"Patience is a Super Power" - "The Money is in the waiting"

Monday, November 9, 2026

Could a collision between Private Credit and Ai risk cause financial instability and/or market risk?

 A CAUTIONARY NOTE


NOVEMBER 9, 2026 |

Will the Private Credit Crisis and the AI Boom Collide?

Could the enormous financing commitments behind artificial intelligence become the catalyst for a broader financial crisis?

My Investment outlook: Caution warranted 

 systemic collapse not established.

The rapid expansion of private credit and the extraordinary capital commitments supporting the artificial intelligence revolution are creating a potentially dangerous intersection of financial risks. Individually, each presents vulnerabilities. Together, under adverse economic conditions, they could amplify a market correction into a more serious credit and liquidity crisis.

The central concern is not whether artificial intelligence will transform the global economy. It almost certainly will. The question is whether the financial obligations being undertaken today can be supported by the revenues, earnings and cash flows generated tomorrow.

History demonstrates that even transformative technologies can be accompanied by unsustainable financing structures. The internet revolution survived the dot-com collapse of 2000. The companies and investors financing it did not all survive.

The same distinction may become critically important in the AI investment cycle.

1. The IMF identifies a convergence of risks

The International Monetary Fund's October 2026 financial stability analysis identifies three potential triggers for broader financial turmoil: an AI-related asset-price correction, a sharp increase in sovereign bond yields, and significant cyber disruptions.

At the same time, the IMF highlights vulnerabilities associated with leverage, liquidity and interconnected financial institutions, including participants in the rapidly expanding private-credit market.

These risks are not independent.

A rise in government bond yields increases borrowing costs and reduces the present value of future corporate earnings. An AI valuation correction could undermine investor confidence and make refinancing more difficult. A credit-market disruption could then force lenders and investors to sell assets, amplifying the original market decline.

This is how an ordinary market correction can potentially become a broader financial-stability event.

2. The scale of AI financing deserves scrutiny

The IMF's October 13 briefing reportedly examined 14 publicly disclosed AI-related financing transactions involving the following aggregate commitments.

REPORTED FINANCING AND COMMITMENTS — USD

$300B

Equity financing

$650B

Debt financing

$1.4T

Future revenue commitments

Figures supplied from the IMF briefing description. They represent different financial categories, not an additive estimate of outstanding debt, losses or capital at risk. Their precise definitions and potential overlap require verification.

The distinction between these categories is essential. Equity represents ownership capital at risk. Debt generally requires contractual servicing and repayment. Future revenue commitments may represent expected contractual payments rather than borrowed money.

Nevertheless, the combined financing architecture can become vulnerable when projected demand fails to materialize.

Consider a hypothetical scenario in which AI infrastructure is constructed on the assumption of rapidly increasing demand for computing capacity, but actual utilization and pricing fall short of expectations.

The consequences could unfold simultaneously:

  1. Equity markets: AI infrastructure companies and their suppliers experience valuation compression as earnings expectations decline.

  2. Credit markets: Highly leveraged borrowers face declining cash flows, weaker debt-service coverage and more difficult refinancing.

  3. Private capital: Lenders experience deteriorating credit quality, valuation write-downs and pressure from investors seeking liquidity.

  4. The broader economy: Reduced capital expenditure affects semiconductor manufacturers, data-centre developers, electrical equipment suppliers and construction businesses.

The most dangerous outcome would be a self-reinforcing cycle in which weaker AI revenues reduce access to financing, forcing companies to cut spending, which further weakens revenues throughout the AI supply chain.

3. Why private credit could amplify the problem

Private credit has become an important alternative to traditional bank lending. Its expansion has created financing opportunities for companies that might otherwise struggle to obtain capital.

However, the market also has structural weaknesses.

Private loans are frequently illiquid, valuations can depend on models rather than observable market prices, and disclosures are often less comprehensive than those of publicly traded bonds.

Some funds also employ leverage or depend on bank-provided credit facilities. This creates channels through which losses in private markets can spread into the regulated financial system.

The Financial Stability Board has identified concerns involving leverage, valuation opacity and growing connections among private-credit funds, banks and insurers.

The principal danger is not necessarily the initial loan default. It is the possibility that multiple lenders, investors and financial institutions simultaneously discover that their assets are worth less, and are less liquid, than previously assumed.

A critical qualification is that private-credit funds differ considerably. Many have long-duration committed capital and do not face the same immediate withdrawal risks as banks. A crisis involving private credit therefore would not automatically resemble the bank runs of 2008.

4. Is another 2008 financial crisis developing?

Weiss Ratings has warned that vulnerabilities in private credit could produce a crisis comparable to, or potentially more severe than, the 2008 financial collapse. 

(Ed note: Weiss has a good track record of calling crisis level events and are not financed or rewarded by the firms they cover)

There are legitimate reasons to investigate that possibility. However, the available regulatory assessments do not establish that such an outcome is inevitable or even the most likely scenario.

The Reserve Bank of Australia has reported relatively limited direct banking-system exposure to private-credit funds in several major jurisdictions, while acknowledging growing indirect risks.

The Bank of Canada has similarly identified vulnerabilities but generally considers direct Canadian financial-system exposures more manageable, although international contagion remains a concern.

Today's banking system also benefits from stronger capital requirements and regulatory safeguards introduced following the global financial crisis.

The significant difference is that some financial risks have migrated outside traditional banks into less transparent private-market structures.

Consequently, the next serious credit disruption, should one occur, may begin outside the banking system while still affecting banks, public equities and the broader economy.

5. The warning signs are no longer entirely theoretical

Several recent regulatory findings deserve particular attention.

The IMF confirms that approximately $320 billion of the $650 billion in debt associated with the 14 AI financing transactions was undertaken by investee companies, including arrangements involving guarantees, contingent financing and off-balance-sheet obligations. This makes the financial strength of the borrowers and the enforceability of their commitments particularly important.

IMF eLibrary+1

The Financial Stability Board estimated private-credit assets at approximately US$1.5–2 trillion at the end of 2024, with substantial data gaps. It identified approximately US$220 billion of reported drawn and undrawn bank credit lines to private-credit funds, with some commercial estimates higher. These are exposures, not recognized losses.

Financial Stability Board+1

Perhaps most revealing, the Reserve Bank of Australia's October 2026 review reported that US non-traded private-credit funds experienced more than US$15 billion in redemption requests during the second quarter of 2026, approximately 12% of their combined net asset value. Concerns about AI disruption to software borrowers contributed to this pressure.

RBA

This establishes an important distinction: 

the potential relationship between AI disruption and private-credit stress is already observable, although it "has not" developed into a generalized financial crisis.

6. What a collision could mean for investors

The consequences would depend on whether financial stress remained contained or developed into widespread deleveraging.

Investment category

Likely response in a severe credit shock

Nasdaq and expensive AI equities

Significant multiple compression and potentially sharp declines

Small-cap technology and speculative growth

Especially vulnerable to disappearing liquidity and higher financing costs

Defense and robotics

Potential initial selloffs despite favorable long-term government spending

Banks and alternative-asset managers

Credit losses, valuation concerns and reduced investor confidence

Gold bullion

Potential safe-haven benefit, although forced liquidation can cause initial declines

Precious-metals streamers, including WPM and FNV

Initial equity-market risk followed by potential recovery if precious-metal prices strengthen

Cash and short-term government bills

Generally defensive and useful for preserving investment flexibility

For investors in emerging technology and smaller defence companies, this distinction matters considerably. (ed note: where we own shares)

A business can possess excellent technology, a substantial addressable market and growing customer interest, yet still experience a severe stock-price decline when institutional investors reduce risk.

