Ondas Retreats 6% Despite Regna AI Launch With Palantir; AeroVironment Drops 3%, Kratos Slips

Ondas Inc. (NASDAQ:ONDS) stock is at $6.32, down 6% in afternoon trading, days after the company unveiled a defense AI venture with Palantir Technologies (NASDAQ:PLTR | PLTR Price Prediction). That latest drop leaves Ondas stock down 35% year to date (YTD).

Meanwhile, AeroVironment (NASDAQ:AVAV) stock is at $123.74, down 3%, a smaller slide than Ondas stock. Additionally, Kratos Defense & Security Solutions (NASDAQ:KTOS) stock is at $39.73, down 2%, the smallest decline of the group. Both compete in the uncrewed and counter-drone markets where Ondas also sells.

The Defiance Drone and Modern Warfare ETF (NYSEARCA:JEDI) is down 5%, while the S&P 500 tracking SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down 1%. As of June 30, Ondas ranked among the ETF’s larger disclosed holdings at 6.7% of net assets.

Regna AI Launch Fails to Lift Ondas

On October 12, Ondas announced Regna AI, a venture with Palantir. The venture will develop sovereign AI, systems a national government controls and runs on its own infrastructure, for defense operations. It’s intended to connect that software to the drones and autonomous systems Ondas builds.

The company disclosed no terms, financial commitments or revenue expectations. Since then, Ondas shares have fallen, suggesting the missing details outweigh the strategic logic of pairing with Palantir.

Why Software Moves Ondas More Than Its Rivals

Ondas built its business selling drones and private wireless networks to defense and public-safety customers. Its ties to Palantir precede Regna AI. The two co-developed the SkyWeaver platform, which applies agentic AI at the edge for intelligence, surveillance and reconnaissance (ISR). Five acquisitions in Q1 2026, including Rotron Aerospace, Mistral and World View, extended the portfolio into loitering munitions and stratospheric surveillance.

Next to its peers, Ondas is small, so a software venture would move its revenue mix more. The company targets full-year 2026 revenue of at least $390 million and reported a pro forma backlog of $457 million. A funded Regna AI contract could change that mix quickly; an open-ended framework leaves the outlook resting on hardware.

AeroVironment and Kratos sell uncrewed aircraft and defense systems to government buyers on established programs. Switchblade, Puma and the LOCUST laser weapon anchor AeroVironment’s lineup, and its funded backlog reached a record $1.5 billion last quarter. Kratos builds the Valkyrie combat drone and lifted its 2026 revenue guidance to $1.75 billion to $1.81 billion.

Year to date, AeroVironment stock is down 49% and Kratos stock has declined 48%. Both drops are larger than the 35% Ondas stock has lost.

Regna AI Needs a Funded Contract

It remains unclear whether Regna AI produces a funded contract or stays a framework. Ondas points to a two-year pipeline of $4.3 billion across more than 45 program submissions. It has also guided to adjusted profitability by Q1 2028, so any new software effort competes for resources inside a business still working toward breakeven.

A disclosure naming a government customer, contract value or delivery schedule would give Ondas shares a concrete figure to price, but until Ondas and Palantir publish terms, Regna AI remains a headline rather than a revenue line. That uncertainty is worth noting. Investors holding Ondas shares alongside AeroVironment or Kratos may want to size their positions with it in mind, since Ondas has moved more sharply than its larger peers on news today. Into the close, watch for whether the JEDI ETF and the broader drone group steady or extend the slide.

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