2 Defense Stocks to Watch Now in 2026
2 Defense Stocks to Watch Now in 2026
What if the most interesting stock stories investors are watching right now aren’t coming from mega-cap tech but from advanced batteries, aerospace, defense, and space infrastructure?
While some investors are busy debating the next AI winner, a few under-the-radar companies are quietly building technology that could matter a lot over the next decade.
Today, we’re looking at two stocks to watch. These are companies working on real-world engineering problems. One of the stocks is pushing the limits of battery energy density for drones, robotics, and next-gen devices
The other is building space and defense infrastructure, from lunar power systems to missile defense programs. This is a fundamentals-first breakdown. We’re going line by line through revenue, margins, losses, and cash and translating what the numbers actually mean in plain English.
This is Just my personal analysis.
- Amprius Technologies (AMPX)
Amprius Technologies was founded in 2008 and is based in Fremont, California. Unlike many battery startups that are still stuck in the lab phase, Amprius operates Active R&D facilities, A pilot manufacturing line and In-house silicon anode development
Their key differentiator is silicon-anode lithium-ion batteries. Traditional lithium-ion batteries use graphite anodes. Silicon, at least in theory, can hold significantly more energy but it’s historically been difficult to commercialize due to expansion and durability issues.
Amprius claims it has solved enough of those challenges to begin real commercial shipments. That’s an important shift from promising tech to shipping product.
Since early 2023, Amprius reports Relationships with hundreds of companies, Shipments to 444 total end customers and 159 customers served in Q3 alone.
That matters a lot because it suggests demand is not tied to a single headline contract. Instead, adoption appears spread across Drones and UAS platforms, Robotics, Advanced electronics and Defense and aerospace use cases.
A diversified customer base can reduce concentration risk especially for an emerging manufacturer.
Q3 quarterly revenue came in at $21.4 million which represents +42% quarter over quarter, +173% year over year
Up from $7.9 million in the same quarter last year.
That’s not slow incremental growth, that’s acceleration. When you see this kind of ramp, it could signals that Production is scaling, Repeat orders or Product-market fit improving.
But rapid growth alone isn’t enough. We also need to see margin progress.
SiCore Batteries: Second-Generation Products Driving Sales
Management pointed to strong demand for its second-generation SiCore batteries.
Shipments of these batteries increased more than fourfold versus the prior year quarter.
Second-generation products typically bring better performance, better yields or more predictable manufacturing economics.
This is often the stage where advanced hardware companies move from proof-of-concept to repeatable commercialization.
Cost of goods sold reached $18.1 million for the quarter. Importantly, costs did not rise as fast as revenue.
Drivers included improved product mix, higher production volumes and better operating leverage.
Gross margin improved to 15%, up from 9% in the previous quarter, a 600 basis point jump.
For a hardware and manufacturing-heavy business, margin expansion is one of the clearest signs that scaling is beginning to work.
Losses Are Narrowing, that’s Not Easy During High Growth.
R&D spending increased to $2.5 million, up from $1.8 million last year. That’s expected, battery innovation is capital intensive.
More notable: operating loss improved.
Operating loss: $4.7 million
Down from $6.8 million the prior quarter
Net loss came in at $3.9 million or $0.03 per share
Versus $10.9 million and $0.10 per share a year ago
Growing quickly while reducing losses is difficult for any early-stage manufacturer. This trend is worth monitoring to see if it continues.
Cash at the beginning of the period stood at $55.6 million, with an additional $28.7 million from financing activities, largely equity-based.
Adjusted EBITDA improved to negative $1.4 million from negative $3.8 million.
The company also completed and closed its at-the-market equity program, which reduces uncertainty around near-term share issuance, though dilution risk is always something investors should keep an eye on with early-stage growth companies.
Recent developments include CES Innovation Award recognition, Expanded Korea Battery Alliance participation
A reported $35 million repeat purchase order from a UAS manufacturer
Selection for Amazon’s Devices Climate Tech Accelerator.
Ongoing drone battery shipments from its U.S. pilot line.
Repeat orders and ecosystem partnerships often carry more weight than first-time pilot deals.
2. Redwire Corporation (RDW)
Redwire operates in a completely different arena space systems, defense tech, and orbital infrastructure.
The company works across low Earth orbit systems, Lunar mission components, Missile defense programs and Microgravity research platforms.
This is largely contract-driven business, often tied to government and agency budgets rather than consumer demand cycles.
Recent quarterly revenue reached $103.4 million, up from $68.6 million a year earlier, roughly 50% year-over-year growth.
Growth at this scale typically reflects, New contract wins, Program expansion and Successful execution milestones.
Top-line momentum is clearly present. Profitability, however, is more uneven.
Gross profit increased to $16.8 million from $12.0 million.
However, margin pressure came from Estimated-at-completion (EAC) adjustments.
Roughly $8.3 million in negative impact tied to contract estimate revisions.
This is common in long-term aerospace and defense projects, where cost estimates can shift but it can create quarterly volatility.
R&D expense rose to $7.7 million, up from $1.9 million last year.
That’s a major increase and suggests Redwire is investing heavily in next-generation platforms, expanded technical capabilities and Future mission readiness.
Higher R&D can weigh on short-term earnings but may support longer-term competitiveness, assuming projects convert into revenue.
Net loss totaled $41.2 million, compared to $21.0 million last year.
Loss per share measured $0.29, versus $0.37 previously showing per-share improvement despite a larger total loss figure.
Still, losses remain significant, and execution risk is real in this type of project-based business.
Recent metrics shows that Adjusted EBITDA was negative $2.6 million.
Operating cash flow was negative $20.3 million.
Free cash flow was negative $27.8 million.
Growth is consuming cash not unusual in scaling aerospace and defense contractors but worth watching closely.
Liquidity improved to $89.3 million, up from $61.1 million last year, providing additional operational runway.
Redwire Corp was selected under a $151 billion Missile Defense Agency SHIELD IDIQ program vehicle, deployment of high-power roll-out solar arrays for lunar gateway projects, A $44 million DARPA contract and Payload integration work for European missions.
These programs place Redwire inside long-duration government and space infrastructure budgets which can provide multi-year visibility when execution goes well.
If you’re scanning the market beyond crowded mega-cap trades, these two companies sit in sectors with strong long-term demand drivers but also real execution risk.
Neither story is simple. Neither is risk-free. But both are operating where technology, defense, and infrastructure spending intersect and that’s often where some of the most interesting long-term market narratives develop.
Disclaimer
This article is for educational and informational purposes only. It is not financial advice and is not a recommendation to buy or sell any security. Always do your own research and consider your financial situation and risk tolerance before making investment decisions.
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