That gain comes after a difficult month, with the defence technology stock still down around 15% over the past four weeks and 36% over the past six months. It's been a painful reversal for investors who piled into the stock during this year's defence rally.

But the recent pullback also changes the investment story. Much of the hype has now faded, leaving investors to focus on the fundamentals rather than momentum.

While DroneShield remains a high-risk investment, its exposure to one of defence's fastest-growing markets could make today's valuation far more attractive than it was just weeks ago.

Why did DroneShield shares fall?

Unlike many sharp sell-offs, there wasn't a single announcement that triggered last month's decline.

Instead, several factors appear to have combined to cool investor enthusiasm. Hopes of a lasting peace agreement in the Middle East may have reduced expectations for future defence spending, particularly in technologies linked to modern conflict.

At the same time, some investors likely questioned whether the stock's rapid rise had already priced in years of future growth. Earlier this year DroneShield shares were trading at a valuation that left little room for disappointment.

The recent correction suggests the market has become more realistic about both the opportunities and the risks.

A fast-growing market

DroneShield isn't trying to compete with the world's largest defence contractors across every military capability. Instead, the company has focused almost entirely on counter-drone technology—a market that has rapidly shifted from a niche defence category to a strategic priority.

Conflicts in Ukraine and the Middle East have highlighted how relatively inexpensive drones can threaten military assets, airports, critical infrastructure and public events. As a result, governments around the world are increasing investment in drone detection and counter-drone systems.

Industry forecasts suggest the global counter-UAS market could exceed US$15 billion annually by the early 2030s, supported by rising defence budgets and growing adoption among both military and civilian customers.

Those structural growth drivers remain firmly in place for DroneShield shares.

A specialist competing with industry giants

DroneShield may be small, but it has successfully carved out a valuable niche. The company competes alongside defence heavyweights including RTX Corp (NYSE: RTX) and Lockheed Martin Corp (NYSE: LMT), all of which have significantly greater financial resources.

Rather than relying on a single product, DroneShield offers an integrated platform combining drone detection, electronic warfare systems, artificial intelligence-powered tracking and command-and-control software.

That specialised approach has helped the company secure an increasing number of contracts across Europe, Latin America and the Asia-Pacific region.

For a business of DroneShield's size, those contract wins demonstrate growing credibility with defence agencies worldwide.

What do analysts think?

Broker opinion remains sharply divided. According to TradingView data, only four analysts currently cover DroneShield shares. Two rate the stock as a strong buy, while the other two recommend selling.

Despite that split, the average 12-month price target sits at $3.41, implying potential upside of around 35% from current levels. The most bullish analyst believes the shares could reach $4.80, representing potential upside of more than 90%. The most pessimistic prediction is 9% below the current share price.

The post DroneShield shares are rebounding. Is this the turning point? appeared first on The Motley Fool Australia.

The ASX defence stock has fallen around 16% over the past week and 29% over the past month. It is now down approximately 26% in 2026, leaving its once-spectacular 12-month gain almost completely erased at just 4%.

That's a painful reversal for investors who piled into the ASX stock during this year's defence rally.

But there's another way to look at it. With much of the hype now gone, the recent pullback arguably makes the risk-reward equation more attractive for long-term investors. While DroneShield remains a higher-risk stock, its position in one of defence's fastest-growing niches continues to make it an intriguing opportunity.

Here are three reasons investors may want to take a closer look at DroneShield shares this July.

1. Specialist in one of defence's fastest-growing markets

DroneShield isn't trying to compete across the entire defence industry.

Instead, it has focused almost exclusively on counter-drone technology. This is a market that has moved from niche to strategic priority in just a few years.

Demand for counter-drone systems has surged as conflicts in Ukraine and the Middle East demonstrated how inexpensive drones can threaten military forces, critical infrastructure, airports, and public events.

Industry researchers estimate the global counter-UAS market could exceed US$15 billion annually by the early 2030s, driven by rising defence budgets and increasing adoption by military and civilian customers alike.

Those are powerful structural tailwinds for DroneShield shares that aren't likely to disappear anytime soon.

2. DroneShield has built a genuine competitive niche

DroneShield is hardly the biggest name in defence. It competes with giants such as RTX Corp (NYSE: RTX), Lockheed Martin Corp (NYSE: LMT), and Thales SA (XPAR: HO), all of which have vastly greater financial resources and decades-long government relationships.