Companies with substantial cash reserves, manageable debt, positive operating cash flow and funded expansion plans should generally be better positioned than businesses dependent on repeated equity raises.

Conversely, an extended liquidity crisis could create exceptional long-term buying opportunities for investors who retain capital and avoid forced selling.

7. Seven indicators that could confirm a developing crisis

I would monitor the following measures rather than attempt to forecast a financial collapse from a single bearish prediction.

Indicator

Warning development

High-yield credit spreads

Sustained widening, especially beyond approximately 500 basis points

Private-credit defaults

Rising defaults and payment-in-kind interest across multiple industries

Private-credit redemptions

Persistent withdrawal requests, restrictions and distressed asset sales

Bank funding conditions

Rising funding spreads and persistent repo-market disruptions

Nasdaq market breadth

Declining participation alongside weakening earnings expectations

Corporate refinancing

More expensive or unavailable refinancing for weaker borrowers

Financial-sector results

Unexpected credit provisions, write-downs and deteriorating lending standards

A high-yield spread above 500 basis points is a useful historical warning reference, not a definitive crisis threshold. Changes from prevailing levels, the speed of deterioration and the persistence of stress are equally important.

The most compelling warning would be simultaneous deterioration in credit spreads, corporate earnings expectations and market liquidity.

A Nasdaq decline alone would not establish a credit crisis. Similarly, isolated private-credit defaults would not necessarily justify abandoning technology investments.

The evidence becomes more persuasive when the signals reinforce one another.

8. Investment strategy: Prepare without abandoning opportunity

For a portfolio like ours, with meaningful exposure to artificial intelligence, quantum computing, robotics, defence technologies and precious metals, the prudent response is to strengthen financial resilience rather than attempt to time a market collapse.

I favor maintaining a meaningful liquidity reserve, avoiding margin debt, limiting excessive concentration in speculative companies and distinguishing financially established businesses from those dependent on external financing.

For new purchases, balance-sheet strength and the ability to finance operations through a prolonged capital-market downturn deserve increased weight.

Investors should also distinguish between companies benefiting from durable AI demand and those whose valuations depend on exceptionally optimistic assumptions about future adoption, pricing and profitability.

Defensive holdings, including short-term government securities and selected precious-metals exposure, may help diversify risk. However, no equity investment, including a gold-streaming company, should be treated as a guaranteed safe haven during a liquidity crisis.

An outright short position against the Nasdaq would require stronger evidence of deteriorating market conditions. Shorting a market dominated by profitable, financially strong companies can be expensive and dangerous when the timing of a correction is uncertain.

9. Final investment assessment

RISK ASSESSMENT | NOVEMBER 2026

Private-credit vulnerabilities  -  Elevated

AI financing interdependence  -  Elevated

Confirmed systemic financial crisis  -  Not established

Portfolio response  -  Defensive selectivity

Weiss Ratings is identifying genuine vulnerabilities, but its suggestion of a crisis potentially exceeding 2008 goes further than today's evidence currently supports.

The IMF, Financial Stability Board and Bank of Canada independently recognize that leverage, opaque credit exposures, elevated asset valuations and growing financial interconnectedness could amplify future economic shocks.

The IMF also provides an important counterweight: its severe stress analysis finds that the banking system as a whole remains resilient, although a vulnerable subset of banks could become undercapitalized.

International Monetary Fund

The crucial issue is whether the financial system has become excessively dependent on optimistic assumptions about AI profitability and continued access to inexpensive capital.

If those assumptions weaken, the consequences could extend well beyond AI companies themselves.

My investment conclusion: 

The private-credit market and AI financing boom have developed meaningful points of financial interdependence. A serious disappointment in AI revenues, particularly if accompanied by rising bond yields and tighter lending conditions, could trigger a substantial repricing of technology equities and credit assets.

A systemic crisis is possible, but not inevitable. The available evidence supports heightened caution, not a prediction of financial collapse.

The appropriate investment response is to preserve liquidity, favor financial strength, control speculative exposure and remain prepared to acquire high-quality assets should market dislocation create compelling valuations.

The greatest danger may not be that artificial intelligence fails. It may be that investors and lenders have financed its success on a timetable that proves too optimistic.

Preparation, rather than panic, remains the appropriate strategy.

Primary regulatory sources

Research limitation: This note verifies the principal regulatory warnings and financing figures but does not establish whether November 9 market prices, credit spreads and institutional positioning are currently confirming a crisis. The investment scenarios are forward-looking judgments, not forecasts of certain outcomes.

Recommended next investigation: Compare current Nasdaq valuations, US high-yield credit spreads, private-credit redemption trends and institutional bearish positioning to determine whether the markets are already signaling the financial instability described in this report.

Below we Investigate whether the markets are confirming this warning

Are the Markets Confirming Weiss Ratings' Financial-Crisis Warning?

An investigation into Nasdaq valuations, market breadth, private-credit deterioration, institutional positioning and financial-system liquidity.

CURRENT EVIDENCE

Elevated caution

Early warning signals, not a confirmed systemic crisis

The evidence supports Weiss's concerns about vulnerabilities in private credit and AI-related financing. However, publicly traded credit markets are not yet exhibiting the widespread distress normally associated with an imminent financial collapse.

Private-credit deterioration  -  Confirmed

Broad credit-market crisis  -  Not confirmed

Nasdaq market breadth  -  Weakening

2008-style systemic collapse  -  Unsubstantiated

The most important finding is that private-credit markets are showing measurable signs of deterioration while public high-yield credit spreads remain relatively contained.

This divergence deserves attention. 

It could indicate that stress is concentrated in particular borrowers and lending structures. Alternatively, it could represent an early stage of broader deterioration that public markets have not yet fully priced.

Neither interpretation can be established with certainty today.

1. Nasdaq valuations and market breadth

The first question is whether the Nasdaq is priced for an optimistic future while underlying participation is deteriorating.

NASDAQ-100 FORWARD P/E

18.07×

November 6, 2026

Below 10-year average

STOCKS ABOVE 200-DAY EMA

44.5%

November 6, 2026

Weak participation

An independent Nasdaq-100 valuation series estimates forward earnings at approximately 18.07 times, compared with its reported 10-year average of 23.01 times. The calculation is not an official Nasdaq series, and its recent methodology differs from its historical methodology. Consequently, it should not be treated as definitive evidence of undervaluation.

History and Daily Estimates

The breadth figures are more concerning.

Nasdaq-100 participation — November 6

Above 20-day EMA  -  41.6%

Above 50-day EMA  -  44.5%

Above 200-day EMA  -  44.5%

Source: Chart in Motion, independent constituent-level EMA calculations, November 6, 2026.
Chart in Motion

Fewer than half of Nasdaq-100 constituents are trading above their intermediate- and long-term exponential moving averages.

That is a genuine indication of weak market participation, even though it is not sufficient to establish a bear market or an impending crash.

Assessment: Nasdaq breadth supports caution. 

The available forward valuation estimate does not support the claim that the entire Nasdaq-100 is exceptionally expensive. Valuation risk may instead be concentrated in particular AI companies and financing-dependent business models.

2. High-yield credit spreads: The critical counterargument

High-yield spreads measure the additional compensation investors demand to lend to lower-credit-quality corporations rather than the US Treasury.

In a serious credit crisis, these spreads typically widen substantially as lenders demand greater compensation for default and liquidity risks.

