JACKSON HEWETT: Anti-drone technology firms rocket in price

If you ever in doubt that politics drives markets, this month’s market action should clear things up.

There have been some screaming trades that would have served you very nicely in June. In a month when the world moved to war footing, defence related companies led the index.

Droneshield

The Australian-based manufacturer of anti-drone technology saw another month of near vertical trajectory, up almost 20 per cent in June to a near record $2.30.

DroneShield uses jamming technology to disrupt attacks, and has more than 1000 systems deployed in the most aggressive theatre of drone warfare, Ukraine.

This month, the company announced a record $61.6 million contract with an unnamed European partner is riding a wave of interest as EU states up their defence spending at the behest of Donald Trump. DroneShield said it was the company’s biggest single order in its history and is larger than the company’s entire revenue for 2024.

The company has been on a tear throughout 2025, up 206 per cent in the year to date. The euphoria is not new however, with the firm hitting a record of $2.34 in July last year before falling back to earth at 63 cents over December and January. In an unstable world, this might be a play keeping an eye on.

Electro Optic

Whereas DroneShield uses frequency jamming tech to disrupt drones, Canberra based Electro Optic Systems has both old and new school techniques to bring them down.

The company has a pickup truck mounted 30mm cannon, with tracking technology but also offers a high powered laser alternative to shoot drones out of the air. EOS is burning up the ASX in June, rising almost 66 per cent to $2.71.

It has doubled in price so far this year. It’s a return to higher valuations after a period in the relative doldrums. The company was trading as high at $6.63 in 2021, before sinking to 47 cents in 2023.

Austal

Another Aussie defence company, Austal joins the ranks of ballistic trades in June, but it might not be that much use to shareholders from here on, with the company being stalked by South Korea’s Hanwha group.

The WA based shipbuilder, with manufacturing facilities in five countries earned $1.5b revenue in 2024 and has a $14b order book that includes 22 ships such as patrol boats for the US Navy and another 11 for the US Coast Guard.

The company recently highlighted to investors a doubling in conflicts around the world in the past decade with a big uptake in both non-state and state-based conflict.

Austal’s shares soared 15 per cent in June to a record $6.13 when Hanwha revealed it had received American blessing to take over the company. Whether the Australian government wants to let it go is a different story. The deal would require FIRB approval.

Lynas

Security, of the economic kind, was another big factor in high growth stocks this month.

While the spike in prices was nowhere near as large as in some of the conflict-driven defence stocks, trade wars have played a part in Lynas’ stellar month.

The rare earths company bolted more than 13 per cent in June to $9.20, capping off a 41 per cent growth in shares, year to date. Investors have Trump to thank for the company’s meteoric rise. His trade war with China has seen them retaliate by threatening to cut off supply of the minerals that make up the high tech products essential for the energy transition, including wind turbines and hybrid and electric vehicles, as well as electronics.

China is by far the world’s dominant producer of rare earths and with the tariff standoff still unresolved, US manufacturers are scrambling for supply. That is particularly necessary if they are to satisfy Trump’s demand for more domestic manufacturing.

“If your objective is to re-shore manufacturing, as indeed the US Government’s objective is, then they must have a secure supply chain of rare earths,” Lynas chief executive Amanda Lacaze saidthis week.

Lynas also has US operations, which keeps it in America’s favour but mindful of trading this stock. While the price is approaching its highs of the past decade, it has seen far loftier heights than this. Back in 2011 when euphoria about demand for action on climate change was at its peak, the company traded at a peak of $25.

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