Yet DroneShield has successfully carved out a reputation as an agile counter-drone specialist. Rather than offering a single product, the company provides an integrated suite of technologies, including drone detection, electronic warfare systems, AI-enabled tracking software, and command-and-control platforms.

That breadth has helped it secure an increasing number of contracts with defence agencies and government customers.

Recent wins for DroneShield shares include multi-million-dollar contracts across Europe, Latin America, and Asia-Pacific, as well as ongoing supply agreements with military customers responding to heightened geopolitical tensions.

For a business of DroneShield's size, those contract wins demonstrate growing credibility on the global stage.

3. The valuation looks more reasonable

Earlier this year, DroneShield shares were pricing in almost flawless execution. After the recent sell-off, expectations have become considerably more realistic.

That's not to say the shares are cheap – they still carry meaningful execution risk – but investors are no longer paying peak multiples for the business.

If the company continues converting growing defence demand into larger, more frequent contract wins, today's valuation could prove much more attractive than it appeared just a month ago.

Foolish takeaway

Investing in DroneShield shares is not without risks. Revenue remains lumpy because defence contracts are often awarded irregularly. Procurement decisions can be delayed, larger competitors may invest more heavily in counter-drone technologies, and rapid innovation means the company must continually invest in research and development.

But the long-term investment case remains compelling. Counter-drone technology is becoming an increasingly important part of modern defence. DroneShield has established itself as a recognised specialist in the field, and the recent share price correction has significantly lowered investor expectations.

For investors comfortable with volatility, July could present an opportunity to buy a quality defence growth stock after a sharp reset.

The post 3 reasons to buy DroneShield shares in July appeared first on The Motley Fool Australia.

If you are one of them, or are planning to become one, and are looking for investment ideas, then read on.

Listed below are three super ASX exchange traded funds (ETFs) that could be top picks for an SMSF. Here's what you need to know about them:

VanEck MSCI International Quality ETF (ASX: QUAL)

The first ASX ETF that could be a strong fit for an SMSF is the VanEck MSCI International Quality ETF.

This ETF focuses on high-quality global companies with strong balance sheets, consistent earnings, and high returns on capital. Rather than chasing short-term growth, it targets businesses that have proven their ability to perform across economic cycles.

Holdings include stocks such as Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Visa (NYSE: V). These businesses operate at global scale and benefit from entrenched positions in their respective markets.

For an SMSF, the VanEck MSCI International Quality ETF can work as a core international holding, offering exposure to global leaders while leaning toward financial strength and durability rather than speculation.

It was recently recommended to investors by the fund manager.

Betashares Global Defence ETF (ASX: ARMR)

Another ASX ETF that may appeal to SMSF investors is the Betashares Global Defence ETF.

This fund provides exposure to global defence companies at a time when government spending in this area is increasing. Geopolitical uncertainty, regional conflicts, and heightened focus on national security have led many countries to commit to higher defence budgets over the long term.

Holdings include companies such as Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and RTX Corporation (NYSE: RTX). These businesses often benefit from long-dated government contracts, which can provide revenue visibility.

Overall, the Betashares Global Defence ETF offers exposure to a sector that is less tied to consumer spending and economic cycles, adding diversification to a long-term portfolio.

This fund was recommended by the team at Betashares.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

A final ASX ETF to consider for an SMSF is the Betashares Global Cash Flow Kings ETF.

This fund invests in global companies with strong and consistent free cash flow generation. This focus can be particularly attractive for retirement-focused investors, as cash flow underpins dividends, reinvestment, and balance sheet strength.

Holdings include stocks such as Alphabet (NASDAQ: GOOGL), Costco Wholesale (NASDAQ: COST), and Johnson & Johnson (NYSE: JNJ). These businesses generate significant cash while operating in industries with long-term demand.

The Betashares Global Cash Flow Kings ETF could complement growth-oriented holdings by adding exposure to companies that emphasise financial discipline and sustainable returns. It was also recently recommended by the fund manager.

The post 3 super ASX ETFs to add to your SMSF appeared first on The Motley Fool Australia.

For those with $10,000 to invest and a disdain for stock-picking, exchange-traded funds (ETFs) could be the answer.