US HIGH-YIELD CREDIT SPREAD

348 bps

November 5, 2026

ICE BofA US High Yield Index option-adjusted spread

November 4

332 bps

November 5

348 bps

Latest directly verified broad high-yield observation in this investigation.
St. Louis Fed

The spread widened by 16 basis points in one day, but 348 basis points is not, by itself, a crisis-level reading.

A separate B-rated corporate bond series registered 361 basis points on November 6, compared with its long-term average of 516 basis points.

Historical Data & Trends

This matters because public bond investors are still accepting comparatively modest compensation for default risk.

If a widespread corporate credit collapse were imminent and widely anticipated, one would ordinarily expect much greater stress in the high-yield market.

Assessment: Public credit spreads currently contradict the strongest version of Weiss's thesis. They do not rule out future deterioration, particularly because private-credit exposures are less transparent and may react with a delay.

3. Private-credit defaults, markdowns and redemptions

This is where the evidence supporting Weiss becomes considerably stronger.

A September Reuters examination of regulatory filings from 44 US business development companies found deteriorating loan valuations during the first half of 2026, particularly among certain software borrowers. However, much of the broad markdown activity occurred during the first quarter, with second-quarter losses concentrated among fewer borrowers.

MarketScreener

Moody's September analysis provides additional evidence of emerging credit stress.

Private BDC modeled default probability

0.92%

Spring 2026, up from 0.77%

PIK share of public BDC investment income

~8%

Up from ~5.5% in 2021

Withdrawal requests at some funds

10.5%

Versus typical 5% quarterly gates
Moody's, September 25, 2026. The 0.92% figure is a modeled probability, not an observed realized default rate. Withdrawal pressure refers to selected vehicles, not the entire private-credit market.
moodys.com

The increase in payment-in-kind (PIK) interest is particularly important.

PIK allows borrowers to add interest to outstanding debt rather than pay it in cash. This may provide legitimate financial flexibility, but it can also conceal weakening debt-service capacity.

If borrowers increasingly cannot service their interest obligations from operating cash flow, their debt balances may grow even while reported loan income remains positive.

The Bank of Canada has also identified outflows from private-credit funds exposed to software companies, alongside widening leveraged-loan spreads in that sector.

Bank of Canada

Assessment: Private-credit stress is real and measurable. It supports Weiss's concern about deteriorating loan quality, but does not yet establish that defaults are spreading sufficiently to threaten the entire financial system.

4. Bank funding markets: Is liquidity beginning to disappear?

A credit crisis becomes particularly dangerous when financial institutions struggle to obtain short-term funding.

The overnight repurchase agreement market is an important indicator because banks, dealers and investment funds depend on it for liquidity.

US FUNDING CONDITIONS — NOVEMBER 6

SOFR overnight rate  -  3.89%

Effective fed funds rate  -  3.88%

SOFR–fed funds difference  -  +1 bp

Bank reserves, weekly average  -  $2.93T

Federal Reserve Bank of New York reference-rate data compiled November 9; bank reserves averaged through November 4.
ARCANE

The one-basis-point difference between SOFR and effective fed funds is reassuring. It does not indicate an unusual premium for secured overnight financing.

Bank reserves remain substantial, although their reported level has declined approximately $18 billion over the preceding month.

This is not evidence that all banks are healthy. It simply means that the broad overnight funding indicators examined here are not displaying the kind of acute disruption expected during a major liquidity crisis.

Assessment: Funding markets currently contradict the argument that a systemic liquidity breakdown is already underway.

5. Institutional positioning: Are sophisticated investors turning bearish?

This investigation uncovered a particularly interesting divergence.

E-mini Nasdaq-100 speculative futures positioning

-70,000-35,000035,00070,000Aug 11Aug 25Sep 8Sep 22Oct 6Oct 20Nov 3

CFTC Legacy Commitments of Traders, futures only. Net contracts; negative values represent net shorts.

Selected weekly observations, not a continuous daily series.
Positioning Analysis

As of November 3, large non-commercial speculators remained net long 42,873 E-mini Nasdaq-100 futures contracts, equivalent to approximately 14.7% of open interest.

Their net long position had declined by 5,966 contracts over the preceding week. Yet the separate leveraged-fund category remained near the upper end of its three-year positioning range.

Positioning Analysis

This is important because the data do not show that major speculative futures participants have collectively abandoned the Nasdaq.

They remain substantially exposed to the upside, although some positioning has been reduced.

At the same time, options activity shows greater demand for protection. A November 8 report described record Cboe put-option volume of approximately 11.23 million contracts on November 5.

24/7 Wall St.

However, total put volume is not equivalent to the QQQ put/call ratio. Nor does it reveal whether options were purchased to establish new bearish positions, hedge existing portfolios or close previous positions.

Assessment: Institutional signals are mixed. Futures positioning remains relatively bullish, while unusually heavy put activity indicates increased demand for downside protection or bearish exposure. This is not conclusive evidence of coordinated institutional positioning for a crash.

6. Financial-crisis evidence scorecard

The following table separates verified warning signals from evidence of an actual systemic crisis.

Market indicator

Latest evidence

Interpretation

Nasdaq valuation

18.07× forward earnings, independent estimate

Mixed

Nasdaq breadth

44.5% above 200-day EMA

Concerning

High-yield credit

348 bps, Nov. 5

Contained

Private-credit quality

Loan markdowns, rising PIK

Deteriorating

Private-credit liquidity

Elevated withdrawals at some funds

Deteriorating

Bank funding

SOFR only 1 bp above fed funds

Stable

Institutional positioning

Net-long futures, heavy put volume

Mixed

The classifications are analytical judgments, not a statistically calibrated crisis-prediction model. Data have different reporting dates and coverage.

The pattern is revealing: stress is visible in private credit and equity-market breadth, but has not yet produced widespread disruption in publicly traded credit or overnight funding markets.

7. What would change my assessment?

I would use a staged approach rather than declare a crisis based on one indicator.

Stage 1 — Heightened caution (current assessment)

Private-credit deterioration, weak Nasdaq breadth and increased hedging demand, but contained broad credit spreads and functioning funding markets.

Stage 2 — Defensive repositioning

High-yield spreads move sustainably above 450–500 basis points, Nasdaq breadth continues weakening, private-credit losses broaden beyond software, and refinancing becomes materially more difficult.

Stage 3 — Systemic-risk conditions

High-yield spreads widen sharply toward 700–800 basis points or higher, bank funding markets become persistently stressed, significant financial institutions disclose unexpected losses, and forced asset sales accelerate.

These are indicative warning thresholds, not guaranteed market outcomes. The speed of deterioration and interaction among indicators matter more than any single numerical trigger.

8. Investment implications for the next 6–12 months

For a growth-oriented portfolio with exposure to AI infrastructure, quantum computing, robotics, Canadian defence companies and precious metals, I would distinguish between business prospects and financing resilience.

Investment exposure

Main concern

Preferred approach

Profitable large-cap AI companies

Earnings disappointment, valuation compression

Selective holding

Quantum and speculative technology

High volatility, financing requirements

Control position sizes

Defence technology, including FLT and PNG

Small-cap liquidity, contract timing

Review cash runway and funding

AI infrastructure suppliers

Capex slowdown and customer concentration

Prioritize cash flow and balance sheets

Gold and silver streamers

Initial equity selloff despite gold exposure

Long-term diversification

Cash and short-term bills

Opportunity cost if markets recover

Maintain purchasing flexibility

I would not treat a general decline in technology shares as sufficient reason to sell a fundamentally sound company. However, I would be more demanding about valuations and less willing to increase exposure to businesses dependent on continuous capital raising.

