Small Cap Investing

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WOLF
@WOLF_FinancialMar 12, 2026

The Spaces explored how current geopolitical turmoil and rapid AI advances are reshaping small-cap investing, with a heavy focus on defense, drones, and hardware. Taj hosted a panel including Rhett (Story Trading), William, Ryan, Crispy, and Nat, who outlined macro positioning and specific ideas. Rhett relayed Story Trading’s buy-the-dip stance on large caps after the Iran-related shock and highlighted AIR and ASTS as top picks. William argued AI will compress SaaS margins and favored hardware (sensors/robotics), citing Aeva and Robinhood. Ryan detailed a rotation into industrials/small caps, keeping cash to “snipe” tech drawdowns and named various niche plays. Crispy and Nat shared concentrated small-cap portfolios across drones, space, and autonomy (e.g., ONDS, RKLB, ACHR, GRAB), and noted headline-driven surges like LASR’s laser-based anti-drone news. The session pivoted to a sponsored Q&A with Lauren Elkayam, CEO of Mobilicom (MOB), who described their software-defined radios and cyber/EW protection for Group 1–2 drones, high-margin recurring software, U.S. certification advantages, and a path to cash-flow positivity at ~$3M/quarter within 3–4 quarters, aided by programs of record and war-driven demand.

Small-cap markets Space: comprehensive notes and takeaways

Participants and roles

  • Taj (host; Wolf Crew/Small Cap Trading) – moderated macro-to-micro discussion and the CEO segment.
  • Rhett (Story Trading) – macro read, trade posture, and small-cap picks (relayed founder Ben’s geopolitical read).
  • William – focused on AI’s impact on software, rotation to hardware/robotics; several equity ideas.
  • Crispy – small-cap specialist (defense/drones/space); structured portfolio approach and holdings.
  • Nat – energy, autonomy/robotics, early‑narrative small caps, and positioning.
  • Ryan – software operator and active investor; macro rotation framework and a basket of niche ideas (equities/crypto).
  • Oren Elkayam (CEO, Mobilicom; ticker: MOB) – sponsored Q&A on drones/counter‑UAS communications and cybersecurity.

Macro backdrop and positioning

  • Geopolitics and weekend conflict: Panel framed the latest Middle East escalation as a near‑term market headwind but also a catalyst for defense, energy, and counter‑UAS names.
    • Rhett relayed Story Trading founder Ben’s perspective (Ben is from Iran): opening Iran‑U.S. trade long‑term would be a major U.S. economic tailwind. Near term, he expected dips to be bought and positioned long major tech indices (QQQ) into a green close on the NASDAQ.
  • Risk rotations and capex cycle:
    • Ryan rotated out of crowded big-tech in late 2023 into industrials/materials/defense (XLI, XLB, IWM) ahead of a 2025 big‑tech capex wave. He’s now trimming defense to raise cash and “sniper” entries into tech drawdowns later this year/next.
    • Housing tailwind thesis: With rate cuts ahead, Ryan expects mortgage market thaw and liquidity improvement; positioning includes NAIL (3x homebuilders) and Rocket Mortgage (RKT).
  • AI and software repricing:
    • William highlighted accelerating disruption: rapid AI prototyping (e.g., a Duolingo‑like clone narrative) pressuring SaaS multiples. Expects continued washouts in pure software; favors hardware, robotics, rare metals, and sensor stacks supporting autonomy.
  • Energy and hedges:
    • Nat noted three weeks of Friday strength in OXY/XLE preceding the conflict; held OXY, XLE, and VIX into the event and saw strong opens as markets priced risk.

Thematic opportunities and risks

  • Defense/drones/counter‑UAS:
    • Ongoing conflicts are accelerating adoption of ISR drones, loitering munitions, and anti‑drone systems. Panel repeatedly cited drones, lasers, and EW/cyber as key vectors.
    • Names to watch mentioned by the group include AVAV (drones), LASR (laser/counter‑drone optics; spiked on a viral “Star Wars‑like” counter‑UAS video, then pulled back), ONDS (Ondas), ASTS (satellite‑to‑cell), ASTI (Ascent Solar), RKLB (Rocket Lab), and LPTH (LightPath).
  • Autonomy hardware stack (sensors/compute):
    • William is constructive on LiDAR and sensing as autonomy scales; cited Aeva (AEVA), with Nvidia using its LiDAR hardware in certain applications.
  • Semiconductor test for AI:
    • Rhett spotlighted Aehr Test Systems (AEHR) on a fresh analyst upgrade and larger 2030 AI burn‑in TAM estimates; Story Trading maintains a long‑term $50–$200 target range and expects a near‑term push toward $50.
  • Homebuilding and rate sensitivity:
    • With falling rates, homebuilders/materials cyclicals (NAIL) and RKT could benefit as the housing market unfreezes.
  • Crypto/data/power infrastructure (speculative):
    • Ryan emphasized power storage as a gating factor for AI/data centers; discussed names around energy storage and edge compute. He warned on a recent blow‑up (EOSE referenced) and contrasted another “TE Energy” idea (noted by Crispy as having pivoted to solar‑cell production in Austin).
    • William flagged a crypto/data play: “375 AI” with a token he referred to as EAT (launched Oct) and an exclusive billboard‑network partnership (he said “Outlier Media,” context suggests a major U.S. billboard operator) to deploy edge camera devices on billboards for traffic/vehicle data monetization; high‑risk, micro‑cap token exposure.

