Menu
Team Veye   January 16, 2026

ASX Defence Stocks in Momentum, Underpinned by Sector Tailwinds

Team Veye   January 16, 2026
Get your Free Report on Top 5 ASX stocks for 2026

Recent contract wins, strategic partnerships and government backed defence programs suggests that structural tailwinds for sector remains firmly intact with momentum continuing to build into 2026.

DroneShield Limited (ASX: DRO)

has delivered a strong flow of military contracts highlighting accelerating demand for the counter drone solutions globally. The company announced a $49.6 million contract on 16 December 2025 for a European military end customer with deliveries and cash receipts expected in Q1 2026. This was followed by an $8.2 million Western military contract announced on 30 December 2025 with delivery expected by late 2025 or early Q1 2026 and payment also due in Q1 2026. Entering 2026, DroneShield reported $97.7 million in locked in revenues providing record visibility at the start of the year and reinforcing confidence in near term earnings.

Electro Optic Systems Holdings Limited (ASX: EOS)

has also continued to scale its global defence footprint. On 23 December 2025, EOS secured a US$22 million (A$33 million) contract to supply Remote Weapon Systems for a major U.S. Army ground combat platform with production scheduled across 2026 and 2027. As a result of multiple contract wins through 2025, the company’s unconditional contract backlog exceeded $400 million compared to $136 million at the end of 2024. In January 2026, the company further strengthened its position in the counter drone market through the acquisition of MARSS expanding its AI-enabled command and control capabilities and moving the business further up the defence value chain.

Austal Limited (ASX: ASB)

remains a key beneficiary of rising naval defence spending. In December 2025, approval was granted for Hanwha to increase its stake in Austal to 19.9% underlining strategic interest in the company’s sovereign shipbuilding capability. The company secured a $135 million contract extension for two additional Evolved Cape class Patrol Boats, lifting total contracted vessels to 14. With an order book exceeding $13 billion, e-cord FY25 results and EBIT guidance of $135 million for FY26, the company enters 2026 with strong operational and earnings visibility.

Overall, recent updates across these companies suggest that defence spending cycles, order momentum and strategic importance remain supportive indicating that the defence rally may still have further room to run.

(Source: Company Announcements)

Get your FREE ASX stock report

Discover our latest ASX share ideas and ongoing insights – so you're not guessing with your money

💬

Get Your Free Report on Top 5 ASX Stocks on WhatsApp

Instant Access. No Credit Card Required.

Receive on WhatsApp

Checkout Our Recommendation for free - 7 days free trial

Start Free Trial
7‑day free trial

ASX Stock Research & Recommendations — 7‑day free trial

Independent, analyst‑driven insights.

  • Stock of the week report
  • Daily Analysis Report
  • No credit card required
General information only. Not financial advice.

Get Your FREE Report

Discover the Top ASX Stocks to Invest In 2026!

Expert Analysis of Top-Performing ASX Stocks

Market Insights and In-Depth Research

Buy, Sell, And Hold Recommendations

Almost There!

Enter your details to download the report

Success!

Preparing your download...

Disclaimer

Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.