For investors already holding concentrated speculative positions, reducing portfolio fragility may be more valuable than attempting to predict the exact timing of a market reversal.

9. Final verdict: Is Weiss right?

My conclusion is that Weiss appears substantially more persuasive about the existence of financial vulnerabilities than about the inevitability or magnitude of a coming crisis.

The strongest evidence supporting Weiss is the deterioration in private-credit quality, elevated redemptions at certain funds, weakening Nasdaq breadth and increasing investor demand for downside protection.

The strongest evidence against an imminent 2008-style event is that public high-yield spreads remain contained, overnight funding markets are functioning normally, and large speculative futures participants have not collectively shifted to aggressive net-short positioning.

The most important unresolved question is whether private-credit problems will remain concentrated in vulnerable borrowers or spread into the broader corporate lending and banking systems.

INVESTMENT VERDICT — NOVEMBER 9, 2026

Cautious, but not outright bearish

The evidence supports we prepare for greater volatility and potential credit contagion. It does not currently justify treating a financial collapse as the base case.

We are preserving liquidity, reviewing speculative exposure and avoiding leverage over immediately shorting the Nasdaq or liquidating fundamentally strong investments.

The three developments to monitor most closely

  1. High-yield spreads: Whether they move from approximately 350 basis points toward 500 basis points and remain elevated.

  2. Private-credit stress: Whether markdowns, PIK interest and redemption restrictions spread beyond isolated funds and software borrowers.

  3. Nasdaq breadth and positioning: Whether participation falls further while leveraged investors unwind substantial long positions.

A simultaneous deterioration in all three would materially strengthen Weiss's warning.

Sources and reporting limitations

The investigation draws on Federal Reserve high-yield spread data, New York Fed funding-market data, CFTC futures positioning, Moody's private-credit analysis and Bank of Canada financial stability research.

The latest verified market observations are primarily from November 3–6, 2026. Private-credit disclosures lag public markets, the Nasdaq valuation and breadth estimates use independent methodologies, and futures positioning does not capture all institutional hedges or cash-equity exposure. No comprehensive November 9 realized private-credit default rate or current QQQ put/call ratio was verified.

Bottom line: The evidence indicates a market with genuine structural vulnerabilities, not a financial system already in collapse. The combination of weak Nasdaq breadth and deteriorating private-credit fundamentals warrants continued scrutiny, especially while public credit markets remain relatively complacent.

This analysis is intended for investment research and risk assessment, not as a prediction of a specific market event.

Wednesday, November 4, 2026

Expanding NATO visibility in Europe this week - Kraken Robotics Sub Sea technology

 


Kraken Robotics (TSX-V: PNG): November 2026 NATO and Naval Defence Events

My assessment: Kraken's increasing visibility at allied naval defence events is strategically positive, particularly following its acquisition of Covelya. The company is now presenting a much broader range of underwater defence technologies, rather than primarily promoting its KATFISH minehunting system.

There is, however, an important distinction between participating in a NATO-sponsored exercise, exhibiting at a naval defence trade show, and securing an actual NATO procurement contract.

1. Confirmed exhibition: EURONAVAL 2026

Paris, France — November 3–6, 2026

Paris Nord Villepinte Exhibition Centre

Kraken is exhibiting at Booth K121, showcasing its newly integrated naval technology portfolio, including KATFISH, synthetic aperture sonar, Sentinel underwater intruder detection, SeaPower batteries and navigation systems.

Kraken's November 4 LinkedIn announcement specifically highlights the integration of the former Forcys team into its broader defence offering.

LinkedIn+1

Why this matters: Kraken can now approach naval customers with complementary products for mine detection, underwater surveillance, infrastructure protection and autonomous underwater operations.

An especially interesting development is the company's announcement that it has shipped its first major Sentinel Intruder Detection System under the Kraken name, intended to protect multiple ports for an allied navy. That is evidence of actual commercial delivery, not simply exhibition activity.

LinkedIn

2. NATO Edge 2026 — İzmir, Türkiye

November 17–19, 2026

This is a NATO-organized technology and procurement event, bringing together military decision-makers, defence contractors and technology suppliers.

Kraken's participation has not yet been independently confirmed.

NATO Edge is particularly relevant because it connects suppliers with NATO capability requirements and acquisition processes. Kraken's sonar, underwater navigation and surveillance technologies fit several of those requirements.

Events+1

I would watch for confirmation that Kraken or its Covelya subsidiaries are exhibiting or meeting procurement officials there.

3. Recent NATO operational demonstration — REPMUS 2026

Portugal — reported October 29, 2026

Unlike a trade show, REPMUS involves practical testing with allied naval forces.

Kraken, Sonardyne, Voyis and EIVA demonstrated combined mine-countermeasure capabilities.

Kraken reported detecting and classifying all 21 targets across eight survey areas, while its integrated imaging and navigation technologies achieved a 100% identification rate in the reported demonstration.

LinkedIn

This is arguably more significant than exhibiting at a trade show. It demonstrates technical interoperability between Kraken's newly combined businesses in an allied operational environment.

What does this mean for Kraken shareholders?

I see three important implications.

1. Improved access to defence procurement: Kraken is gaining opportunities to demonstrate its systems directly to naval operators, defence contractors and purchasing authorities.

2. Covelya acquisition benefits: The combination of Kraken sonar, Sonardyne navigation, Voyis imaging, EIVA software and Sentinel security systems creates opportunities to sell integrated solutions rather than individual components.

3. Potential for larger contracts: Successful operational demonstrations and broader product offerings could support future orders for mine countermeasures, underwater surveillance, autonomous vehicles and port security.

There is still a substantial difference between demonstrated capability and funded procurement. Exhibitions alone do not establish new orders or near-term revenue.

However, Kraken's expanding and cutting edge technology cannot be ignored as the expansion of NATO navies around the world, including Canada's, are beginning to spend billions on Sub Sea military and monitoring technology.  

Kraken has that technology in spades.





Investment verdict — PNG

Constructive for the 12–24-month investment thesis.

Kraken is increasingly positioned as a comprehensive underwater defence technology supplier. Its recent Sentinel shipment and REPMUS results strengthen that assessment.

Previous Articles:

Kraken Robotics in a great position to help supply NATO navies with their sub sea technology!

Monday, November 2, 2026

Volatus Aerospace newest product may be a game changer

 


The most significant recent proprietary product introduced by Volatus Aerospace (TSX: FLT) is its V-Cortex™ AI Flight Controller and Autonomy Operating System, unveiled May 27, 2026.

It is particularly interesting from a Canadian defence investment perspective.

What does V-Cortex do?

Think of V-Cortex as the intelligent brain of a military drone.

It combines a miniature flight-control computer with AI-enabled software, allowing drones to operate with greater independence from human pilots.

Its principal capabilities include:

  • Flying without GPS: Designed to navigate when satellite signals are jammed or unavailable.

  • Autonomous missions: Enables drones to execute programmed tasks and make certain onboard decisions.

  • Military surveillance: Supports intelligence, reconnaissance and sensor integration.

  • Counter-drone operations: (very important) Can support systems designed to detect, track or respond to hostile drones.

  • Multiple platforms: Designed for integration into different drones and potentially unmanned ground and maritime systems.

Remarkably, the controller measures approximately 3.5 × 3.5 centimetres and weighs less than 15 grams.

