Saturday, July 18, 2026

Physical Ai is the next wave. Five investments we own or are buying this summer.

The Next Industrial Revolution - Physical Ai!

A Five-Position Portfolio Designed for Long-Term Growth

Executive Summary

Artificial Intelligence is entering a new phase.

The first wave of AI focused on software—large language models, chatbots, and cloud computing. The second wave centered on building the infrastructure that powers AI, benefiting companies such as NVIDIA, Broadcom, Micron, and TSMC.

Today, a third wave is emerging: Physical AI.

Physical AI refers to intelligent machines that perceive, think, and act in the real world. It includes industrial robots, autonomous drones, self-operating vehicles, robotic warehouses, underwater autonomous systems, and AI-powered factories.

Jensen Huang, CEO of NVIDIA, has repeatedly identified Physical AI as one of the next major growth markets in technology. As labour shortages, geopolitical tensions, industrial reshoring, and automation accelerate worldwide, demand for intelligent machines is expected to expand dramatically over the coming decade.

For Canadian retail investors, the challenge is deciding how to invest in this trend without becoming overly concentrated in a handful of expensive technology stocks.

This report presents a diversified five-position portfolio designed specifically for a Canadian investor seeking long-term capital appreciation while maintaining exposure to multiple segments of the Physical AI ecosystem.

Why Physical AI Matters

Unlike traditional software AI, Physical AI requires an entire ecosystem working together.

Every autonomous machine requires:

Artificial intelligence processors
Advanced robotics
Secure communications
Industrial networking
Sensors
Navigation systems
Software
Mission-critical infrastructure

Rather than betting on one robot manufacturer or one AI company, investors can build exposure across the technologies that enable the entire industry.

The Portfolio

Investment	Suggested Weight	Role
Qualcomm (NASDAQ/TSX: QCOM)	30%	AI processing and Edge AI
Kraken Robotics (TSX: PNG)	25%	Autonomous marine systems
Global X Robotics & Artificial Intelligence Index ETF (TSX: RBOT)	20%	Diversified global robotics
Volatus Aerospace (TSX: FLT)	15%	Autonomous aerial systems
Nokia (NYSE: NOK)	10%	Industrial communications and networking

This portfolio provides exposure to five complementary components of the Physical AI revolution.

Qualcomm – The Brain (30%)

Every intelligent machine requires computing power.

Qualcomm has evolved far beyond smartphone processors and is becoming one of the world's leaders in Edge AI—artificial intelligence that operates directly inside machines rather than relying on cloud-based data centres.

Its technologies increasingly power:

Autonomous vehicles
Industrial robots
Smart factories
AI-enabled PCs
IoT devices
Commercial drones
Advanced automation systems

Edge AI reduces latency, improves security, lowers energy consumption, and enables machines to make decisions in real time.

Why Canadian investors should like it

Qualcomm combines strong cash flow, consistent profitability, a solid dividend, and exposure to multiple AI growth markets. It provides a stable foundation while still participating in one of the fastest-growing technology trends.

Kraken Robotics – The Oceans (25%)

Canada has quietly produced one of the world's most innovative marine technology companies.

Kraken Robotics develops advanced:

Autonomous underwater vehicles
Synthetic aperture sonar
Underwater imaging
Naval intelligence systems
Offshore inspection technologies

Its recent acquisition of Sonardyne significantly expanded its global footprint, technology portfolio, and customer relationships.

As NATO nations modernize their naval capabilities and offshore energy infrastructure expands, demand for autonomous underwater systems is expected to increase.

Why Canadian investors should like it

Kraken represents a uniquely Canadian opportunity to participate in a global defence and marine robotics market with long-term structural tailwinds.

RBOT ETF – The Body (20%)

The RBOT ETF provides diversified exposure to many of the world's leading automation companies.

The ETF includes businesses involved in:

Industrial robotics
Warehouse automation
Factory automation
Medical robotics
Motion control
Machine vision

For Canadian investors, RBOT offers two important advantages:

It trades on the TSX in Canadian dollars.
It provides broad diversification across the robotics industry.

Instead of trying to predict which robot manufacturer will ultimately dominate, investors gain exposure to the entire sector.

Volatus Aerospace – The Sky (15%)

Canada is becoming an increasingly important player in autonomous aviation.

Volatus Aerospace develops and operates advanced drone technologies serving both commercial and government markets.

Its opportunities include:

Defence and military surveillance
Border security
Infrastructure inspection
Utility monitoring
Emergency response
Cargo delivery
Arctic operations

The company's expanding manufacturing capabilities and relationships with government agencies position it to benefit from increasing investment in autonomous aerial systems.

Why Canadian investors should like it

Volatus offers exposure to one of the highest-growth segments of Physical AI while remaining a Canadian-listed company with significant long-term upside potential.

Nokia – The Nervous System (10%)

Autonomous machines cannot function without reliable communications.

