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If ever there were a sector enjoying both a cyclical uplift and a structural re-rating, it’s defence - and increasingly, its Siamese twin, energy security. Argonaut analyst Pia Donovan’s latest sector note (31 March 2026) paints a picture of a world where geopolitics is doing the heavy lifting for order books, with Australian contractors positioned squarely in the slipstream.

At the heart of the thesis is the uncomfortable reality that war - specifically the escalating US-Israel-Iran conflict - has become a powerful economic catalyst. In just four days, some 5,200 munitions were deployed, a statistic that reads less like a battlefield update and more like a procurement forecast. The Pentagon’s mooted US$200 billion supplemental funding request (up from an earlier US$50 billion estimate) underscores how quickly inventories are depleted and replenishment cycles accelerate.

And if that weren’t enough, the Trump administration’s proposed US$1.5 trillion defence budget for FY27 signals a step-change in baseline spending. For Australian investors, the key takeaway is not just the magnitude, but the spillover: allies are being nudged - if not shoved - towards lifting their own defence outlays.

Australia: from reluctant spender to strategic participant

Australia, currently allocating around 2% of GDP to defence, is under increasing pressure to move towards 3.5%. Donovan notes that even the government’s projected rise to 2.33% by 2033 may fall short of expectations, particularly as NATO members target 5% by 2035.

Domestically, the spending trajectory is already formidable. Defence funding is expected to climb from A$59 billion this year to around A$100 billion annually by 2034, with nearly A$350 billion earmarked for capabilities over the decade.

But it’s not just the quantum - it’s the composition. Submarines, shipbuilding, and northern base infrastructure dominate the agenda. The Henderson Defence Precinct alone could absorb A$25 billion over time, while upgrades at HMAS Stirling and Osborne will underpin Australia’s AUKUS ambitions.

For contractors, this is less a pipeline and more a firehose.

Fuel security: the sleeper theme

If defence spending is the headline act, fuel security is the subplot rapidly stealing the show.

The closure of the Strait of Hormuz has exposed Australia’s reliance on imported fuel, prompting renewed urgency around domestic storage. Pre-war estimates of A$3.7-4.8 billion in fuel infrastructure investment now look conservative.

Argonaut highlights Saunders (SND) and Duratec (DUR) as key beneficiaries, given their exposure to fuel storage construction and maintenance. The logic is compelling: building new tanks is slow and capital-intensive, whereas refurbishing existing infrastructure offers a quicker fix - playing directly into Duratec’s wheelhouse.

There’s also a policy kicker. With criticism mounting over low fuel reserves, governments may mandate higher domestic storage levels or redirect supply domestically. Either way, more steel in the ground is required.

Energy crossover: margins meet momentum

The report makes a persuasive case that defence contractors with energy exposure are enjoying a double tailwind.

Duratec’s energy segment, for instance, delivered nearly 77% revenue growth between FY24 and FY25, with margins approaching 30%. Civmec (CVL) is also seeing strong momentum, forecasting FY26 energy revenue of A$110.8 million at a healthy 13.5% EBIT margin.

Even Bhagwan Marine (BWN), not traditionally pigeonholed as an energy play, derives more than half its revenue from oil and gas-linked activity following its Riverside Marine acquisition. Decommissioning - often overlooked - is emerging as a lucrative niche.

In short, energy exposure is no longer a side hustle; it’s a margin enhancer.

Company positioning: ships, steel and services

Among the coverage names, Austal (ASB) stands out for its leverage to US defence spending, with over 70% of revenue tied to its American operations. Expansion at its Mobile shipyard positions it well for major naval programs, while domestically it remains a cornerstone of Australia’s shipbuilding strategy.

Civmec and Duratec earn “key pick” status, thanks to their dual exposure to defence and energy, as well as strong pipelines of contract opportunities. Saunders offers leverage to fuel infrastructure, albeit with execution risks around meeting EBITDA guidance.

Bhagwan Marine, meanwhile, boasts the highest total shareholder return potential (82%), driven by offshore services and decommissioning upside.

Risks: the usual suspects, with a twist

No defence bull case would be complete without caveats. Argonaut flags the perennial risks: delays in government spending, labour shortages, and the possibility of work being insourced by Defence as capabilities grow.

Labour, in particular, looms large. With Defence targeting 69,000 personnel by the early 2030s, competition for skilled workers could constrain project delivery.

Still, there’s a counterbalance. A tight labour market may actually reinforce collaboration between government and industry, ensuring contractors remain integral to execution.