GlobeNewswire+1

What's particularly new?

On September 22, 2026, Volatus announced that V-Cortex had successfully completed initial flight testing without GPS or external sensors, using onboard default sensors.

That is a meaningful technical milestone, especially for operations in Canada's Arctic and in electronic-warfare environments. However, additional testing is still required before widespread operational deployment.

Why this matters to FLT shareholders

V-Cortex potentially moves Volatus beyond simply manufacturing and operating drones toward owning proprietary AI and autonomy technology.

That could create higher-value products, licensing opportunities and stronger differentiation in Canadian and NATO defence procurement.

There is also SKYDRA™, introduced in March 2026, a subscription-based software platform for planning and simulating counter-drone operations. It is another example of Volatus expanding into proprietary defence software.

Autonomous Warfare: AeroVironment and Palantir Challenged – Analysts Give Volatus Aerospace the Thumbs-Up

My investment assessment: V-Cortex is potentially one of Volatus's most strategically important technologies. The September flight milestone strengthens its technical credibility, but the next critical step is converting that technology into paying defence customers and recurring revenue.

Kraken Robotics (TSX: PNG) — Updated Investment Note - Oct 30th 2026

 



October 30, 2026 | Investment outlook: 6–18 months

Investment Thesis: Strengthening — Bullish

Kraken Robotics continues to evolve from a specialized Canadian underwater technology supplier into an increasingly important participant in NATO-aligned naval modernization, autonomous mine countermeasures and subsea defence systems.

The company's $24 million in defence orders, announced March 17, included more than 10 customers across five countries, three new defence customers, and another KATFISH sonar sale to the Polish Navy. Importantly, Poland is a repeat customer, having originally selected KATFISH in 2020. This strengthens Kraken's credibility as an established supplier rather than an experimental technology provider.

Kraken Robotics

Important developments

  • Defence orders expanding: In addition to March's $24 million announcement, Kraken disclosed $28 million in battery and sonar orders in April and another $35 million in new orders in July. These announcements demonstrate continued commercial momentum, although they should not be interpreted as entirely incremental revenue without reviewing delivery schedules.

  • Covelya acquisition: The July acquisition substantially expanded Kraken's underwater technology portfolio through Sonardyne, EIVA, Voyis and other specialized businesses, creating opportunities for integrated sensor, navigation, imaging and autonomy solutions.

  • REPMUS 2026: Kraken's recently reported NATO exercise results are particularly encouraging. Its synthetic aperture sonar detected and classified all 21 targets across eight survey areas, while Voyis and EIVA technologies achieved a reported 100% target identification rate. This provides valuable operational validation, although exercise performance does not guarantee future procurement contracts.

  • 2027 opportunity: Increasing NATO emphasis on autonomous minehunting, underwater surveillance and protection of critical subsea infrastructure should favour companies capable of supplying interoperable systems rather than individual components.

Kraken Robotics+1

Financial position and outlook

2026 revenue guidance

C$290–320M

2026 adjusted EBITDA guidance

C$65–75M

Combined 2026 orders announced by Aug. 27

~C$355M

June 30 cash, excluding escrow proceeds

C$91.3M

Company-reported figures. Guidance includes six months of Covelya operations; the C$355M order figure combines both businesses and is not equivalent to recognized revenue.
Kraken Robotics

Investment risks

Kraken's rapid expansion brings acquisition-integration risk, potential shareholder dilution, defence procurement delays and valuation sensitivity. Q2 standalone revenue grew only 4%, and the company recorded a C$7.5 million net loss, highlighting the need to distinguish order momentum from realized earnings.

Kraken Robotics (PNG): Beyond KATFISH — The New Technology Portfolio

Investment and technology review | November 2, 2026

Kraken Robotics is evolving from a specialist in high-resolution underwater sonar into something potentially much more valuable: an integrated supplier of underwater sensing, autonomous navigation, optical imaging, subsea intelligence and advanced batteries.

The acquisition of the Covelya Group companies is particularly significant. It gives Kraken the opportunity to combine technologies that previously belonged to separate businesses into complete underwater surveillance and mine-countermeasure systems.

For investors, the important distinction is between technologies Kraken invented, technologies it acquired, and new integrated capabilities it can now offer.

KATFISH remains a flagship product, but several other technologies deserve attention, particularly those applicable to NATO submarine operations, autonomous underwater vehicles (AUVs), Arctic surveillance and seabed infrastructure protection.

1. The technologies I consider most important

SeaPower advanced batteries — developed by Kraken

High investment significance

These pressure-tolerant batteries power underwater drones, allowing longer missions without surfacing. Kraken has developed a higher-energy-density design for large and extra-large UUVs, delivering approximately 30% improvement over its previous design, plus a compact design targeting smaller vehicles.

Why it matters: Kraken can supply batteries to competing underwater-drone manufacturers, regardless of whose sonar they use. A 2026 master supply agreement for XL-UUV batteries supports this opportunity.

NEWS RELEASE+1

Circular Synthetic Aperture Sonar (C-SAS) — developed by Kraken

Emerging technology

A dual-frequency sonar system designed to image seabed objects from a full 360-degree range of viewing angles. This can improve object classification and identification beyond conventional straight-line sonar passes.

Why it matters: Potentially valuable for confirming suspicious objects, identifying underwater hazards and inspecting seabed infrastructure. It is a development milestone, not yet evidence of widespread commercial adoption.

NEWS RELEASE

SPRINT-Nav — acquired through Sonardyne

Combines inertial navigation, Doppler velocity measurements and depth sensing to help underwater vehicles know their position when GPS signals cannot reach them.

Why it matters: Navigation is essential for virtually every autonomous underwater vehicle, whether deployed for minehunting, reconnaissance, submarine support or scientific surveys. It creates an opportunity for recurring platform sales beyond sonar.

GlobeNewswire

Sentinel Intruder Detection Sonar — acquired through Wavefront

An underwater security system that automatically detects, classifies and tracks divers, swimmer delivery vehicles and underwater drones approaching protected facilities.

Why it matters: Direct application to naval bases, ports, energy facilities and critical maritime infrastructure. Kraken reported new demand in Europe and the Middle East during 2026.

GlobeNewswire

Discovery Stereo and underwater optical imaging — acquired through Voyis

Advanced underwater cameras and optical perception systems capable of producing detailed imagery and supporting three-dimensional reconstruction of subsea objects.

Why it matters: Sonar finds suspicious objects at distance; optical imaging helps establish precisely what they are. Combining these capabilities can strengthen autonomous mine identification and infrastructure inspection.

NaviSuite and visual SLAM — acquired through EIVA

Software for underwater navigation, mission planning, survey processing and three-dimensional mapping. Visual simultaneous localization and mapping (VSLAM) helps vehicles estimate their position while building a map of their surroundings.

Why it matters: Software can turn separate sonar, camera and navigation products into an integrated autonomous mission capability. It also creates potential for software licensing and ongoing support.

Vigilant Forward-Looking Sonar — acquired through Sonardyne

Detects obstacles ahead of underwater and surface vehicles, helping them navigate safely in complex environments.

Why it matters: Obstacle avoidance is a fundamental requirement for autonomous underwater missions. Kraken reported record deliveries of Vigilant systems in its August 2026 update.