Nokia has transformed itself into an industrial networking company focused on:

Private 5G networks
Enterprise wireless
Edge networking
Industrial automation
Quantum-safe cybersecurity
Future 6G technologies

Factories, ports, airports, mines, and utilities increasingly require secure, ultra-low-latency communications to support fleets of autonomous machines.

Why Canadian investors should like it

Nokia provides exposure to a critical enabling technology that is often overlooked by investors focused solely on robotics or semiconductors.

Why These Five Work Together

Many technology portfolios suffer from significant overlap.

This portfolio intentionally avoids that problem.

Each investment occupies a unique position within the Physical AI ecosystem.

Function	Investment
Intelligence	Qualcomm
Robotics	RBOT
Marine Autonomy	Kraken Robotics
Aerial Autonomy	Volatus Aerospace
Communications	Nokia

Rather than owning five companies competing against each other, investors own five companies enabling one another.

Why This Portfolio Is Well Suited to Canadian Retail Investors

Canadian investors often face unique challenges:

Limited access to many emerging technology companies.
Currency conversion costs when investing in U.S. markets.
The need to balance growth with diversification.
Tax efficiency within registered accounts such as TFSAs and RRSPs.

This portfolio addresses those issues by combining:

Two Canadian-listed growth companies.
One Canadian-listed ETF.
Two established global technology leaders.

It provides exposure to both Canadian innovation and international market leadership while remaining simple enough for most self-directed investors to manage.

Potential Growth Catalysts (2026–2030)

Several long-term trends could support this portfolio over the next five years:

Widespread adoption of AI-powered industrial robots.
Expansion of autonomous drones in commercial and defence applications.
Increased NATO defence spending.
Growth in autonomous underwater surveillance.
Accelerating adoption of private 5G networks.
Expansion of Edge AI into manufacturing, healthcare, logistics, and transportation.
Labour shortages driving automation investment.
Industrial reshoring across North America and Europe.

These trends are complementary rather than independent, creating multiple avenues for growth.

Principal Risks

No investment strategy is without risk.

Investors should consider:

Market volatility affecting technology stocks.
Slower-than-expected adoption of robotics.
Execution risk for smaller companies such as Kraken Robotics and Volatus Aerospace.
Government procurement delays in defence markets.
Currency fluctuations for Canadian investors holding U.S.-listed securities.

Diversification across five complementary businesses helps reduce dependence on any one company or technology.

Ed Note: We now own two of these stocks and will be adding the ETF and others over the summer!

Final Thoughts

Many investors view Artificial Intelligence solely through the lens of software.

History suggests that the companies enabling technological revolutions often become just as valuable as those creating the applications.

Physical AI represents the convergence of robotics, autonomous systems, advanced communications, and intelligent computing.

This portfolio is designed to capture that convergence.

For Canadian retail investors seeking long-term growth, it offers exposure to five distinct yet complementary businesses that participate in one of the most significant technological transformations of the coming decade.

No one can predict which individual robot, drone, or autonomous platform will ultimately dominate the market. However, by investing across the foundational technologies that make Physical AI possible, investors can participate in the industry's growth while reducing the risk associated with betting on a single winner.

As always, investors should ensure that any portfolio aligns with their own financial objectives, risk tolerance, and investment time horizon. For those with a multi-year outlook, Physical AI may prove to be one of the defining investment opportunities of the 2020s.

Friday, July 17, 2026

IBM had a brutal week in markets dropping 25% in one week. Q: is this a good entry point?

The selloff in IBM this week was extraordinary.

Peak-to-trough, IBM lost roughly 25% of its market value in just a few trading sessions, erasing approximately US$67 billion in market capitalization. It was one of the largest one-day declines in the company's modern history.

The question for investors is whether this is:

a temporary overreaction, or
evidence that IBM's long-term investment thesis has changed.

My assessment: the long-term thesis is bruised, not broken

I think the market has correctly repriced IBM's near-term earnings power, but it has not destroyed IBM's strategic assets.

Let's separate IBM into its major businesses.

Business	Outlook
Hybrid Cloud (Red Hat)	Still very strong
Consulting	Cyclical, currently under pressure
Software (watsonx, automation, security)	Good long-term prospects but execution disappointed
Mainframe/Infrastructure	Mature business, more cyclical than investors expected
Quantum Computing	Still among the world's leaders

Quantum changes the equation

This is the part many investors ignore.

IBM is not merely experimenting with quantum computing.

It possesses:

arguably the world's largest quantum software ecosystem (Qiskit)
thousands of researchers
extensive government relationships
years of error-correction research
the most mature enterprise quantum platform
an enormous installed enterprise customer base

Unlike many quantum companies, IBM already has:

revenue
cash flow
global customers
decades of engineering talent

No one else combines all of those advantages.

The bear case

The market is worried that AI is changing enterprise spending faster than IBM can adapt.

Several concerns have emerged:

software sales slowed
consulting bookings weakened
some enterprise AI spending appears to be flowing toward hyperscalers and newer AI-native vendors
management admitted execution issues, leading to a rare pre-earnings warning.

