Johan Ekroth
AI Infrastructure/Space/Defense Investor, Bottleneck Research
Electro Optic Systems is the best public stock for the rising importance of space warfare, a view matched by first-hand observation of NATO's Aurora exercise in Sweden as a reserve officer. As @PhotonBull argues, modern war runs on satellites for GPS, drone datalinks and over-the-horizon ISR, and whoever controls the orbital layer wins the surface war by default. x.com x.com
Electro Optic Systems is accumulating meaningful defense and space opportunities. It has MoUs for Czech vehicle systems and Indian high-energy lasers, was selected for the US Space Force's satellite-tracking reserve, and has an A$700m Kuwait counter-drone contract that could drive over 80% of revenue in 12–24 months. x.com
Non-ITAR defense suppliers such as Electro Optic Systems, BAE Systems, Theon and Rheinmetall are an overlooked source of alpha as Europe, Asia and the Middle East shift defense spending away from US ITAR-controlled equipment. That shift comes with huge spending, yet US-based investors misunderstand it and wrongly call defense tech dead. Eurosatory confirmed the view, and the big alpha is not in drone builders. x.com x.com x.com
Electro Optic Systems' integrated defenses meet nations' need to counter low-cost drones without relying on costly interceptors. Its £370 million nationwide Kuwait contract uses MARSS' NiDAR to connect sensors and effectors in a scalable network. EOS CEO Andreas Schwer says a deployment of this scale shows where the market is heading; Europe is next in view. x.com
Electro Optic Systems' counter-drone business gets a massive boost from an A$700m contract for nationwide counter-drone defense. x.com
Laser weapon makers nLIGHT and Electro Optic Systems look increasingly mispriced every day the war continues, because they are the West's answer to asymmetric warfare with no legit competitors at low-billion market caps. Per @KawzInvests, the US spends $2 million per Patriot interceptor against $2,000 Iranian drones while a laser shot costs $10; nLIGHT is the only US-listed pure-play directed-energy stock, with a $171M Golden Dome contract, and EOS has the only ITAR-free 100kW laser weapon. … Show more
Electro Optic Systems trades at about 2x backlog versus about 28x for nLight, despite growing faster at higher margins. Q1 cash receipts rose 220% to A$72.6M versus nLight's 55% revenue growth, gross margin is 63% versus 33%, and its A$726M backlog, 60-80% expected to convert in 2026-27, is 4.5x larger. After buying MARSS it owns the full counter-drone kill chain, its ITAR-free lasers are winning exports, and management guides to first profit in 2026. The chart is near a breakout above $9.60. … Show more
Sovereign equity joint ventures turn the order books of AST SpaceMobile and Electro Optic Systems into structural demand with cheap growth capital, and the market has not fully priced it. AST and Rakuten's equal JV won Japan's J-LEO tender, with Tokyo committing ¥150B, about $922M, over three years. EOS's 50/50 UAE laser-weapon JV with Gen5 brings $40M and potential minimum orders of $250M and $290M, atop a firm $124M Slinger order. Other mid-sized powers should copy the template. x.com
Listed space stocks were sold because SpaceX's IPO vacuumed up the sector's marginal dollar, not because their contracts stopped. AST SpaceMobile launched the three largest comm arrays ever, with 60 carriers signed; Rocket Lab booked $663M from the Space Force in nine days; Planet Labs' backlog exceeds annual revenue; BlackSky printed its first EBITDA-positive quarter; Firefly, a Golden Dome interceptor selectee, trades below its IPO price; and Redwire's revenue rose 90%. x.com
Defense, drone and space stocks such as AST SpaceMobile, Rocket Lab, Planet Labs, Kratos and AeroVironment are set to receive non-cyclical, perpetual capex while many sit 60%-70% below their highs. Spending is rising in the US and across the rest of the world, flowing to names that are not crowded or recently up 1,000%. The sector has reset and been left for dead, making it a target basket for next year, including Ondas, LightPath, nLight, Karman and Inflection Point. x.com x.com
Electro Optic Systems, nLIGHT and LightPath are defense stocks to own as forward multiples may compress with no high-profile conflicts in sight. US and European rearmament is unchanged and earnings should grow solidly for two to three years, but upside may take patience. Well-managed, profitable firms with backlog growth in the fastest-growing niches should hold up better than cash-burning drone makers. EOS's UAE joint venture, laser contract and $124 million RWS contract add optionality. x.com