Kraken Robotics

2. Other technologies now within Kraken

Technology

Origin

Strategic application

Multi-Aperture Sonar (MAS)

Covelya

Underwater detection, classification and AUV missions

ScanFish remotely operated towed vehicles

EIVA

Seabed surveys and sensor deployment

Sub-bottom imaging and acoustic coring

Kraken / PanGeo

Locating buried objects and studying seabed geology

Underwater LiDAR

3D at Depth acquisition

Precision 3D inspection of pipelines, cables and infrastructure

Acoustic positioning and underwater communications

Sonardyne

Coordinating autonomous vehicles and underwater assets

Seabed pressure sensors

Covelya portfolio

Persistent subsea monitoring and detection applications

These are established or developing capabilities, not necessarily products invented since the July 2026 Covelya closing. Kraken's August disclosure specifically identified orders for monitoring systems, seabed pressure sensors and ScanFish vehicles.

Kraken Robotics+2

3. The most revealing development: REPMUS 2026

The recent NATO-aligned REPMUS exercise in Portugal provides an important illustration of the acquisition's strategic value.

As you previously highlighted, Kraken reported the following results:

Kraken synthetic aperture sonar

21/21

Targets detected and classified across eight survey areas

Voyis imaging + EIVA software

100%

Reported target identification rate in the exercise

The exercise demonstrated how the technologies complement one another:

Kraken SAS

Detects and classifies potential threats

Voyis optical imaging

Captures detailed images of identified targets

EIVA NaviSuite / VSLAM

Supports localization, mapping and target identification

Integrated underwater intelligence

More complete information for naval operators and autonomous systems

The results are encouraging evidence of interoperability, although controlled exercises do not establish performance under every operational condition.

An important qualification: these systems principally support mine detection, classification and identification. Physical mine neutralization or recovery generally requires additional equipment and procedures.

4. Which technologies have the greatest investment potential?

My ranking is based on addressable markets, potential adoption across multiple platforms and opportunities to increase Kraken's revenue per customer—not on announced product-specific profit margins.

Rank

Technology

2–4 year outlook

1

SeaPower batteries

Very high — growing UUV market and potential production-volume contracts

2

SPRINT-Nav and underwater positioning

Very high — essential equipment across multiple vehicle classes

3

Integrated SAS, Voyis and EIVA systems

High — differentiated end-to-end naval capability

4

Sentinel security sonar

High — ports, naval bases and critical infrastructure

5

Circular SAS

Promising — commercial uptake still needs validation

6

Underwater LiDAR and sub-bottom imaging

Moderate to high — attractive commercial and defence niches

The market opportunity is already extending beyond demonstrations. Kraken reported approximately C$355 million in combined announced 2026 orders by August 27, across Kraken and Covelya, covering products such as batteries, navigation, positioning, sonar and monitoring equipment. This is an announced-orders measure, not recognized revenue or a current backlog figure.

Kraken Robotics+1

5. My investment assessment

I believe the most significant consequence of the Covelya acquisition is that Kraken no longer needs to win the entire underwater-drone contract to benefit from it.

Consider an allied navy commissioning a fleet of autonomous underwater vehicles. Kraken may be able to supply the batteries, navigation, positioning, sonar, imaging and mission software, even when another defence contractor builds the vehicle itself.

This is a potentially powerful business model because it broadens Kraken's customer base and increases the value of its components on each platform.

It is particularly relevant to NATO's increasing interest in persistent underwater surveillance, protection of subsea cables and pipelines, and autonomous operations in challenging maritime environments.

The principal investment risks remain acquisition integration, defence procurement delays, competition from established naval technology suppliers, and the possibility that the share price already discounts substantial growth.

My conclusion: SeaPower batteries and the acquired Sonardyne navigation technologies could ultimately be as important to Kraken's commercial growth as KATFISH. The combination of Kraken SAS, Voyis optical imaging and EIVA software may become its most differentiated integrated defence offering.

The next evidence I would watch is whether Kraken begins winning substantial contracts explicitly bundling several of these technologies together, rather than selling individual components.

That would be a meaningful indication that the Covelya acquisition is delivering strategic value beyond simply adding six established companies and their existing revenues.



Investment verdict — BUY/HOLD, with discipline

My outlook remains bullish for 2027. Kraken's combination of advanced sonar, subsea batteries, autonomous systems integration and established NATO customer relationships gives it an increasingly attractive competitive position.


Monday, October 26, 2026

Nasdaq 100 - Growing concerns about excessive AI infrastructure spending, elevated technology valuations and increasingly complex financing arrangements

 

Nasdaq 100 vs CPI

Nasdaq-100: Are Institutional Investors Preparing for a Correction?

Update | October 26, 2026

The Investment Picture

Growing concerns about excessive AI infrastructure spending, elevated technology valuations and increasingly complex financing arrangements have raised questions about the sustainability of the Nasdaq's AI-driven rally.

However, the available short-selling, options and futures positioning data suggest a cautious market, but not one uniformly positioned for a major correction.

What the Numbers Tell Us

  • Magnificent Seven: Reported short interest remains relatively modest, generally below 2% of float, except Tesla at approximately 2.24%. Nvidia, Meta and Amazon experienced increases during the latest comparison period, while Apple, Microsoft and Alphabet experienced decreases.

  • QQQ options: The reported put/call open-interest ratio was approximately 1.45 on October 23, suggesting substantial downside protection, although not necessarily outright bearish speculation.

  • Nasdaq futures: The previously reviewed CFTC figures indicated that leveraged funds had substantially reduced their net short positions over the preceding three months, while asset managers remained net long.

  • Overall Nasdaq short interest: Reported shares sold short increased approximately 2.2% between July 31 and September 30.

Where the Real Risk Lies

The greater threat may not be short sellers, but the financial commitments underpinning the AI revolution.

Microsoft, Amazon, Alphabet, Meta and other technology giants are investing enormous amounts in data centres, advanced semiconductors and power infrastructure. Increasing financing obligations, uncertain future returns and concentrated market leadership create vulnerabilities if AI monetization fails to keep pace with spending.

A disappointment in earnings, financing conditions or anticipated AI returns could trigger a broad market repricing, even without substantial short-selling activity.

Investment Verdict: CAUTIOUS — NOT YET BEARISH

The available evidence supports defensive positioning and selective profit-taking, but does not yet establish a compelling case for aggressively shorting the Nasdaq.

Investors should monitor whether rising short interest among major technology companies coincides with increasing QQQ put demand and renewed institutional futures selling.

That combination would represent a stronger warning of a potential market correction.

Data Sources and Reporting Limitations

This assessment relies on several reporting systems with different publication schedules, methodologies and limitations:

  1. Nasdaq/FINRA short interest: Published twice monthly, generally approximately 8–10 business days after the reporting settlement date. The company-specific figures used in this assessment primarily reflect September 30, 2026, positions, not live October 26 positions. Short interest measures outstanding short positions, not daily short-selling volume.

  2. QQQ options: The cited October 23 put/call figures represent a snapshot of options positioning. High put open interest does not necessarily indicate bearish speculation; positions may represent hedging, spreads or market-making activity. The figures were obtained from third-party analytics rather than independently reconciled exchange-level records.

  3. CFTC Nasdaq-100 futures: Commitments of Traders reports normally reflect Tuesday positions and are published Friday. These reports aggregate positions by trader category and do not disclose individual institutions, trading intentions or complete exposure across stocks, ETFs and other derivatives. The previously cited October 20 figures have not been independently reconciled against the underlying CFTC dataset.

  4. Percentage of float: Short-interest percentages may vary between data providers because of differences in free-float estimates, share-class treatment, corporate actions and reporting dates.