Those are legitimate concerns.

The bull case

If I look out 5-10 years, IBM still owns several extremely valuable assets:

1. Quantum leadership

IBM remains one of perhaps three companies most likely to build commercially useful fault-tolerant quantum computers.

I'd currently rank them approximately:

IBM
Alphabet (Google Quantum AI)
IonQ

Others may eventually catch up, but IBM remains in the first tier.

2. AI plus quantum

IBM doesn't need to "win AI."

It needs AI to become another enterprise workload running on IBM infrastructure.

Its strategy is:

hybrid cloud
enterprise AI
quantum
consulting

Those reinforce one another.

3. Red Hat

I continue to believe Red Hat was one of the best acquisitions made by any large technology company during the last decade.

It gives IBM credibility inside virtually every Fortune 500 IT department.

Is this a good entry point?

I would answer:

Yes—but not all at once and tread softly.

This is exactly the type of situation where institutional investors typically scale into positions rather than trying to call the bottom.

If I wanted a full position today, I'd consider something like:

Buy 40% now
Buy another 30% if the stock falls another 8–10%
Buy the final 30% after the next earnings report if management demonstrates stabilization.

That approach accepts that the market may remain volatile while reducing the risk of buying everything before further negative news.

Would I buy IBM over the next year?

Compared with many large-cap technology companies:

Company	12-month attractiveness
NVIDIA	9.5/10
Qualcomm	9.2/10
Marvell Technology	9.0/10
IBM	8.8/10 after this selloff
Microsoft	8.7/10

IBM has become more attractive because its valuation has compressed substantially, whereas much of the AI sector still trades at demanding multiples.

My conclusion

If I knew nothing about an investor, I'd say IBM is now a reasonable long-term accumulation candidate, particularly for those seeking a combination of cash flow, AI exposure, hybrid cloud, and quantum computing.

A small starter position might be in order.

Discl: at this time we don't own stock in IBM

Wednesday, July 15, 2026

Volatus Aerospace gets a visit from some very important people in the Defense Industry to view their new facility

Today, the Canadian Minister of National Defense and LGen Darcy Molstad, CD, ICD.D, Commander Canadian Joint Forces Command, of the Canadian Armed Forces, along with their teams, visited FLT's new 200,000-square-foot Innovation Centre and Drone Manufacturing Hub at Mirabel Airport in Montreal.

I think this is one of the most significant developments for Volatus since it became a public company—not because a minister visited a building, but because of what the visit represents in the context of Canada's evolving defence strategy.

There is an important distinction:

The government did not announce a procurement contract for Volatus.

However, the Minister of National Defense, the Chief of the Canadian Armed Forces, and senior defence officials chose to visit the Mirabel Innovation Centre at the same time the federal government announced the Uncrewed Systems Defence Innovation Secure Hub (UxS DISH) in Mirabel. The hub is intended to accelerate the development, testing, validation, and deployment of Canadian uncrewed and autonomous systems for defence.

That makes the visit strategically meaningful,

even though it is not, by itself, a revenue announcement.

1. It Validates Volatus as Part of Canada's Drone Ecosystem

Governments are extremely selective about where they conduct high-profile defence visits.

When both the Minister of National Defense "and" the Chief of the Defense Staff tour a company's facility, they are effectively acknowledging that the company is a relevant participant in Canada's defence industrial base.

That alone does not guarantee contracts.

But it does indicate Volatus is now part of the national conversation.

2. Mirabel Is Becoming a Defence Cluster

The federal announcement wasn't simply about Volatus.

It was about creating Canada's:

Uncrewed Systems Defense Innovation Secure Hub

focused on:

autonomous systems
counter-drone technology
human-machine teaming
sensor integration
contested-environment operations

Those priorities mirror many of the technologies Volatus has been investing in.

That significantly increases the strategic importance of Mirabel.

3. The Facility Looks Increasingly Well Timed

When Volatus announced its manufacturing and innovation centre months ago, some investors questioned whether management was building ahead of demand.

Now we have:

Defense Innovation Secure Hub
sovereign drone strategy
Defense Industrial Strategy
senior military leadership visiting the facility
Canadian focus on autonomous systems

Viewed together, the facility appears increasingly aligned with federal priorities rather than simply representing excess capacity.

4. This Could Improve Procurement Opportunities

Large government contracts rarely begin with a purchase order.

They usually progress through stages:

capability awareness
technical evaluation
demonstrations
testing
pilot programs
procurement

Senior military leadership touring the facility fits naturally into the early part of that process.

It is not evidence that a contract is imminent, but it is consistent with deeper engagement.

5. The Timing Is Especially Interesting

Within a relatively short period Volatus has now:

graduated to the senior TSX
completed a C$34.5 million bought deal
strengthened its balance sheet
achieved full ownership of Synergy Aviation
expanded manufacturing
launched SKYDRA
advanced autonomous VTOL cargo systems
secured NATO-related work
hosted Canada's senior defence leadership

Individually, each item is meaningful.

