10 Worst Performing Defense Stocks So Far in 2025

4. KWESST Micro Systems Inc. (NASDAQ:KWE)

YTD Decline in Share Price: -55.26%

KWESST Micro Systems Inc. (NASDAQ:KWE) is engaged in the development of tactical systems and ammunition for military and security forces. It is among the worst performing stocks in 2025, with its share price plunging by more than 55% this year.

KWESST Micro Systems Inc. (NASDAQ:KWE)’s share price has slumped this year amid pressures to regain compliance with NASDAQ’s listing requirements. In November last year, NASDAQ extended the stock’s listing for another 180 days, giving it until May 12, 2025, to regain compliance with the minimum $1 per share price requirement. As of the close of business on March 26, KWE was trading at $0.313 per share.

On March 18, the company stated that it had filed a notice to convene a special meeting of shareholders on March 31 to seek approval of a resolution to authorize the consolidation of issued and outstanding shares of the company on the basis of 1-for-25 shares. This is a crucial compliance measure as KWESST Micro Systems Inc. (NASDAQ:KWE) faces potential delisting in May.

In the midst of chaos, there was positive news last week for KWESST Micro Systems Inc. (NASDAQ:KWE) as it announced the expansion of its manufacturing facilities into the US through a strategic partnership with Nordon Inc. to commence tooling for the scaled production of components under the ARWEN brand. The two parties will work towards an agreement outlining the terms of a long-term contract manufacturing by June this year.

According to Insider Monkey’s database for Q4 2024, 3 hedge funds held a stake in the company, a meagre improvement from 2 at the end of the third quarter.