Valuation: steady as she goes

Despite the upbeat outlook, valuation changes are modest. Austal’s price target dips slightly to A$6.60 due to higher capex, while Civmec, Duratec, Saunders and Bhagwan Marine remain unchanged. All retain BUY ratings - a rare display of unanimity.

The underlying message is clear: the story hasn’t changed, but the conviction remains intact.

Final word

Argonaut’s report reads like a sector caught in the crosshairs of global instability - and benefiting accordingly. Defence spending is rising not by choice but by necessity, while fuel security has emerged as an equally pressing concern.

For ASX-listed contractors, this convergence creates a rare alignment of macro tailwinds. Ships need building, tanks need filling, and infrastructure needs upgrading. It’s not quite a golden age - but it’s certainly a busy one.

Amplia Therapeutics has handed investors something small biotechs rarely manage without a raised eyebrow from the market - a data update that looks better after independent review rather than worse. The company says a formal centralised assessment of its ACCENT pancreatic cancer study has lifted the tally of complete responses to five patients, taking the complete response rate to 7.8% across 64 patients treated with 400mg of narmafotinib in combination with gemcitabine and Abraxane. Median overall survival has also come in at 11.1 months, which management says is about two months better than chemotherapy alone, while tolerability remains broadly in line with standard treatment.

For investors, the headline is not merely that the numbers improved. It is that the improvement came from an independent central read using RECIST 1.1 criteria, the standard yardstick for measuring tumour response. That matters because centrally reviewed oncology data generally carry more weight than site investigator assessments. In plain English, the company is now leaning on a tougher referee - and still walking away with a stronger scorecard.

Why complete responses matter so much in pancreatic cancer

Pancreatic cancer is one of oncology’s graveyards for optimism, so complete responses are not just nice-to-have statistics. They are rare enough to make seasoned investors put down their coffee. Amplia compares its 7.8% complete response rate with 0.2% in the historical MPACT trial and 0.3% in the more recent NAPOLI 3 study for gemcitabine and Abraxane alone. Its objective response rate was updated to 35.9%, versus 23% in MPACT and 36.2% in NAPOLI 3.

The complete response figure is particularly eye-catching because it suggests narmafotinib may be doing something more meaningful than simply nudging tumours backwards a touch. A confirmed complete response means scans showed the disappearance of measurable tumours and metastases for at least two months without new lesions appearing. In this disease setting, that is about as close as one gets to a clinical showstopper without breaking out the confetti cannon.

That said, investors should keep both feet on the floor. ACCENT is a Phase 1b/2a, single-arm study, so the comparisons are against historical trials rather than a head-to-head control arm. Cross-trial comparisons can be informative, but they are never perfect because patient populations, trial design and treatment settings can differ. Even so, when a small study starts producing outcomes that sit comfortably beside, or even above, established benchmarks, the market tends to take notice.

Survival data add substance, not just sparkle

The 11.1-month median overall survival figure gives the update more ballast. Amplia notes this exceeds the 8.5 months reported in MPACT for gemcitabine-Abraxane and matches the 11.1 months achieved by NALIRIFOX in NAPOLI 3, the regimen that went on to win US FDA approval. That does not mean narmafotinib is destined for the same regulatory path, but it does place the result in commercially relevant company.

Just as importantly, the company says narmafotinib continues to be well tolerated, with an adverse event profile similar to chemotherapy alone. In oncology, efficacy gets the market excited, but tolerability is what keeps development programmes alive. A drug that adds survival without piling on toxicity has a much better chance of finding a place in the treatment landscape.

The next valuation trigger is credibility with outsiders

Amplia has also been selected to present the trial data at the annual meeting of the American Association of Cancer Research in April. For investors, that is not just a diary note. External presentation at a respected cancer meeting is one of the ways a small biotech moves from telling its own story to having that story interrogated by clinicians, researchers and potential partners.

Chief executive Dr Chris Burns has described the latest results as demonstrating significant clinical benefit and said the complete response rate offers new hope for first-line pancreatic cancer patients. Corporate language always deserves a pinch of salt, but the underlying message is clear enough: Amplia believes narmafotinib now has data strong enough to justify broader scientific scrutiny and, potentially, commercial interest.

What investors should watch from here

The obvious question is whether these results can be converted into the sort of evidence regulators and larger pharmaceutical groups want to see. ACCENT is ongoing, with four patients still on study as of mid-March and one nearing 24 months on trial. More mature data could further strengthen the narrative, but the real prize is a later-stage study that confirms the benefit in a controlled setting.