Collectively, they suggest...

Management has been preparing for a larger opportunity rather than simply reacting to events.

6. Why The Commander Canadian Joint Forces Command, matters!

The Minister's visit is politically important.

The General's visit is operationally important.

The CAF—not politicians—ultimately determines what capabilities are needed, evaluates technologies, and informs procurement priorities.

When the military's top leadership spends time examining a company's capabilities, it suggests genuine interest in understanding those technologies,

although it should not be interpreted as an endorsement or purchasing commitment.

7. The Bigger Picture

I believe many investors are still looking at Volatus through the lens of:

"commercial drone company."

Canada increasingly appears to be looking at autonomous systems through the lens of:

"national capability."

That distinction matters.

Modern defence increasingly depends on:

autonomous logistics
ISR
counter-drone systems
Arctic surveillance
AI-enabled operations
sovereign manufacturing

Volatus has been investing across many of those areas.

My Assessment

If I had to rank the significance of this event:

For next quarter's earnings: 3/10

A facility visit does not directly create revenue.

For the next 3–5 years: 9/10

The visit reinforces that Volatus is increasingly operating inside Canada's sovereign defence ecosystem at a time when Ottawa is explicitly prioritizing Canadian-developed uncrewed and autonomous systems.

For your long-term thesis, I think this is the key point:

The value is not that ministers toured a factory.

The value is that the factory, the technologies Volatus has been developing, the recent financing, and Canada's defence strategy are all beginning to point in the same direction.

The next major milestone to watch is not another visit—it is whether this strategic alignment translates into material procurement contracts, funded pilot programs, or long-term framework agreements with the Canadian government or NATO partners.

Those events would materially change the company's long-term financial outlook.

Full Disclosure:

We are long and accumulating FLT stock!

Don't ignore what is happening as this Canadian microcap gets closer to center stage!

Tuesday, July 7, 2026

Helping to Build North America's Rare Earth Supply Chain - Ucore Rare Metals!

Ucore Rare Metals (TSXV: UCU | OTCQX: UURAF)

Building North America's Rare Earth Supply Chain

Investment Report – July 2026

Executive Summary

Rare earth elements have quietly become one of the world's most strategically important resources. They are essential to artificial intelligence infrastructure, humanoid robotics, electric vehicles, advanced aerospace, renewable energy, semiconductors, and modern military systems. Yet despite their importance, China still dominates the global supply chain—particularly the processing and separation of these critical materials.

This is where Ucore Rare Metals enters the story.

Unlike many junior mining companies, Ucore is not attempting to become simply another rare earth miner. Instead, it is building what could become one of North America's first integrated rare earth processing companies through its proprietary RapidSX™ separation technology, its Commercialization and Demonstration Facility in Kingston, Ontario, the planned Louisiana Strategic Metals Complex, and, ultimately, its strategically valuable Bokan-Dotson Ridge heavy rare earth deposit in Alaska.

Following this week's announcement that Ucore successfully produced 99.9% dysprosium oxide for customer qualification programs in Japan, South Korea, and the United States, the company appears to have crossed another important milestone in its transition from technology developer to emerging commercial producer.

For long-term investors, Ucore is becoming a company worth serious attention.

The Rare Earth Opportunity

Rare earth elements are the invisible building blocks of the modern economy.

Every permanent magnet used in:

Artificial Intelligence
Humanoid Robotics
Electric Vehicles
Wind Turbines
Precision Manufacturing
Drones
Missile Guidance Systems
Naval Propulsion
Aerospace

depends upon rare earth elements.

Most investors recognize Neodymium (Nd) and Praseodymium (Pr), but some of the world's most strategically valuable materials are actually the heavy rare earths such as Dysprosium (Dy) and Terbium (Tb).

Without them, many advanced electric motors cannot operate efficiently under extreme temperatures.

Unfortunately, China currently controls most of the world's heavy rare earth processing capacity.

Western governments are determined to change that.

Ucore's Three-Pillar Strategy

Unlike most companies in the sector, Ucore is building an integrated business model.

1. RapidSX™ Technology

RapidSX is Ucore's proprietary rare earth separation technology.

Traditional solvent extraction facilities often require enormous plants containing hundreds or even thousands of mixer-settlers and long processing times.

RapidSX is designed to achieve the same objective using a more compact, modular, and potentially faster system.

If commercial performance matches demonstration results, RapidSX could become one of the most important new technologies developed in the Western rare earth industry.

2. Louisiana Strategic Metals Complex

Technology alone creates little shareholder value.

Commercial production creates value.

The Louisiana Strategic Metals Complex is intended to become Ucore's first commercial processing facility.

Rather than depending upon China for separated rare earth oxides, manufacturers could obtain materials processed within North America.

This facility represents the bridge between demonstration technology and commercial cash flow.

3. Bokan-Dotson Ridge – Alaska

Perhaps the least appreciated part of Ucore's story is its ownership of the Bokan-Dotson Ridge rare earth project in southeast Alaska.

