Issue #87

The lithium market is shifting. We break down two companies securing the U.S. supply chain with record revenue and breakthrough silicon technology.

The lithium-ion revolution is moving past the era of "someday" and into the era of specialized, high-performance execution. While the headlines often obsess over the fluctuating price of raw lithium carbonate, the real value is being captured by the companies perfecting the chemistry and the cells that make next-generation mobility possible.

As the world moves from basic electrification to mission-critical power—where weight, safety, and domestic production are the only metrics that matter—two distinct leaders are emerging: one reinventing the battery’s brain through silicon chemistry, and the other securing the supply chain’s backbone through domestic manufacturing.

This is where the energy conversation shifts from speculative mining to high-tech industrialization—and where the most resilient players are carving out their moats.

👉 One company is shattering energy density limits with silicon nanowire technology, becoming the go-to power source for the aerospace and defense sectors.

👉 The other is transforming from a niche RV power provider into a domestic manufacturing powerhouse, using a patented "dry electrode" process to bring battery production back to U.S. soil.

👉 Both are scaling rapidly, aggressively expanding their gross margins, and positioning themselves as indispensable to the "Made in America" energy transition.

In this edition, we break down the silicon innovator and the domestic manufacturer powering the next leap in energy storage—and why these two stocks are foundational to the future of high-performance electrification.

Amprius Technologies (NYSE: AMPX)

Amprius Technologies (NYSE: AMPX) is a pioneer in the next-generation lithium-ion battery sector, specializing in ultra-high energy density silicon anode technology. Unlike conventional lithium-ion batteries that use graphite anodes, Amprius utilizes a proprietary silicon nanowire platform that allows for significantly higher energy storage and faster charging. This technical edge has positioned the company as a critical supplier for "high-stress" applications, particularly in the aerospace, defense, and high-performance drone (UAS) sectors.

Business Model and Revenue Streams 📦

Amprius operates a "fab-lite" business model designed to balance in-house innovation with scalable mass production. The company develops its core IP and high-end specialized cells at its headquarters in Fremont, California, while leveraging strategic contract manufacturing partnerships to handle large-scale commercial volume. Its revenue is primarily generated through:

• Product Sales (Specialized Batteries): This is the core engine. Amprius sells its high-density SiMaxx™ and SiCore® batteries to industries where weight and power are non-negotiable. Roughly 75% of its revenue currently comes from the aviation and drone segments, including high-altitude pseudo-satellites (HAPS).
• Customization and R&D Services: The company earns fees for providing tailored battery solutions for specific military or commercial hardware, moving customers through a "qualification" pipeline that leads to long-term supply agreements.

Macroeconomic and Policy Impact:

Amprius is uniquely positioned to benefit from the current U.S. "Energy Dominance" agenda. Recent shifts in 2026 have seen a tightening of the National Defense Authorization Act (NDAA) requirements, which mandate domestic or "allied-sourced" battery components for defense applications by 2028. This policy acts as a massive tailwind for Amprius, as it has recently secured U.S.-based manufacturing partners to ensure its batteries are "NDAA compliant." While global trade tensions and supply chain volatility remain a risk—especially since a significant portion of its current revenue is international—the company's pivot toward domestic production shields it from potential tariffs on foreign-made energy storage.

Recent Performance and Corporate Developments 📈

Amprius has demonstrated a "hypergrowth" trajectory over the last several quarters, characterized by record-breaking revenue and a narrowing path to profitability.

Q3 2025 Financial Highlights: 💰

• Total Revenue: The company reported $21.43 million, a staggering 173% increase year-over-year. This significantly beat the analyst consensus of $16.45 million.
• Gross Margin Expansion: In a major milestone for a growth-stage tech firm, Amprius reported its second consecutive quarter of positive gross margin, which expanded to 15% (up from 9% in Q2 2025).
• Backlog Growth: The company ended the period with a $53.3 million backlog, an 83% increase from the prior quarter, fueled by a massive $35 million follow-on order from a leading drone manufacturer.

Strategic Initiatives and News: 🤝

• Manufacturing Expansion (Feb 2026): On February 3, 2026, Amprius announced a landmark partnership with a U.S.-based manufacturing partner to scale domestic production. This move is designed to reach over 2 GWh of capacity.
• CES 2026 Recognition: The company received a CES Innovation Award in January 2026 for its Silicon Anode Platform, specifically for its integration into Nokia’s drone networks.
• Capital Position: Amprius recently terminated its At-The-Market (ATM) equity program after successfully raising approximately $97.5 million, leaving the company with a healthy cash balance of $91.9 million as of year-end 2025 and zero debt.

Profitability and Fair Value 🎯

While Amprius is not yet profitable on a bottom-line GAAP basis, the "burn rate" is shrinking rapidly. Management has indicated that they are nearing an EBITDA breakeven point, noting that an additional $10 million in quarterly revenue (bringing total revenue to roughly $31 million/quarter) would likely turn the company's adjusted EBITDA positive.