  5. Historical comparisons: The July–October analysis combines observations from different dates and reporting sources. It is not a fully synchronized, independently audited 90-day dataset.

Important qualification: These indicators help assess investor positioning and market sentiment. They cannot independently establish institutional intentions, predict the timing of a correction or determine whether the Nasdaq is fundamentally overvalued.

Primary reference sources:

Bottom line: The Nasdaq's greatest vulnerability may be the enormous expectations already reflected in AI-related valuations. The risks warrant close monitoring, but the available positioning data do not confirm that a major downturn is imminent.

Monitoring established: Weekly review of Magnificent Seven short interest, QQQ options positioning and CFTC Nasdaq-100 futures activity. Figures reflect the latest reporting periods available for the October 26 assessment, rather than live trading positions.

Sunday, October 18, 2026

Should We Be Concerned About the Nasdaq? Is the Ai boom creating a financial bubble?

Nasdaq Vs CPI 10 years

 | Retire.Fund | October 18, 2026

Is the AI Boom Creating a Financial Bubble?

The Nasdaq has been one of the greatest beneficiaries of the artificial intelligence revolution. However, beneath the excitement surrounding AI, quantum computing and autonomous technologies, several financial warning signs are emerging that investors should not ignore.

Our concern is not that AI will fail. It is that the enormous cost of building AI infrastructure could create a financial crisis for some of the companies and institutions financing it.

1. Too Much Market Concentration

The Nasdaq-100 has become heavily dependent on a handful of technology giants, including Nvidia, Microsoft, Alphabet, Amazon, Meta, Apple and Tesla.

Together, these companies represent an exceptionally large portion of the index. (37%)

Consequently, disappointing financial results from just a few could trigger a substantial market correction.

This concentration becomes particularly concerning when several of these companies are simultaneously committing extraordinary amounts of capital to AI infrastructure.

2. The AI Capital Expenditure Explosion

Alphabet, Microsoft, Amazon and Meta are collectively spending hundreds of billions of dollars building data centres, purchasing advanced semiconductors and securing electricity supplies.

The financial question is increasingly straightforward:

Will AI generate sufficient revenue and profits to justify this unprecedented investment?

Rising depreciation expenses, rapid technological obsolescence and pressure on free cash flow could eventually force companies to reduce their infrastructure spending.

That would have consequences not only for the hyperscalers but also for semiconductor manufacturers, networking companies, construction firms and power infrastructure suppliers.

3. The Hidden Debt Problem

Perhaps the most troubling development is the growing use of special-purpose financing vehicles, joint ventures and private-credit arrangements.

Meta provides an important example. Its multibillion-dollar data-centre partnerships involve substantial project-level borrowing, long-term lease commitments and financial guarantees.

Although these arrangements can comply with accounting regulations, they make it more difficult for investors to assess the complete financial exposure associated with AI infrastructure development.

The danger is that losses could spread beyond technology companies into private-credit funds, insurers, pension funds and lending institutions.

This does not mean a banking crisis is inevitable, but the financial interconnectedness deserves considerably more scrutiny.

4. CoreWeave: A Warning Sign?

CoreWeave, a major provider of AI computing infrastructure, has experienced significant pressure in its debt markets, with yields on certain bonds recently reaching approximately 15–16%.

Such borrowing costs raise serious questions about the long-term economics of heavily leveraged AI infrastructure businesses.

CoreWeave could become an early warning indicator of broader financing difficulties.

The historical comparison is the telecommunications boom of the late 1990s. Internet adoption ultimately transformed the global economy, yet many companies financing the infrastructure suffered enormous losses when investment exceeded near-term commercial demand.

AI could follow a similar path: the technology succeeds, while some of the investors financing its expansion lose substantial amounts of money.

5. November's U.S. Elections Add Uncertainty

The November 3 midterm elections introduce another potential source of market volatility.

Changes in congressional control could influence technology regulation, investigations into financing practices, energy policy and the economics of data-centre construction.

However, the election itself is unlikely to determine the Nasdaq's direction. Corporate earnings, credit conditions and interest rates remain more important.

The approaching quarterly earnings reports from major technology companies may provide the clearest indication of whether AI spending is translating into sustainable profits.

6. Is It Time to Short the Nasdaq?

We believe the case for protecting technology portfolios has strengthened.

The combination of market concentration, enormous capital expenditures, complex financing arrangements and deteriorating credit conditions presents a credible risk of a significant correction.

Nevertheless, shorting the Nasdaq outright carries substantial risks. Technology stocks can rally sharply even when fundamental concerns remain unresolved.

A more measured approach might involve reducing excessive technology exposure, maintaining greater cash reserves or using modest, defined-risk hedging strategies.

For Canadian investors, unleveraged inverse Nasdaq ETFs or carefully structured put options may offer alternatives to outright short selling. These instruments have their own risks and require active management.

Our Investment Outlook

Nasdaq Outlook: CAUTIOUS — Elevated Correction Risk

Investment Horizon: Next 3–12 Months

We are not predicting an imminent financial collapse. 

The largest technology companies remain highly profitable, and ... 

demand for AI computing continues to expand.

However, investors should recognize that the financial foundations supporting the AI infrastructure boom are becoming increasingly complex and capital-intensive.

Investors should closely monitor:

  • Free cash flow and capital expenditure guidance from major technology companies.

  • Credit-market stress at CoreWeave and other heavily financed AI operators.

  • Private-credit exposure and off-balance-sheet financial commitments. (Meta comes to mind)

  • Signs of slowing data-centre construction or equipment orders.

  • Nasdaq market breadth and the performance of its largest constituents.

The Bottom Line

Yes, we should be concerned about the Nasdaq — not because the AI revolution is ending, but because investors may be underestimating the financial risks associated with building it.

The Nasdaq's concentration in a handful of technology giants creates the possibility that financial disappointment in relatively few companies could affect the entire index.

The greatest risk may be that investors are correctly anticipating the technological future while overpaying for the companies and infrastructure required to deliver it.

Our preferred strategy is caution rather than panic: 

protect capital, avoid excessive leverage, maintain liquidity and be prepared for opportunities if valuations correct.

The AI revolution may be only beginning. That does not mean every company financing it will be a successful investment.


Retire.Fund Investment Research — October 18, 2026

This commentary is intended for general investment information and does not constitute personalized financial advice. Market scenarios are uncertain, and investment strategies involving short positions or derivatives can produce substantial losses.

(Monitoring the Nasdaq-100)

Saturday, October 3, 2026

Kraken Robotics 60,000 Sq Ft Battery Plant is now operational

 


October 2026 — Update to our August 7, 2025 article

When we wrote our original article, “Kraken Robotics – NATO Navy supplier is moving up the ladder with massive, undersea battery facility!”, one of the most important pieces of our investment thesis was Kraken Robotics' planned 60,000-square-foot SeaPower™ battery manufacturing facility in Nova Scotia.

At the time, it was still a plan.

Today, it is becoming an operating asset — and Kraken Robotics itself has evolved into a considerably larger company.Kraken Robotics Update: The Battery Expansion We Were Waiting For

From Promise to Production

In August 2025, Kraken had committed approximately C$10 million to establish the Nova Scotia facility. Management expected it to substantially increase SeaPower battery manufacturing capacity and ultimately help bring total potential battery production toward C$200 million annually.

That expansion is no longer theoretical.

Kraken subsequently confirmed completion of the new Nova Scotia manufacturing facility, and in March 2026 CEO Greg Reid said battery manufacturing there was coming online.