Unlike many deposits dominated by light rare earths, Bokan contains an unusually attractive proportion of heavy rare earth elements, including Dysprosium and Terbium—two of the highest-value materials required for advanced defense systems, aerospace applications, robotics, and high-performance electric motors.

Management has wisely chosen not to rush this project into production.

Instead, Ucore is first building the processing capability.

Once Louisiana is operating successfully, Bokan has the potential to become a long-term domestic source of feedstock, allowing Ucore to control a much larger portion of the rare earth value chain.

In effect, Ucore is building the processing plant before opening its own mine.

That strategy reduces dependence on third-party processors and positions the company to become a vertically integrated North American supplier.

Recent Progress

Over the past several months, Ucore has delivered a series of encouraging milestones.

The company first produced high-purity NdPr oxide and shipped qualification samples to major magnet manufacturers.

This week, management announced successful production of 99.9% Dysprosium Oxide at its Kingston Commercialization and Demonstration Facility.

These samples are now undergoing qualification by potential customers in:

Japan
South Korea
United States

This step is far more important than many investors realize.

Large industrial customers do not simply purchase rare earth materials based upon laboratory results.

They require months of testing to verify purity, consistency, manufacturing compatibility, and long-term reliability before signing supply agreements.

Every successful qualification reduces commercial risk.

Strategic Relationships

Ucore has steadily assembled an impressive network of government and industry relationships.

Among the most significant is its cooperation framework with Sumitomo Corporation of Americas, one of Japan's largest trading organizations.

Japan has spent years attempting to diversify its rare earth supply chain away from China.

Ucore fits naturally into that strategy.

The company has also benefited from support through various North American critical minerals initiatives involving Canadian and U.S. governments, reflecting the increasing strategic importance of secure domestic rare earth processing.

Financial Position

Ucore remains a development-stage company.

Revenue is still limited, and investors should expect continued investment in commercialization.

While additional capital may be required as Louisiana advances toward full commercial operation, recent technical achievements have significantly strengthened the company's credibility with both government agencies and strategic industry partners.

As with most emerging technology companies, investors should expect above-average share price volatility until recurring commercial revenues are established.

Investment Strengths

Several characteristics distinguish Ucore from many junior mining companies.

✓ Proprietary processing technology

✓ Exposure to high-value heavy rare earths

✓ Commercial demonstration facility already operating

✓ Louisiana commercial processing strategy

✓ Strategic Alaska resource

✓ Strong geopolitical positioning

✓ Increasing customer qualification activity

✓ Significant government alignment

✓ Large long-term market opportunity

Investment Risks

Despite considerable progress, investors should recognize several important risks.

Commercial facilities remain expensive to construct.

Customer qualification programs can require significant time before purchase contracts are signed.

Additional financing may be required during commercialization.

Finally, although RapidSX has now demonstrated encouraging technical results, scaling laboratory success into large commercial operations remains management's most important challenge.

Outlook

Over the next two years investors should monitor several developments closely.

Customer qualification results
Initial commercial supply agreements
Construction progress in Louisiana
Additional government funding
Expansion of the Sumitomo relationship
Potential future Strategic Metals Complex announcements
Continued advancement of the Bokan Alaska project

Each successful milestone further reduces execution risk and increases the company's strategic value.

Investment Opinion

Only a handful of companies outside China are attempting to build a complete rare earth processing business.

Even fewer possess proprietary separation technology, an operating commercialization facility, a planned commercial processing complex, and ownership of one of North America's most attractive heavy rare earth deposits.

That combination makes Ucore unusual.

If management successfully executes its commercialization strategy, the company could evolve from a speculative junior developer into one of North America's most strategically important critical minerals companies.

The road ahead will almost certainly remain volatile, and additional financing and execution challenges should be expected. However, the long-term fundamentals supporting the business have arguably never been stronger.

For patient investors with a three- to five-year investment horizon, Ucore Rare Metals remains one of the more compelling speculative opportunities in the North American critical minerals sector.

Overall Rating: 9.4 / 10

Risk: High (development-stage company)

Potential Reward: Exceptional, if RapidSX commercialization and customer qualifications translate into sustained commercial operations.

Ed Note:

We are long Ucore Rare Metals (UCU on TSX)

Friday, July 3, 2026

Don't ignore what is happening as this Canadian microcap gets closer to center stage!

Volatus Aerospace Inc. (TSX: FLT)

A Small cap company with BIG PLANS!

From Drone Services to critical Sovereign Defence Technology

July 2026

Executive Investment Thesis

Volatus Aerospace appears to be undergoing one of the most significant strategic transformations among Canadian small-cap aerospace companies.

Historically recognized as a commercial drone-services provider, the company is evolving into a vertically integrated developer and manufacturer of autonomous aerial systems, AI-enabled software, intelligence and surveillance platforms, military training, and sovereign Canadian defence technologies.

This transformation coincides with an unprecedented shift in global defence priorities.