Is the price fair?

The stock has seen massive volatility, trading between $1.70 and $16.00 over the past year.

• Undervalued Perspective: Some Discounted Cash Flow (DCF) models suggest an intrinsic value near $48.00 based on the long-term adoption of silicon anodes in the EV market.
• Overvalued Perspective: From a conservative Price-to-Sales (P/S) standpoint, it trades at a premium compared to traditional battery manufacturers, reflecting its "tech-first" status rather than a commodity manufacturer.

Recent insider selling in early 2026 by the CEO and CTO caused a temporary price dip, which some analysts view as a "natural consolidation" after a 255% one-year surge, potentially offering a better entry point for new investors.

Analyst Estimates and Ratings 📊

• Consensus Rating: The stock maintains a "Strong Buy" consensus. In the last 30 days, it has remained a favorite among analysts covering the lithium and energy storage space.
• Price Targets: The average 12-month price target is approximately $16.57, representing significant upside from recent trading levels in the $9.50–$10.50 range. Aggressive targets from firms like Needham and Northland sit as high as $20.00.
• Recent Momentum: Seven out of eight analysts currently rate the stock as a "Buy" or "Strong Buy," citing the company’s technical lead and its transition from R&D to mass-market domestic manufacturing.

Investor-Focused Takeaway: Is AMPX Right for Your Portfolio?

Amprius is a high-beta, high-reward play on the future of energy density. It is no longer just a "science project"; it is a commercial-stage company with a rapidly growing backlog and a clear path to EBITDA positivity.

What to Watch in the Near Term:

1. Domestic Production Ramp: Look for updates on the new U.S. manufacturing facility; successful execution here is key to meeting defense contract requirements.
2. EBITDA Breakeven: Monitor the next two quarterly reports. If revenue crosses the $30M mark, the shift to positive EBITDA could be a major catalyst for institutional buying.
3. EV Market Entry: While aviation is the current bread and butter, any formal partnership with a major Electric Vehicle (EV) OEM for their next-gen SiCore cells would likely re-rate the stock's valuation.

Recommendation:

AMPX is best suited for growth-oriented investors who can stomach high volatility. Its technical superiority in energy density provides a "moat" that few lithium competitors can currently match.

Dragonfly Energy Holdings (NASDAQ: DFLI)

Dragonfly Energy Holdings Corp. (NASDAQ: DFLI) is a leading manufacturer of deep-cycle lithium-ion batteries and a pioneer in energy storage technology. Best known for its consumer-facing brand, Battle Born Batteries®, the company has successfully transitioned from a niche provider for the RV and marine markets into a diversified industrial energy player. Dragonfly is currently at the forefront of "domesticating" the battery supply chain through its patented dry electrode manufacturing process, which aims to produce solid-state cells right here in the U.S.

Business Model and Revenue Streams 📦

Dragonfly’s business model is a blend of high-volume retail and specialized industrial integration. The company has evolved from simply selling battery packs to providing complete, integrated energy systems. Its revenue flows through two primary channels:

• OEM (Original Equipment Manufacturer) Sales: This is the company’s fastest-growing segment. Dragonfly partners with major manufacturers in the RV, marine, and trucking industries (such as THOR Industries and Airstream) to integrate lithium power as a standard feature in new vehicles. In Q3 2025, OEM sales jumped 44% year-over-year.
• DTC (Direct-to-Consumer): Sold under the Battle Born Batteries brand, these products target the aftermarket for van-lifers, boaters, and off-grid enthusiasts. While this segment provides higher margins, it is more sensitive to consumer discretionary spending.

Macroeconomic and Policy Impact:

The macro environment in 2026 presents a "push-pull" dynamic for Dragonfly. On one hand, stubbornly high interest rates have created a "freight recession" and slowed the RV market’s post-pandemic recovery. On the other hand, U.S. energy policy—specifically the push for domestic manufacturing—has provided a safety net. Dragonfly recently received a $300,000 grant from the Nevada Tech Hub, highlighting its role in the national strategy to reduce reliance on Chinese battery components. Additionally, over 30 states now have anti-idling laws for heavy-duty trucks, which has accelerated the demand for Dragonfly’s lithium-based idle-reduction systems in the trucking sector.

Recent Performance and Corporate Developments 📈

The last six months have been a period of "balance sheet repair" and technical maneuvering for Dragonfly. After a difficult 2024, the company successfully executed a massive turnaround strategy.

Recent Financial Highlights: 💰

• Q3 2025 Results: Dragonfly reported net sales of $16.0 million, a 26% increase year-over-year. Most importantly, gross margins expanded by 710 basis points to nearly 30%, a sign that the company is getting much more efficient at manufacturing.
• Q4 2025 Guidance: The company projected Q4 sales of approximately $13 million. While this is a sequential drop due to winter seasonality in the RV industry, it still represents 7% year-over-year growth.
• Capital Restructuring: In late 2025, the company completed a transformative debt restructuring. It raised $90 million in equity, paid down $45 million in debt, and converted another $25 million into equity. This reduced their total debt principal to a manageable $19 million.