The company's April investor presentation subsequently identified Halifax, Nova Scotia and Rostock, Germany as its battery manufacturing locations.

This gives Kraken something increasingly important in the rapidly expanding autonomous-underwater market:

Significant SeaPower battery manufacturing capability on both sides of the Atlantic.

And The Customers Are Arriving

Capacity means little without demand.

This is where the story becomes particularly interesting.

In January 2026, Kraken announced C$35 million in SeaPower battery sales to three customers.

In March, Kraken announced another approximately C$24 million of defence orders across SeaPower batteries, KATFISH and Kraken SAS.

In April, another C$28 million in SeaPower battery and SAS orders followed, involving five customers. Kraken said its technology was then integrated, or being integrated, into more than 30 different UUV platform types worldwide.

The company has therefore moved well beyond proving that SeaPower works.

It is increasingly about scaling production.

The XL-UUV Development May Be Even More Important

One development since our original article deserves particular attention.

Kraken has signed a long-term Master Supply Agreement with a major international conglomerate developing extra-large unmanned underwater vehicles — XL-UUVs.

The customer has not been publicly identified.

That means we should not speculate that it is any particular defence contractor.

But the size of these underwater vehicles helps explain why this opportunity matters.

Kraken's April 2026 investor material indicated that an XL-UUV can contain approximately 50–60 of its 20-kWh SeaPower battery modules.

That changes the economics considerably.

A future in which large autonomous submarines are produced in meaningful numbers could require substantially more battery capacity than today's smaller UUV market.

And Kraken has been building the manufacturing infrastructure to participate in exactly that market.

A Better Battery Opens Another Market

Kraken has also introduced a more compact SeaPower architecture offering approximately a 30% improvement in energy density.

That is strategically important because SeaPower is no longer aimed principally at very large underwater vehicles.

The new architecture allows Kraken to address small and medium-sized UUVs as well.

Kraken therefore potentially participates across much of the autonomous underwater spectrum:

Small UUV → Medium UUV → Large UUV → XL-UUV

For an investor, this may ultimately be more important than any single battery contract.

Kraken is attempting to become an enabling technology supplier to the broader underwater-autonomy industry.

Kraken Is No Longer The Company We Wrote About In August 2025

There has been another major change.

Kraken completed its acquisition of Covelya Group in July 2026.

That brought businesses including Sonardyne, EIVA, Voyis, Wavefront Systems and others into the organization.

Kraken's technology portfolio now spans much more of the underwater stack:

CapabilityKraken/Covelya exposure
Subsea powerSeaPower batteries
Synthetic Aperture SonarKraken SAS
Mine huntingKATFISH
Underwater navigationSonardyne
Acoustic positioning & communicationsSonardyne
Mission/survey softwareEIVA
Optical subsea imagingVoyis
Intruder detection & forward-looking sonarWavefront
Subsea services/LiDAR3D at Depth

This is a very different company from the relatively specialized Canadian ocean-technology business we originally followed.

The Numbers Are Scaling Too

Kraken reported C$102.2 million of revenue and C$25.0 million of Adjusted EBITDA for 2025.

Following the Covelya acquisition, management's 2026 guidance increased dramatically.

Kraken currently expects:

Revenue: C$290–C$320 million

Adjusted EBITDA: C$65–C$75 million

Adjusted EBITDA margin: approximately 22%–23%

Perhaps even more significant, by the end of Q2 Kraken and Covelya had announced approximately C$355 million of combined 2026 orders.

This does not mean C$355 million automatically becomes 2026 revenue. Order timing and revenue recognition matter.

But it demonstrates the scale of the opportunity now confronting the company.

Why The Nova Scotia Plant Matters More Today Than It Did In 2025

When we first wrote about the plant, we viewed it primarily as a capacity expansion.

Today we see it somewhat differently.

It is potentially a strategic piece of North American allied-defence manufacturing infrastructure.

Kraken can manufacture subsea batteries in Canada while maintaining its European battery operation in Germany.

That provides geographic diversification and puts production closer to North American customers at precisely the time when autonomous maritime systems are becoming increasingly important to Western defence planning.

And the plant includes multiple pressure-testing tanks rated to 6,000 metres.

This is specialized infrastructure, not a conventional battery assembly operation.

Our Investment Thesis Has Evolved

Our original thesis was relatively simple:

Kraken possessed excellent subsea sonar and battery technology and was positioned to benefit from growing NATO and commercial demand for autonomous underwater systems.

We believe the thesis has broadened considerably.

Kraken is increasingly becoming a subsea technology platform supplying many of the technologies required to make autonomous underwater systems work:

POWER → NAVIGATION → COMMUNICATION → SONAR → IMAGING → SOFTWARE → DATA

The Nova Scotia SeaPower facility fills an especially important part of that stack: power and endurance.

Without sufficient energy storage, an autonomous underwater vehicle cannot stay underwater longer, travel farther or carry increasingly sophisticated sensor payloads.

That makes battery technology a potentially valuable technological chokepoint.

What We Are Watching Now

The next question is no longer:

“Will Kraken build the Nova Scotia battery plant?”

It has.

The questions for shareholders now become:

How quickly will production ramp?

How much of the potential C$200 million annual battery capacity can Kraken utilize?

Will the XL-UUV supply agreement turn into large recurring production orders?

How quickly will new small- and medium-UUV customers adopt the higher-density SeaPower architecture?

And finally:

Can Kraken successfully integrate Covelya while maintaining the growth and margins investors now expect?

Those are the metrics that should increasingly determine the investment case through 2027 and 2028.

Investment Perspective — October 2026

Our August 2025 article described a promising Canadian defence-technology company investing aggressively ahead of anticipated demand.

Fourteen months later, several pieces of that thesis have materially advanced.

The Nova Scotia battery plant has been completed.

SeaPower orders have increased.

Kraken has gained additional defence customers.

Its technology is being integrated across more than 30 UUV platform types.

A long-term battery agreement has been signed with a manufacturer developing XL-UUVs.

And the Covelya acquisition has transformed Kraken into a substantially larger international subsea-technology company.

There are still important risks: Covelya integration, execution, working-capital requirements, contract timing, defence procurement delays and the challenge of filling newly installed manufacturing capacity.

But there is an important distinction between the Kraken story of August 2025 and the Kraken story today:

In 2025, investors were largely buying the expectation of scale.

In late 2026, we are beginning to see that scale being built and commercialized.

Ed Note

We originally added to our PNG position on August 7, 2025 because we believed Kraken was sitting at the intersection of several long-duration trends: NATO naval modernization, autonomous underwater vehicles, mine warfare, subsea infrastructure protection and offshore energy.

The opening of the Nova Scotia SeaPower manufacturing operation strengthens that thesis.

In our view, the next major milestone is not another factory announcement.

It is utilization.

If Kraken can progressively fill this new battery capacity with recurring UUV and particularly XL-UUV production orders, the Nova Scotia facility could become one of the more important growth assets inside the expanded Kraken organization.

That is what we will be watching closely through 2027.

Further: the connections between the new German made subs being stationed in Halifax NS with Canada's East Coast Navy, the German battery manufacturing plant, The idea that these subs will eventually be "command platforms" for XLUUV clusters, and the fact that the Arctic is a major concern of CAF cannot be ignored either. 

Currently there is no factual evidence for these connections however, I have learned over many years that,  "If it walks like a duck, swims like a duck and quacks like a duck, It's probably a duck!

We've been busy adding to our position!

Previous Articles:

Kraken Robotics in a great position to help supply NATO navies with their sub sea technology!