For now, Amplia has improved the quality of its evidence, not just the gloss on the presentation slides. In a sector where many companies promise the moon and deliver a blurry snapshot, that is a meaningful distinction. The updated ACCENT data do not remove development risk, and pancreatic cancer remains a brutal proving ground. But they do suggest narmafotinib is edging from interesting to genuinely consequential - and that is usually when investors start paying closer attention.

Cleo Diagnostics has taken a meaningful step towards commercialising its pre-surgical ovarian cancer test, expanding its biomarker panel from five to eight markers as it lines up for analytical validation and, ultimately, an FDA 510(k) submission in the US. For investors, this is not just a bit of lab tinkering. It goes to a central issue for any diagnostics hopeful - can the science be turned into a repeatable, manufacturable product that regulators and laboratories will trust?

The company says the broader panel is designed to improve analytical robustness, inter-assay reproducibility and manufacturability. In plain English, Cleo is trying to reduce the chance that test performance varies from batch to batch or from one run to another. That matters because a diagnostic can look very clever in development, but if it proves temperamental when scaled up, the commercial story can come unstuck very quickly.

The expanded panel still rests on Cleo’s patented CXCL10 biomarker, which remains the core of its proprietary approach. What has changed is that management is now leaning on a wider mix of biomarkers to reduce dependence on any single analyte. That should make the assay more resilient, particularly in early manufacturing, where variability can be a nasty and expensive surprise.

The Ella platform is doing some heavy lifting

A key part of the update is the company’s use of the Ella immunoassay platform, which Cleo says allows simultaneous measurement of multiple biomarkers from a single sample through its microfluidic cartridge design. The practical attraction is obvious: Cleo can increase the number of biomarkers without bogging down workflow, chewing through more sample, or creating a cumbersome process for laboratories.

That is worth dwelling on because diagnostics investors have seen plenty of companies boast about sensitivity and specificity, only for the real-world lab workflow to become the Achilles heel. A test that fits neatly into existing diagnostic practice has a better chance of adoption than one that asks labs to reinvent the wheel. Cleo is clearly trying to present its assay as scalable and lab-friendly, not merely scientifically interesting.

This also speaks to the company’s broader ambition. Cleo is not developing a boutique one-off test for a narrow research setting. It wants a blood test that can be deployed globally in standard diagnostic laboratories. The company says the platform has been backed by more than 15 years of research and development at the Hudson Institute of Medical Research, with two clinical studies involving more than 500 patients. It also holds a worldwide exclusive licence to commercialise the underlying intellectual property.

Manufacturing alignment matters more than it sounds

Investors tend to focus on clinical data and regulatory milestones, but manufacturing can be where timelines quietly slip. Cleo says it has aligned the revised biomarker panel with a preferred manufacturing partner experienced in developing and producing assays for the selected biomarkers. A binding manufacturing agreement is said to be imminent, with production of validation lots expected to begin immediately after execution.

That may sound procedural, but it is important. Diagnostics are not software. You cannot simply press update and hope for the best. Reagents, assay consistency, batch control and production quality are central to regulatory approval and commercial rollout. Having a partner already familiar with the biomarker set should lower execution risk at a stage where many small medtech companies are still trying to stitch together the supply chain.

Chief executive Richard Allman framed the move as a transition from research to a commercial-ready kit, saying the expanded panel improves robustness and reproducibility under real-world conditions while maintaining strong clinical performance. He also pointed to the manufacturing alignment as positioning Cleo to begin analytical validation shortly, the next major step towards its planned FDA filing and US market entry.

What investors should watch next

The immediate prize is not revenue, but de-risking. Cleo has now signalled three things the market will want confirmed over coming months: finalisation of the manufacturing agreement, commencement of analytical validation lot production, and progress towards the FDA 510(k) submission. Each milestone chips away at the gap between a promising concept and a saleable product.

The bigger strategic appeal remains compelling. Ovarian cancer is notoriously difficult to detect early, and Cleo argues that an accurate blood test capable of distinguishing benign from malignant growths could address a significant clinical need. The company’s modular strategy also suggests it is thinking beyond the initial surgical triage use case, with longer-term aspirations across recurrence monitoring, high-risk testing and early-stage screening.

