The debate over threats to European airspace following repeated drone sightings is driving up the share price of technology firm Frequentis. In recent days, the company’s stock, which is also active in military air traffic control, has risen by about 22 percent to nearly €74. “It can be assumed that Frequentis will benefit from the current developments,” Erste Group analyst Daniel Lion told APA.
Recently, drone sightings—presumably of Russian origin—in Denmark and Norway caused disruptions and temporary shutdowns in air traffic. NATO is therefore considering building a “drone wall” around Europe and its eastern flank. Frequentis, headquartered in Vienna, could play a role, as the company supplies communication and information systems for military air traffic control. For example, it is currently testing a system for detecting unmanned aerial vehicles on behalf of the German Bundeswehr and has already renewed its military radar data network.
Lion said the recent stock surge was most likely triggered by an institutional investor strategically positioning itself. “Many countries will need communication systems to coordinate drone defense. This will bring more orders for Frequentis,” he estimated. He also recalled the violation of Estonian airspace by Russian fighter jets, where it was reported that the exact positions of the aircraft could not be determined. “A lot will have to happen here. For that, you need the appropriate control centers and communication systems.”
Defense Stocks Gaining Favor With Investors
Florian Beckermann, board member of the investor association IVA, sees investors turning more toward defense stocks given the current security situation. “Many funds, including institutional investors, have expanded their investment criteria to allow the purchase of defense stocks. And in Europe, the selection of listed companies focused on defense is limited. That naturally plays into Frequentis’s hands,” Beckermann told APA. He described Frequentis as a “niche player” with a “good success story” that fuels investor interest. The downside, from an investor perspective: “The profits Frequentis makes have so far lagged behind its share price,” Beckermann said.
Frequentis Highlights Role In Sky Shield
In a statement, the company pointed to the European Sky Shield Initiative, which focuses on procuring air defense systems. “For optimal functionality, the individual national systems must be networked with each other. Frequentis can contribute its expertise from building the sensor network for the Bundeswehr in Germany,” CEO Norbert Haslacher was quoted as saying. Frequentis declined to comment on the share price movement.