Strategic Initiatives and Mergers: 🤝

There have been no recent mergers, but the company completed a 1-for-10 reverse stock split in December 2025. This was a technical move to maintain Nasdaq compliance and attract institutional investors. On the product front, Dragonfly expanded its ecosystem in January 2026 by launching its own line of Battle Born Solar Panels, allowing it to sell complete "sun-to-battery" energy solutions. It also won the 2026 SEAL Business Sustainability Award in February for its breakthrough trucking power solutions.

Profitability and Fair Value 🎯

Dragonfly is not yet bottom-line profitable, but it is "playing offense" for the first time as a public company. The net loss for Q3 2025 was $11.1 million, but the Adjusted EBITDA improved significantly to negative $2.1 million (compared to negative $5.5 million the year prior).

Is the price fair?

Following the reverse split, the stock has been searching for a floor. With a market cap of approximately $27 million, the company is trading at a Price-to-Sales (P/S) ratio of roughly 0.5x. This is exceptionally low for a technology company with 25%+ revenue growth, suggesting the market may be discounting the stock due to past dilution and the cyclical nature of the RV industry. Many analysts consider the stock significantly undervalued, with some "Fair Value" estimates sitting near $18.00—though this assumes successful execution of their solid-state battery pilot.

Analyst Estimates and Ratings 📊

• Consensus Rating: Dragonfly holds a "Strong Buy" consensus among the small group of analysts who cover it.
• Price Targets: The average 12-month price target is approximately $18.75. Even the most conservative estimates from firms like Canaccord Genuity suggest a potential upside of over 500% from current trading levels (post-split).
• Recent Ratings: Within the last 30 days, analysts have maintained their "Buy" ratings, citing the improved liquidity and the company’s new partnerships in the railway and trucking sectors (notably with Werner Enterprises).

Investor-Focused Takeaway: Is DFLI Right for Your Portfolio?

Dragonfly is a "turnaround play." The company has survived a brutal period of high debt and a cooling RV market and has emerged with a clean balance sheet and a diversified product line.

What to Watch in the Near Term: 📈

1. Trucking Adoption: The trucking market is much larger than the RV market. Watch for more large-scale fleet deployments like the one with Werner Enterprises.
2. Solid-State Progress: Any updates on the commercial viability of their "dry electrode" solid-state cells could act as a massive catalyst.
3. March 2026 Earnings: The upcoming Q4 2025/Year-End report (expected late March) will be the first full look at the company's financial health post-debt restructuring.

Recommendation:

Dragonfly (DFLI) is a high-risk, high-potential investment. For investors who believe in the domestic battery manufacturing story and the "electrification of everything," current levels offer a deep-value entry point, provided they can handle the volatility of a small-cap stock.

Final Take: The Silicon Anode and the Domestic Backbone Powering Electrification

The energy transition isn't just about raw lithium prices anymore—it’s about the engineering that turns that lithium into high-performance power. That requires two things:

Chemistry that breaks density limits and a domestic supply chain that ensures energy security. That’s where Amprius Technologies (AMPX) and Dragonfly Energy (DFLI) stand apart.

🔋 Amprius Technologies (AMPX) — The Silicon Frontier of Aviation

• Technical Lead: Proprietary silicon nanowire technology offering the world’s highest energy density.
• Massive Growth: 173% YoY revenue surge with a rapidly expanding $53M+ backlog.
• Strategic Moat: Transitioning to high-volume U.S. manufacturing to meet strict NDAA defense requirements.
• ➤ Best for: Investors seeking a high-upside, "deep tech" play on the electrification of aerospace, drones, and high-performance defense sectors.

⚙️ Dragonfly Energy (DFLI) — The Domestic Infrastructure Engine

• Market Resilience: Successfully restructured debt and modernized its balance sheet for a 2026 growth phase.
• Vertical Integration: Moving beyond RVs into trucking and industrial markets with patented "dry electrode" solid-state goals.
• Revenue Quality: Improving gross margins (near 30%) and expanding into "sun-to-battery" solar ecosystems.
• ➤ Best for: Value-focused investors looking for a de-risked turnaround play positioned at the heart of the American-made battery supply chain.

Investor Insight

🧩 Want elite battery chemistry with massive aerospace tailwinds? → AMPX

🏗️ Want a domestic manufacturing turnaround with deep industrial reach? → DFLI

Bottom Line:

The next phase of the lithium economy won't be driven by the miners, but by the innovators who master the cell.

Amprius owns the high-performance chemistry of the future, while Dragonfly is building the domestic infrastructure to deliver it at scale.

As the "Made in America" energy mandate intensifies, AMPX and DFLI aren't just battery companies—they are the foundational blocks of a self-reliant energy future.

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Happy Trading
​— Team Premium Stock Alerts