Still, the usual caveat applies. Regulatory pathways, manufacturing scale-up and commercial adoption all carry risk, especially for an early-stage diagnostics company. But for now, Cleo’s latest move looks like sensible plumbing rather than flashy science - and in medtech, the plumbing often decides whether the house ever gets built.

dorsaVi has taken another step in its pivot toward advanced semiconductor technology, beginning device-level testing of resistive random access memory (RRAM) chips as part of its roadmap to a 22-nanometre neuromorphic computing platform. The move places the small-cap ASX company squarely within one of the technology sector’s hottest themes: the growing strain on conventional memory architectures as artificial intelligence workloads explode.

The company recently received its initial RRAM test silicon and has commenced early-stage characterisation work at the 180 nm node. This phase focuses on evaluating device performance, material interfaces and how the technology behaves under manufacturing conditions.

While still at an exploratory stage, the testing represents the first step in a staged pathway aimed at scaling the technology down to a more advanced 22 nm node - a process expected to unlock greater memory density, faster access speeds and lower power consumption.

The “memory wall” becomes an industry problem

The strategic rationale behind the work lies in a growing bottleneck facing AI infrastructure.

As machine learning workloads expand, modern processors increasingly spend more time waiting for data than performing calculations. Industry observers often refer to this limitation as the “memory wall” - where computing power advances faster than the systems that feed it with data.

Conventional computing architectures rely on constant transfers between processors and external memory. These data movements consume energy and introduce latency, creating efficiency constraints that grow more pronounced as workloads scale.

Some estimates suggest that moving data between processors and memory can account for as much as 70–90 per cent of the energy consumed by certain AI systems.

The result is rising demand for new architectures capable of bringing computation closer to the data itself. In-memory computing and neuromorphic systems, where memory elements also participate in processing tasks, are emerging as potential solutions.

For investors, the theme is already visible in the share price performance of major global memory manufacturers. Companies such as SanDisk, SK Hynix and Micron have seen substantial market capitalisation growth over the past year as demand for AI-related memory infrastructure surges.

What RRAM could enable

dorsaVi’s approach centres on RRAM, an emerging non-volatile memory technology capable of storing data while also enabling computation within memory arrays.

Unlike traditional architectures where memory and processing are separate, RRAM can potentially allow both functions to occur within the same structure. In neuromorphic designs, arrays of memory cells can act as artificial synapses, enabling efficient machine learning operations.

The company’s roadmap envisions RRAM acting as the foundation for a new class of ultra-efficient AI hardware aimed at “ultra-edge” environments such as robotics, drones and autonomous systems.

These devices often operate under strict constraints: limited power supply, restricted cooling capacity and the need for real-time decision making without reliance on cloud connectivity.

According to the company’s technology plan, the transition from a 40 nm node to a 22 nm process could deliver improvements including lower write voltages, faster write speeds and more efficient compute-in-memory operation.

Targets include write voltages below 2.0 volts, improved reliability at high temperatures and compute-in-memory array efficiency exceeding 20 tera operations per second per watt.

Such performance gains would be particularly relevant for battery-powered systems or embedded AI applications where energy efficiency is paramount.

Neuromorphic ambitions

The RRAM development program is closely linked to dorsaVi’s broader neuromorphic computing strategy.

Neuromorphic hardware attempts to mimic the structure of biological neural systems, using dense networks of artificial synapses and neurons to perform tasks such as pattern recognition and sensory processing more efficiently than traditional processors.

In this framework, RRAM can serve as the non-volatile memory fabric that stores neural network weights while also enabling analog-style computation.

This architecture potentially allows ultra-edge devices to process sensor inputs and run AI models locally rather than sending data back to remote servers.

For applications such as autonomous robotics, wearable medical systems or industrial monitoring, the ability to make decisions instantly and locally could provide meaningful advantages.

Still early days

Despite the technological promise, investors should recognise that the program remains in its early stages.

The current phase involves device characterisation and optimisation following receipt of the first RRAM test wafer, with insights from this work expected to inform further development and scaling.

Commercial deployment - if it occurs - would require additional validation, manufacturing development and integration into larger computing architectures.

Nevertheless, the company argues the initiative aligns with structural trends shaping the semiconductor industry.

Chief executive Mathew Regan said accelerating AI infrastructure is putting increasing pressure on power efficiency and memory utilisation across computing systems.

“The rapid expansion of AI infrastructure is placing increasing pressure on power efficiency and memory utilisation across the computing stack,” Regan said.

While much current investment remains focused on large data-centre hardware, Regan believes the next phase of AI growth will increasingly occur in distributed devices operating at the edge.

“Our RRAM-based in-memory and neuromorphic computing platform is being developed to reduce data movement and enable ultra-low-power, low-latency intelligence where efficiency is critical.”