Governments worldwide are investing billions of dollars into autonomous systems,

AI-enabled surveillance, electronic warfare, border security, and drone technologies. Canada has also committed to substantially increasing defence spending while emphasizing domestic industrial capability.

Volatus is positioning itself at the intersection of these trends.

For investors willing to tolerate the risks associated with an emerging defence technology company, Volatus offers the potential for significant long-term upside if management successfully executes its strategy.

Investment Highlights

✔ Canadian Sovereign Manufacturing

The opening of the company's 53,000-square-foot Mirabel Manufacturing and Systems Integration Centre represents a major milestone.

Unlike many drone companies that assemble imported products, Volatus now has the ability to manufacture and integrate autonomous aircraft and defence systems within Canada.

This capability could become increasingly valuable as governments seek secure domestic supply chains.

✔ Exposure to Multiple High-Growth Markets

Volatus participates in several industries expected to experience above-average growth throughout this decade.

These include:

Defence modernization
NATO procurement
AI-enabled autonomous systems
Intelligence, Surveillance & Reconnaissance (ISR)
Border security
Arctic surveillance
Counter-drone technologies
Critical infrastructure inspection
Industrial aerial intelligence

Few Canadian public companies offer meaningful exposure to all of these sectors.

✔ Proprietary Software Platform

The company is increasingly becoming a software business in addition to a hardware manufacturer.

Recent developments include:

V-Cortex™ autonomous flight operating system
SKYDRA™ counter-UAS software
AI-assisted mission management
Autonomous flight control technologies

If adopted at scale, software could become one of the company's highest-margin business segments.

Management Alignment

One of Volatus' greatest strengths is the alignment between management and shareholders.

Management and insiders collectively own approximately 20% of the company, providing meaningful financial alignment with outside investors.

Founder and Chief Executive Officer Glen Lynch has spent decades building businesses in aviation, aerospace technology, and unmanned aerial systems. He continues to own more than 10 million shares of Volatus.

That level of ownership is noteworthy.

Rather than reducing his position, Mr. Lynch remains one of the company's largest shareholders, meaning his financial interests rise and fall alongside those of other investors.

While insider ownership is never a guarantee of success, companies led by founders with substantial equity stakes often benefit from a stronger long-term focus on value creation.

Financial Snapshot

Although quarterly results remain influenced by the timing of government contracts, several positive trends are evident:

Revenue has expanded materially over the past two years.
Defence-related business has become a much larger contributor.
Gross margins have improved.
Cash resources have been strengthened following recent financing.
The company maintains a sizeable opportunity pipeline that could support future growth if converted into signed contracts.

The business remains in investment mode, so investors should expect earnings volatility while management scales manufacturing and software operations.

Strategic Contracts and Programs

Volatus has established or expanded participation in several significant initiatives:

• NATO-allied RPAS training programs

• ISR training systems

• U.S. Drone Dominance Program

• Canada–Ukraine defence technology collaboration

• AI-enabled autonomous systems development

These activities demonstrate increasing credibility with government and defence organizations.

Mirabel: A Strategic Asset

The Mirabel facility is more than a manufacturing building.

It places Volatus within one of North America's premier aerospace clusters alongside world-class manufacturers, suppliers, engineers, and defence contractors. (Bombardier etc)

Potential long-term benefits include:

Improved supply-chain access
Faster product development
Greater visibility with government customers
Opportunities for collaboration with larger aerospace firms
Increased attractiveness as a strategic partner

Why the Market May Be Underestimating Volatus

Many investors continue to value Volatus using traditional commercial drone-service comparisons.

That may no longer be appropriate.

Increasingly, the company resembles an emerging defence technology platform built around:

Manufacturing
Software
AI
ISR
Military training
Autonomous aircraft

Companies operating in these markets often receive materially higher valuations once recurring government contracts begin to accumulate.

Competitive Advantages

Volatus possesses several characteristics that distinguish it from many smaller drone companies:

✔ Canadian ownership

✔ Sovereign manufacturing capability

✔ AI software development

✔ BVLOS operational expertise

✔ Military advisory leadership

✔ Growing defence relationships

✔ Diversified commercial operations generating industry experience

Collectively, these capabilities create barriers to entry that are difficult and time-consuming to replicate.

Potential Strategic Interest

There is no public evidence that acquisition discussions are underway.

However, from a strategic perspective, Volatus possesses assets that could become attractive to larger aerospace and defence organizations if execution continues.

Potential future strategic partners or acquirers often discussed by investors include:

Bombardier
CAE
L3Harris Technologies
RTX
Saab
Leonardo
Thales
Kratos Defense
Anduril Industries

The principal attraction would likely be:

Canadian sovereign manufacturing
AI-enabled autonomy
Defence software
Operational expertise
Regulatory approvals
NATO relationships
Systems integration capability

Whether an acquisition ever occurs is impossible to predict, but the company's strategic profile appears considerably stronger than it was only a few years ago.

Key Risks

Investors should also recognize several important risks.