They offer instant diversification, access to entire sectors or themes, and the ability to compound returns over time without the stress of picking individual stocks.

But which ASX ETFs could be worth considering? Let's take a look at three that could be worth considering in October:

Betashares Global Defence ETF (ASX: ARMR)

The first ASX ETF to look at is the Betashares Global Defence ETF. It gives investors exposure to some of the world's leading defence, aerospace, and cybersecurity stocks. These businesses are benefiting from rising global defence spending as nations strengthen their capabilities amid ongoing geopolitical tensions.

The fund's holdings include global defence giants such as Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and RTX Corporation (NYSE: RTX). These are all key suppliers of advanced defence systems and technology to the United States and allied nations.

Defence has historically been a resilient sector, often performing well even during periods of market volatility. With governments prioritising security and military modernisation in a more uncertain world, demand for high-end defence solutions is expected to keep growing. It is no wonder then that analysts at Betashares recently recommended the fund.

Betashares S&P/ASX Australian Technology ETF (ASX: ATEC)

Another ASX ETF that could be a good option for the $10,000 is the BetaShares Australian Technology ETF.

This popular fund provides exposure to some of the country's fastest growing and most innovative tech stocks. It includes many of the names driving Australia's digital transformation, such as WiseTech Global Ltd (ASX: WTC), Xero Ltd (ASX: XRO), and NextDC Ltd (ASX: NXT).

WiseTech continues to dominate global logistics software, Xero remains a leader in cloud-based accounting, and NextDC is capitalising on the surging demand for data storage and artificial intelligence.

Overall, by investing in the BetaShares S&P/ASX Australian Technology ETF, you gain exposure to Australian innovators that could deliver outsized returns as digitalisation and automation reshape the economy over the next decade. It was also recently recommended by the team at Betashares.

Betashares Australian Small Companies Select ETF (ASX: SMLL)

Finally, the Betashares Australian Small Companies Select ETF could be a top option.

It tracks the Nasdaq Australia Small Cap Select Index, which screens for small-cap shares with positive earnings, strong debt servicing ability, and solid valuations. This helps avoid the riskier, speculative stocks and instead focuses on quality growth names.

The fund generally holds between 60 and 90 stocks, allowing investors to benefit from the growth potential of Australia's next generation of corporate leaders. It is another fund that Betashares recently picked out as one to consider.

The post Where to invest $10,000 in ASX ETFs right now appeared first on The Motley Fool Australia.

Geopolitical instability is pushing governments around the world to increase their military readiness.

In June, the 32 member nations of NATO committed to raising their defence spending from 2% of GDP to 5% by 2035.

This was directly beneficial to the Betashares Global Defence ETF because it only invests in defence companies headquartered in NATO member or allied nations.

Betashares said defence was one of the 2 best-performing ETF investment themes in the second half of FY25.

What's in the ARMR ETF portfolio?

This thematic ASX exchange-traded fund (ETF) is fairly new, having only been listed in October 2024.

The ARMR ETF tracks the VettaFi Global Defence Leaders Index (before fees).

It gives investors targeted exposure to companies that derive more than 50% of their revenues from the development and manufacturing of military and defence equipment and defence technology.

The ETF currently holds 43 stocks focused on defence, with 84.7% of assets in aerospace and defence companies, 8.2% in software, and 6.5% in research and consulting services.

Its country allocation is led by the United States (59.5%), followed by France (11.5%), Germany (9.3%), Britain (8.8%), and South Korea (3.1%).

Here is a table of the top 10 holdings in the ARMR ETF and what those companies do.

What about income?

In terms of dividends, the ARMR ETF intends to pay one distribution per year.

ARMR ETF paid its maiden dividend of 53.546615 cents per unit this month.

There is a yearly management fee of 0.55%.

The post Here is what you're invested in with ARMR ETF appeared first on The Motley Fool Australia.

This thematic ASX exchange-traded fund (ETF) has gained a lot of attention from investors amid US pressure for other nations to raise defence spending over the past several months.

Overnight, the 32 member nations of NATO committed to raising their defence spending from 2% of GDP to 5% of GDP by 2035.

That's huge.

32 NATO countries commit to ramping up defence spending

To get some understanding of the scale of this increase in defence spending, let's look at Germany.

