebound. Kratos has a record $2.08B backlog; Kraken guides $290-320M. x.com 

Kraken Robotics is stuck in a trap as its key catalyst, the Anduril subsea ramp, is delayed by at least a year. That ramp likely needs a US battery facility and a Navy order to confirm, and the defense budget showed no large FY27 subsea-drone order. The market has also turned on drone and defense stocks after they ran ahead of a multi-year buildout, and without an uplisting from its junior exchange institutional ownership and volume stay thin. Second-half earnings may bring some support. x.com 

Kraken Robotics' organic results are strong, and adding Covelya should make the picture even better. Per Kraken Robotics, Q1 2026 revenue grew 35% year over year and 2026 guidance was reiterated. x.com 

Defense and drone stocks have been oversold even though their fundamentals have not changed. Ondas offers explosive growth and counter-drone exposure, Kratos has Valkyrie and hypersonics, AeroVironment has Switchblade and Army contracts, Unusual Machines has leverage to drone components, and Red Cat has Army wins and NDAA-compliant drones. x.com 

Kraken Robotics is not yet a buy despite falling almost 60% from its high. It should first report combined results with Covelya that preserve a credible growth and margin path, and the stock should form a base; the defence factor remains deeply out of favor. @DeepSailCapital argues it is near a bottom, expecting CAD 0.20 of 2028 EPS, mid-20s to 30s revenue growth and product ramps with Anduril. x.com  x.com 

Drones are the future of military warfare, and Ondas, Kratos Defense, Unusual Machines and AeroVironment are the best drone stocks to buy in what is a second chance at the sector. Another big contract or acquisition announcement is only a matter of time. x.com 

Kraken Robotics' customer base is broadening, and on its earnings call it said it just landed one of the largest US defense companies as a customer, unnamed. It announced $28 million of SeaPower battery and SAS orders, including battery contracts from three large international defense companies and a SAS order from a new commercial UUV maker. CEO Greg Reid said its products are integrated, or being integrated, into more than 30 UUV platform types worldwide. x.com  x.com  x.com 

Ondas Holdings' valuation is hard to justify, and its long-term risk/reward looks less favorable than AeroVironment or Kratos. Per @rzayev7895's read of the earnings, growth comes from acquisitions rather than organically, share count rose 200-300%, market cap roughly quadrupled, cash comes from stock sales, and most backlog arrived with acquired companies. Ondas is more than drones, with critical private networks, but that does not change the valuation view. x.com  x.com  x.com 

Recent US Navy unmanned-vehicle contracts are a big deal for Kraken Robotics that the market is ignoring. HII, a confirmed Kraken sonar customer, won a medium unmanned vessel award of 10 vessels at $40M each, and three of four finalists for the CAMP large underwater vehicle, including Anduril, have strong ties to Kraken. With revenue above $300M after the Covelya deal, smaller contracts move the needle less, and at 15x NTM EBITDA the stock may bottom near $4. x.com  x.com  x.com  x.com