These include:

Delays in defence procurement
Manufacturing execution
Future capital requirements
Competition from much larger defence contractors
Technology evolution
Dependence on converting pipeline opportunities into signed contracts

Volatus should therefore be viewed as a higher-risk, higher-potential-return investment.

Five-Year Outlook

If management successfully executes its strategy, Volatus could reasonably evolve into:

A leading Canadian autonomous systems manufacturer
A significant supplier to Canadian defence programs
A recognized NATO technology partner
A recurring software provider
A larger participant in the North American defence ecosystem

Such an evolution would likely warrant a substantially different valuation framework than that applied to traditional drone-service companies.

Investment Conclusion

Volatus Aerospace is attempting something ambitious: transforming from a commercial drone operator into a vertically integrated Canadian defence technology company.

The pieces of that strategy are increasingly visible—sovereign manufacturing, proprietary AI software, autonomous systems, defence partnerships, military leadership, and expanding government engagement.

Equally important, management has demonstrated confidence in this vision through substantial insider ownership. With insiders controlling approximately one-fifth of the company and founder Glen Lynch continuing to hold more than 10 million shares after a career spanning decades in aerospace and aviation, leadership remains financially aligned with shareholders.

The road ahead will not be without challenges. Government procurement is often slow, manufacturing scale-up carries execution risk, and the company will need to continue proving that it can convert opportunities into recurring revenues.

Nevertheless, for patient investors who understand the risks of emerging defence technology companies, Volatus offers exposure to several of the strongest structural growth themes of the coming decade.

Should the company continue executing successfully, future investors may eventually view today's Volatus not as a drone-services company, but as one of Canada's ...

Most strategically important publicly traded autonomous aerospace and defence businesses.

Related articles:

Volatus Aerospace gets a visit from some very important people in the Defense Industry to view their new facility

Volatus Aerospace (FLT.t) is one of those hidden gems in the smallcap/microcap space. Here's why!

the NATO/Canada defense buildout is an opportunity for Canadian retail investors

A powerful setup for exponential growth from combining two of Canada's smallcap stocks (PNG and FLT)

The massive spending spree on Defense in Canada and NATO will catapult this small cap into the big leagues!

Saturday, June 27, 2026

A thoughtful Space infrastructure portfolio should include these three company's stock!

Business & Investment Report

The Space Infrastructure Portfolio

Why Rocket Lab, Redwire and MDA Space Could Become the "Nvidia, Broadcom and TSMC" of the Space Economy (2026–2031)

Executive Summary

After decades of being government-driven, the space industry is becoming a commercial infrastructure business. The long-term winners are increasingly likely to be the companies that supply the essential systems enabling launch, satellites, defense, communications, and Earth observation—rather than those pursuing isolated missions.

For a Canadian retail investor seeking high long-term growth, I believe the strongest three-company portfolio is:

Rank	Company	Role	Risk	5-Year Alpha Potential
1	Rocket Lab USA	Space infrastructure platform	Medium	★★★★★
2	Redwire Corporation	Space systems & defense technology	High	★★★★☆
3	MDA Space	Blue-chip Canadian space leader	Medium-Low	★★★★☆

Taken together, these companies provide exposure to nearly every major segment of the commercial space economy while avoiding concentration in a single launch provider or satellite operator.

Why the Space Economy May Be Entering Its Golden Age

Three secular trends are reinforcing one another:

NATO and allied defense spending is accelerating.
AI requires ever-larger constellations of satellites and Earth-observation data.
Governments increasingly rely on commercial providers rather than building everything internally.

Rather than betting on one rocket or one satellite constellation, this portfolio spans launch services, spacecraft manufacturing, robotics, space infrastructure, satellite components, and defense.

1. Rocket Lab — The Infrastructure Platform

Investment Thesis

If there is one company with the potential to become the "SpaceX of the public markets," it is Rocket Lab.

Unlike most launch companies, Rocket Lab has transformed itself into a vertically integrated space infrastructure company.

Today it manufactures:

Launch vehicles
Satellites
Spacecraft buses
Solar panels
Reaction wheels
Flight computers
Communications hardware
Space software
Space robotics (through acquisitions)

This diversification reduces dependence on launch revenue alone.

Financial Snapshot

Recent operating metrics include:

Q1 2026 revenue: approximately US$200 million
Gross margin above 38%
Backlog around US$2.2 billion
Over 70 contracted missions
Strong liquidity supporting expansion.

The backlog is especially important because it provides multi-year revenue visibility.

Major Customers

Rocket Lab's customer list includes:

NASA
U.S. Department of Defense
U.S. Space Force
Anduril Industries
Commercial satellite operators
Scientific institutions
International government agencies

Recent Contracts

Highlights include:

31 new Electron and HASTE launch contracts in Q1 2026.
Five dedicated Neutron launch agreements.
A record launch contract exceeding its previous US$190 million benchmark.
A US$30 million hypersonic testing contract with Anduril.
Participation in the U.S. Space Force's next-generation missile-tracking program.