Before the NATO Summit, the German Government had already proposed to raise its defence spending from 2% to 3.5% of GDP by 2029.

That's the equivalent of almost 400 billion euros (US$464 billion) in extra defence spending by just one nation within NATO.

Secretary-General Mark Rutte says NATO needs "a quantum leap" in defence spending to keep up with China and Russia's build-up.

VanEck caught on to this growing defence spending trend and launched the VanEck Global Defence ETF in September last year.

The DFND ETF provides exposure to global companies manufacturing and distributing military infrastructure, products, and services.

The ETF tracks the MarketVector Global Defence Industry (AUD) Index (before fees), which was launched in August 2024.

And wow, has it shot the lights out. The DFND ETF's unit price has risen by 70% since its inception.

This compares to a 7% lift for the S&P/ASX 200 Index (ASX: XJO) and an 11% rise for the S&P 500 Index (SP: .INX) over the same period.

What are you buying with the DFND ETF?

The ETF currently invests in 29 stocks in developed markets, with US shares accounting for 52.23% of assets.

Next is France (10.57%), Italy (8.41%), South Korea (7.98%), Sweden (6.35%), Israel (4.29%), Singapore (3.88%), the United Kingdom 3.69%), and Germany (2.38%).

The stocks represent some of the world's largest companies involved in aerospace, research, software, and electronic equipment.

Importantly, VanEck says defence companies are "typically under-represented in benchmarks".

That means you shouldn't assume you have exposure to them if you're invested in the major indices.

Here is a table of the top 10 holdings in the DFND ETF and what those companies do.

What about dividends?

In terms of dividends, the DFND ETF intends to pay a distribution annually.

At the time of writing, it has not yet paid a distribution.

There is a yearly management fee of 0.65%.

The post Here are the top stocks in the DFND ETF appeared first on The Motley Fool Australia.

At one stage, the company's shares were up 7.5% to 21.5 cents.

They have pulled back since then but remain up 3.5% to 20.7 cents at the time of writing.

Why are Brainchip shares charging higher?

The company's shares are pushing higher today following news that the company has partnered with Raytheon, a subsidiary of RTX Corp (NYSE: RTX), to support a $1.8 million US Air Force Research Laboratory (AFRL) contract.

The project will focus on neuromorphic radar signal processing — a cutting-edge area that seeks to mimic how the human brain processes information, but with ultra-low power consumption.

According to the release, Raytheon will work alongside Brainchip on a contract titled "Mapping Complex Sensor Signal Processing Algorithms onto Neuromorphic Chips." The focus will be on micro-Doppler signature analysis, a sophisticated form of radar detection capable of enhanced activity discrimination.

The release notes that Brainchip's Akida processor will be at the core of the project, with the company stating that its neuromorphic architecture is well-suited for military and aerospace applications that require processing power in size- and power-constrained environments.

Brainchip's CEO, Sean Hehir, said:

Radar signaling processing will be implemented on ever-smaller mobile platforms, so minimizing system SWaP-C is critical. This improved radar signaling performance per watt for the Air Force Research Laboratory showcases how neuromorphic computing can achieve significant benefits in the most mission-critical use cases.

A word of caution

While today's announcement may sound exciting — and the surge in Brainchip shares suggests some investors are feeling optimistic — it is worth remembering that this is not the first time Brainchip has announced a high-profile partnership or project.

Historically, many of these collaborations have generated lots of interest with investors, but very little in the way of material revenue. This latest deal, while promising on paper, is still early-stage and comes with no guarantee of long-term commercial success.

In fact, the US$1.8 million contract is relatively modest in size, and there is no indication yet that it will lead to recurring income or large-scale deployment of Akida technology.

Foolish takeaway

It is encouraging to see Brainchip land a role alongside Raytheon in a project backed by the US Air Force — and it does highlight the theoretical value of the company's neuromorphic technology in next-generation defence applications.

However, investors should remain cautious. Brainchip shares have a history of volatility, and while this news is a step in the right direction, a long and uncertain road remains before any significant commercial outcome is realised.

As always, when it comes to speculative ASX tech stocks like Brainchip, it's wise to keep expectations in check — and ensure your investment thesis isn't built solely on headlines, dot joining, and speculation..

The post Brainchip shares storm higher on big news appeared first on The Motley Fool Australia.