Xos Inc (NASDAQ: XOS) (FRA: 9KR0) shares rocketed higher on Monday after the company secured a prototype contract with the United States Air Force, sending investors scrambling for a piece of the pie. The stock surged roughly 87 per cent in after-hours trading, briefly touching gains of more than 100 per cent as the news spread.
The deal marks Xos’s formal entry into the defence sector. Under a prototype Other Transaction Agreement (OTA) awarded through the Air Force Global Strike Command Rapid Capabilities Division 2026 Showcase, the firm will adapt its Xos Hub mobile battery energy storage system into a rugged, deployable charging unit for electrified support equipment and vehicles.
An OTA is a flexible contracting method the Department of Defense uses outside traditional procurement rules to speed development of commercial tech. The showcase is a competitive event where commercial firms pitch and demonstrate emerging technologies to Air Force Global Strike Command for potential rapid adoption.
Assembly and integration will take place at the company’s Tennessee facility, with the period of performance running into late 2027. Financial terms remain undisclosed.
Beyond defence, Xos Hub systems already serve a range of commercial needs. The technology powers AI data centres through the recently launched Power Hub series, which delivers megawatt-scale, grid-independent energy in days rather than the years typically required for utility connections. The firm has also recently been deploying zero-emission food trucks in American cities.
In June, the company secured a US$3 million follow-on order from an anonymous autonomous fleet operator covering 12 units for rapid charging expansion across North America and Europe without permanent infrastructure. Other supply agreements link these systems to utilities like Duke Energy Corp (NYSE: DUK), Xcel Energy Inc (NASDAQ: XEL) and the Los Angeles Department of Water and Power, where eight units currently operate.
What sets the firm’s storage systems apart are their mobility, high-capacity output and ability to function independently of the grid. This allows fleets, ports and municipalities to electrify operations quickly.
Read more: NevGold appoints Nevada government affairs veteran Scott Bensing to board
Latest financials and future outlook
XOS reported second quarter revenue of just US$4.7 million on 30 unit deliveries, sharply lower than the US$18.4 million and 135 units a year earlier as the company shifted focus towards powertrains and hubs. First-half revenue fell to US$16 million from US$24.3 million year-over-year.
Gross margins improved substantially to 31.0 per cent in the first half from 11.8 per cent, and operating losses narrowed, but the firm still posted a quarterly net loss of US$6.9 million and ended June with only US$13.2 million in cash after raising additional equity. Management has cut full-year 2026 revenue guidance to between 35 and 43 million USD.
The Air Force prototype may open a promising new market, but its modest size and lack of disclosed value offer limited near-term relief for a company whose cash runway remains tight and whose core vehicle volumes continue to lag. Investors would be wise to weigh the strategic potential against persistent dilution risks and execution challenges in a still-unprofitable business.
Read more: Strategic U.S. antimony resource emerges in NevGold’s Nevada MRE
Follow Rowan Dunne on LinkedIn
rowan@mugglehead.com