Specific positions and theses by speaker

  • Rhett (Story Trading)
    • Indices: Went long QQQ early, expecting dip‑buying and a green NASDAQ close.
    • AEHR: Upgrade to $50–$70 fair value (cited William Blair) on AI burn‑in TAM; Story Trading’s long‑term target range $50–$200; expects first target ($50) soon.
    • AST SpaceMobile (ASTS): Signed a direct‑to‑device agreement with Orange (310M customers across markets); earnings after the close. Expects long‑term value from accumulating telco partnerships.
    • LASR: Put on radar after a viral laser counter‑drone video; noted an intraday spike to ~70 and pullback; watching for continued headline‑driven action.
  • William
    • Macro stance: Software faces AI‑driven disruption; favors hardware/robotics/raw materials.
    • Robinhood (HOOD): Sees it as undervalued given monetization breadth (including prediction/markets rev ramps) and its gatekeeper role to retail markets.
    • Aeva (AEVA): Bullish on LiDAR provider tied into Nvidia use cases; sees strong revenue trajectory and appealing technicals for an early‑cycle autonomy bet.
    • Crypto/data: Highlighted the “375 AI” token idea (EAT; billboard edge‑data aggregation) as a tiny, speculative play tied to AI’s demand for data and energy.
  • Crispy
    • Process: Portfolio segmented into “littles/middles/biggles” to concentrate DD on highest‑conviction names; primarily small caps in defense/drones/space/deep tech.
    • High‑conviction (“biggles”) holdings: LightPath (LPTH), Unusual Machines (UMAC), Ondas (ONDS), Ascent Solar (ASTI), AST SpaceMobile (ASTS), and Rocket Lab (RKLB). Notes a long hold since spring/summer last year; RKLB is a top performer; ONDS remains high‑conviction with room to run.
    • On AEVA: Previously traded successfully but missed later legs; acknowledges mixed feelings.
  • Nat
    • Energy/vol hedges: OXY, XLE, VIX ahead of the conflict (observed late‑Friday bid for weeks).
    • Autonomy/air mobility: Archer Aviation (ACHR) with United partnership; still early/high risk but meaningful upside if execution continues; earnings after hours.
    • Asia super‑app: Grab (GRAB) – cited acquisition of a Chinese autonomous company; sees early‑build phase with upside if integration/roadmap land.
    • Factor approach: Enter before narratives go mainstream (did this with ONDS); similar lens for robotics/autonomy over next 2–3 years.
    • Under Armour (UAA): Flagged steady accumulation by a “Canadian Warren Buffett”–type investor; cited strong results/guidance and significant call gains; sees further upside.
  • Ryan
    • Rotation/tactics: Trimmed defense to cash; sniper entries into broken momentum tech later this year. Core small‑cap exposure via IWM since mid‑2023 reclaim.
    • Defense/tech trade ideas: Watching sharp selloffs for entries (e.g., AVAV after a double‑downgrade; also referenced “Mbis” as a buy‑the‑dip candidate).
    • Housing: NAIL and RKT to play a 2026 “Main Street” policy tilt and falling rates.
    • Energy/data center/power: Emphasized energy storage as critical to AI buildouts; mentioned cautionary EOSE episode; discussed “TE Energy” (Crispy noted it pivoted to solar cell production in Austin) as another angle; also cited OSS (One Stop Systems) for HPC hardware.
    • Crypto/other:
      • “Pur” (Hyperliquid strategies) – a crypto strategy token he entered on a big dip; multi‑year 3–5x potential, in his view.
      • BTG (described as a Bitcoin+gold quasi‑ETF) – chart setup mentioned for dual exposure.
      • ORKT (Orange Cloud Technologies) – speculative chatter on a reverse merger with VeVe (NFT IP ties to DC/Marvel/Disney). Short‑term trade framing; watch liquidity and risk.