Competitive Advantages

Rocket Lab is becoming:

Launch provider
Satellite manufacturer
Component supplier
Defense contractor
Space logistics company

Few public companies possess this breadth.

Five-Year Outlook (2031)

Assuming successful execution of the Neutron program, I believe Rocket Lab has the strongest opportunity in the public space sector.

Estimated annual revenue potential by 2031: US$3–5+ billion (scenario estimate, not company guidance).

2. Redwire — The Hidden Picks-and-Shovels Company

Investment Thesis

Where Rocket Lab builds the highway into space, Redwire builds much of the equipment that travels on it.

Its products include:

Solar arrays
Space robotics
Docking systems
Avionics
Space sensors
Autonomous drones
Defense technologies

Many of these systems are integrated into missions led by larger prime contractors.

Financial Snapshot

Recent performance includes:

Q1 2026 revenue of approximately US$97 million (up nearly 58% year over year).
2026 revenue guidance of US$450–500 million.
Record contract activity with a book-to-bill ratio above 1.5.

Major Customers

Redwire works with organizations including:

NASA
European Space Agency
U.S. Department of Defense
Commercial satellite companies
International defense customers

Recent Contract Wins

Notable developments include:

Multi-year Penguin Mk3 tactical UAS contract with a NATO country.
Continued expansion following the Edge Autonomy acquisition.
Growing defense technology pipeline.

Competitive Strengths

Unlike launch providers, Redwire earns revenue from:

Satellite hardware
Robotics
Solar systems
Manufacturing technologies

That diversity reduces dependence on launch cadence.

Five-Year Outlook

Defense spending alone could materially expand Redwire's addressable market.

Estimated annual revenue potential by 2031: US$1.5–2.5 billion (scenario estimate).

3. MDA Space — Canada's National Champion

Investment Thesis

MDA Space is different.

Instead of being an emerging growth story, it is already an established global leader with more than five decades of flight heritage.

Its capabilities include:

Canadarm robotics
Digital satellite platforms
Geointelligence
Radar satellites
Space exploration systems
Communications satellites

It is arguably Canada's most strategically important aerospace company.

Financial Snapshot

Blue Canyon Acquisition

One of the most significant recent announcements was MDA's agreement to acquire Blue Canyon Technologies from RTX.

Management expects the acquisition to:

expand U.S. defense exposure,
strengthen satellite manufacturing,
increase the opportunity pipeline by roughly US$3.5 billion, and
become accretive to earnings by 2027.

Major Customers

MDA serves:

NASA
Canadian Space Agency
European Space Agency
Telesat
Global commercial satellite operators
Defense agencies

Why I Like MDA

Compared with Rocket Lab and Redwire, MDA provides:

stronger cash generation,
a larger installed customer base,
decades of execution,
and lower operational risk.

For a Canadian investor, it also offers domestic exposure to the expanding North American defense and space ecosystem.

Why These Three Companies Fit Together

Theme	Rocket Lab	Redwire	MDA
Launch	★★★★★	★	★
Satellite manufacturing	★★★★★	★★★★	★★★★★
Robotics	★★★	★★★★★	★★★★★
Defense	★★★★★	★★★★★	★★★★
Space infrastructure	★★★★★	★★★★	★★★★★
Revenue stability	★★★	★★★	★★★★★
Long-term optionality	★★★★★	★★★★	★★★★

Suggested Portfolio Weighting

For a long-term growth investor, I would allocate:

Rocket Lab: 50%
MDA Space: 30%
Redwire: 20%

This weighting reflects my view that Rocket Lab has the greatest upside, MDA provides stability and execution, and Redwire offers higher-risk upside through its specialized space systems and defense technologies.

Five-Year Price Outlook (My Scenario Analysis)

These are not predictions but scenario estimates based on successful execution, continued defense spending, and sustained growth in commercial space infrastructure.

Company	Current Position	Base Case (2031)	Bull Case (2031)
Rocket Lab	High-growth platform	2–3× current value	4–6× current value
Redwire	Emerging infrastructure supplier	2–3×	4–5×
MDA Space	Established leader	1.8–2.5×	3–4×

Final Investment Case

If I had to build a single "Space Economy Portfolio" for the next five years, this would be it.

Rocket Lab offers the greatest asymmetric upside through vertical integration, reusable launch, satellite manufacturing, defense, and acquisitions.

MDA Space provides the foundation—an established, profitable business with deep customer relationships, a multibillion-dollar backlog, and strategic expansion into the U.S. defense market.

Redwire supplies the mission-critical technologies that make many space missions possible, giving investors exposure to high-value "picks-and-shovels" rather than depending solely on launch volumes.

We have a long-standing preference for investing in infrastructure companies that enable transformational technologies—rather than the end applications themselves—I think this three-company portfolio aligns exceptionally well with our broader investment themes in AI, robotics, defense, and aerospace.

It also complements our existing holdings in Kraken Robotics and Volatus Aerospace by extending our exposure from the oceans and atmosphere into orbital infrastructure.