Ondas Retreats 9% Despite Attack Drone Purchase Order Ahead of Earnings; Red Cat Declines 9%, AeroVironment Falls 4%

Ondas Holdings (NASDAQ:ONDS) is sliding with the rest of the drone group despite a new attack drone order. In afternoon trading, Ondas stock trades at $5.46, down 9%. That drop reverses part of a 12% gain in the prior session, when the company’s shares closed at $5.97.

Selling is spreading across drone and defense-tech names, which points to a sector-wide pullback in high-beta stocks that’s catching Ondas along with its peers. The company is also heading into its upcoming Q3 2026 earnings report, and traders often trim speculative positions before a report. Ondas stock remains down sharply year to date despite the prior session’s rally.

Ondas Adds an Attack Drone Order Ahead of Earnings

Ondas announced that it received a purchase order for a next-generation tactical attack drone. A planned acquisition could help the company produce thousands of attack drones. Shareholders appear to be locking in the prior session’s gains and selling across the drone group, which likely explains much of the decline. A hotter-than-expected October consumer price index (CPI) reading also lifted expectations for a Federal Reserve rate hike, weighing on speculative growth stocks such as Ondas.

The order lands on top of a strong Q1 2026, when Ondas reported revenue of $50.12 million, a 1,079.8% increase year over year. Net income at Ondas reached $361.25 million, but that figure leaned heavily on a $389.55 million non-cash gain on warrant liabilities. On an operating basis, the company posted an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $10.88 million. Management raised its full-year 2026 revenue target to at least $390 million and put its pro forma backlog at $457 million, as the company disclosed on May 14.

Red Cat Matches Ondas’ Slide as AeroVironment Falls Less

Shares of Red Cat Holdings (NASDAQ:RCAT) are moving in step with Ondas. Red Cat stock is at $4.11, down 9%. The smaller drone maker reported Q2 FY2026 revenue of $20.19 million on August 6, missing expectations, though it maintained its fiscal 2026 revenue target of $150 million to $180 million.

Meanwhile, AeroVironment (NASDAQ:AVAV | AVAV Price Prediction) is falling less sharply than the two smaller names. AeroVironment stock is at $121.82, down 4%. The company’s shares rallied on November 9 on a newly announced deal. With a record funded backlog of $1.5 billion as of its Q1 FY2027 report on September 9, the company carries a large base of contracted work.

Kratos Defense (NASDAQ:KTOS) offers another defense reference point. Kratos posted its Q3 2026 results on November 5, a reminder that the group extends beyond small-cap drone makers.

How Ondas’ Business Differs From Red Cat and AeroVironment

Ondas has built a system-of-systems portfolio largely through acquisitions, combining counter-drone tools such as Sentrycs and Iron Drone with Mistral and Rotron loitering munitions, World View stratospheric surveillance balloons and 4M Defense ground vehicles. That mix gives the company exposure across air, ground and stratospheric missions, but it also leaves Ondas integrating many recently acquired businesses at once.

Red Cat runs a narrower portfolio centered on the Black Widow small drone, with Teal Drones and Blue Ops maritime vessels extending its reach. AeroVironment, by contrast, is an established defense supplier. Its Switchblade loitering munitions, Puma reconnaissance drones and LOCUST laser weapon sit inside two reporting divisions built over years of program wins.

What Ondas Needs to Prove in Its Upcoming Report

Investors are watching whether Ondas’s upcoming earnings show the second-half revenue ramp that management has tied to its full-year target. The bulls point to the growing backlog, the new attack drone order and the chance that the planned acquisition lifts production capacity. Skeptics counter that adjusted losses remain heavy and that a rising-rate environment tends to weigh on unprofitable growth stocks.

Readers can watch for any detail on the order’s value and delivery timing. It’s also wise to look for any progress on the planned acquisition, as the outlook for Ondas’ attack drone ramp could remain uncertain until more details emerge.

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