Sponsored CEO Q&A: Mobilicom (MOB) – Oren Elkayam

  • What the company does
    • Mobilicom provides the core communications, cybersecurity, and EW‑protection stack (hardware, software, and cyber) for drones and robotics: secure software‑defined radio (SDR) datalinks, EW detection/mitigation, and on‑board edge compute/AI for autonomy and cyber defense.
    • Targeting Group 1–2 drones (handheld to backpack size), the highest‑volume cohorts with short replacement cycles; business model mixes 50–60% GM on proprietary hardware with ~90% GM on software/cyber, enabling recurring license revenue.
  • War‑time lessons and demand trajectory
    • Conflicts underscore drones as the most used modern weapons system across ISR, strikes (including loitering munitions), and anti‑drone missions. Expect deployment of “hives/swarms” at borders/frontlines and an operational shift to “robots forward, soldiers back.”
    • Frequency and scale are increasing quarter by quarter; budget urgency in the U.S. is accelerating programs to close capability gaps and onshore supply.
  • Technology differentiation
    • SDR comms hardened with cyber protection for contested EW environments (jamming/interception/takeover) and rapid, automated threat response (millisecond‑level detection/mitigation) to preserve missions.
    • EW Protection Suite plus application‑layer cybersecurity (“RF cyber” and software cyber) addresses both link‑layer and on‑board compute threats.
    • Edge autonomy/AI stack on the vehicle to maintain operations in degraded environments and enable semi/fully autonomous and swarm behavior.
  • BVLOS, regulation, and commercial expansion
    • New U.S. rules extend defense‑grade requirements (Blue UAS alignment, non‑PRC supply, certified cybersecurity) to commercial sectors (delivery, utilities, agriculture). Mobilicom is already certified and U.S.‑compliant, positioning it among a very short list of eligible communications vendors.
    • Competitors often rely on Wi‑Fi links that are not cyber‑secure or robust; he referenced Motorola’s $4.4B acquisition of Silvus as a comp for SDR value, asserting Mobilicom offers similar SDR capabilities at ~30% of the cost while preserving margins.
  • GPS‑denied operations
    • Recognizes the three‑tier threat stack: (1) GNSS jamming/spoofing, (2) RF EW (jamming/interception/takeover), and (3) deeper cyber intrusions.
    • Mobilicom partners for PNT alternatives but operationally deprioritizes GPS reliance, emphasizing visual navigation/INS and autonomy. Core focus is robust comms/EW mitigation and end‑to‑end cyber resilience.
  • Validation and programs
    • Combat‑proven in Israel and Ukraine; validated by U.S. Armed Forces through competitive testing and selection into significant programs of record.
  • Financials and path to profitability
    • Cash‑flow breakeven at roughly $12M annual revenue (~$3M/quarter). Expects to reach within 3–4 quarters (year‑end timing) as U.S. Tier‑1 programs ramp to mass production.
    • Balance sheet: >$18M cash at year‑end with an additional ~$14M available via warrants (> $30M fully diluted access). No debt, no converts, no credit lines. FY burn ~ $3.5M. Mix shift toward software/cyber should lift margins as scale builds.
  • Outlook
    • Wars act as catalysts that accelerate budgets and deployments. Anticipates a shift from one‑off deployments to fleets/hundreds, expanding TAM by 10–20x. Key execution focus is scaling efficiently to meet demand.

Notable takeaways and watchlist

  • Near‑term catalysts
    • AEHR – Analyst upgrade, growing AI burn‑in TAM; community targets $50 first, long‑term $50–$200.
    • ASTS – Orange partnership update; earnings after the close.
    • LASR – Counter‑drone laser headlines; high volatility; monitor for follow‑through.
    • AVAV – Post‑downgrade price discovery; potential fair‑value re‑entry.
    • ACHR – Earnings; progress on air‑taxi certification/partnerships.
    • UAA – Momentum after earnings/guidance; noted value buyer accumulation.
    • ONDS, LPTH, ASTI, RKLB – Ongoing defense/space execution; high‑beta to conflict/launch cadence.
    • OSS – HPC edge systems; levered to AI/data center demand.
    • NAIL, RKT – Housing levered to rates; watch macro prints and rate path.
  • Strategic themes
    • Defense drones and counter‑UAS (EW/cyber/laser interception) are moving from niche to mission‑critical.
    • Autonomy sensor stacks (LiDAR, radar, optics), test/burn‑in equipment, and industrial capex are favored over crowded software narratives.
    • Power and data scarcity are the bottlenecks for AI; storage and edge‑compute strategies warrant attention.

Cautions and disclosures

  • This Space included a sponsored segment (Mobilicom CEO Q&A). All views are those of the speakers. None of this is investment advice; do your own research.
  • Several items are speculative/unverified or highly volatile (e.g., reverse‑merger chatter around VeVe, micro‑cap crypto tokens, and select energy/storage names). Position sizing and risk controls are essential, especially in small caps and crypto.