The investor takeaway

For dorsaVi, the RRAM program represents an attempt to reposition the company within a rapidly evolving semiconductor landscape.

The shift toward AI-enabled edge devices, combined with tightening memory supply chains, could create opportunities for alternative memory technologies capable of delivering higher performance per watt.

Whether the company can translate early-stage development into commercially viable silicon remains to be seen.

But in a world increasingly constrained by the memory demands of artificial intelligence, even small players exploring new architectures may find themselves operating in a sector where technological breakthroughs carry outsized potential.

EVE Health Group has secured $904,000 from sophisticated and professional investors, giving the small-cap life sciences group extra fuel to push ahead with its pharmaceutical reformulation strategy. The placement was struck at 2 cents a share, with subscribers also receiving two free-attaching unlisted options for every new share, exercisable at 4 cents and expiring in two years. Red Leaf Securities acted as lead manager and bookrunner.

For investors, the structure matters almost as much as the headline amount. The company will issue 45.2 million new shares under the placement, and, subject to shareholder approval, 90.4 million attaching options. There is also a proposed 5 million options package for the lead manager and potential director participation of up to 500,000 shares, also requiring approval. That means the immediate cash injection is under $1 million, but the option package creates the prospect of further capital if exercised, while also increasing potential dilution down the track.

The strategy - improve old drugs rather than invent new ones

EVE is not trying to discover a brand-new molecule from scratch. Instead, it is pursuing reformulated versions of established pharmaceutical compounds using its own delivery and solubilisation technologies. The commercial pitch is straightforward enough: take medicines with known safety profiles, improve how they are delivered, aim for better bioavailability, faster onset and easier patient use, then wrap that in fresh intellectual property.

That is a very different risk profile from classic biotech drug discovery. Reformulation still carries regulatory, technical and commercial hurdles, but it can reduce some of the early scientific uncertainty because the active ingredients are already well known. EVE’s focus is on medicines approaching patent expiry, where a better delivery format could create a differentiated product attractive to larger pharmaceutical partners with established manufacturing, regulatory and distribution muscle.

Big market ambition, small company balance sheet

Management says the therapeutic markets currently being targeted exceed US$30 billion a year. That sounds suitably ambitious, although investors should remember that an addressable market is not the same thing as a reachable market. Small companies often cite very large end markets, but the real question is whether they can carve out a niche product with enough clinical utility and commercial appeal to interest a licensing partner.

Even so, EVE’s chosen targets are not obscure. The company is working in sexual health and cardiovascular treatments, both large categories where improved delivery and patient convenience can make a genuine difference. Its broader portfolio also includes Dyspro, a cannabinoid-based pastille for dysmenorrhoea and endometriosis, and Libbo, an oral dissolving film for erectile dysfunction. Those programs suggest EVE is trying to build a pipeline around consumer-friendly, differentiated delivery formats rather than compete head-on with big pharma on conventional terms.

Where the money goes

The new funds are earmarked for three main jobs: advancing reformulated drug candidates, progressing the underlying delivery and solubilisation technologies, and supporting intellectual property and regulatory work. That last item is especially important. In reformulation plays, value often hinges on whether the company can secure defensible IP around the formulation, delivery mechanism or use case. Without that, the commercial moat can look rather skinny.

Chief operating officer Ben Rohr said the raising strengthens EVE’s ability to advance its reformulation strategy across several large global pharmaceutical markets, with the company focused on improving the delivery and usability of established medicines approaching patent expiry. He added that the funding would also support IP protection and further development while EVE continues to explore licensing and partnership opportunities with established pharmaceutical companies.

What investors should watch next

The capital raising buys EVE time, but it does not remove the need for tangible progress. For investors, the next milestones are likely to centre on formulation development, IP advancement, regulatory planning and, crucially, any validation from external parties. A partnership, licensing deal or credible development collaboration would carry far more weight than broad statements about market size.

There is also the capital question. A raise of $904,000 is useful, but it is not war chest territory. Unless option exercises bring in additional funds, EVE may need to return to market if development timelines stretch or if it decides to accelerate multiple programs at once. That is not unusual for an emerging life sciences company, but it is part of the equation.

For now, EVE has given investors a clearer view of what it wants to be: not a moonshot biotech, but a reformulation specialist trying to improve established medicines and monetise them through partnerships. It is a sensible strategy on paper and potentially capital-efficient by sector standards. The challenge, as ever, is proving that the science, the IP and the commercial model can line up neatly enough to turn a promising concept into something bigger than a well-crafted pitch.