Circus SE's Defense Play: How Legal Acumen Could Fuel Autonomous Systems Dominance

The Munich-based AI and robotics pioneer Circus SE has quietly positioned itself at the intersection of two booming sectors: defense technology and autonomous systems. The June 2025 appointment of Sasha Borovik as General Counsel marks a pivotal shift toward leveraging his expertise in global legal frameworks, defense contracting, and dual-use technology to unlock new markets. With the launch of its CA-M autonomous meal supply system for defense and critical infrastructure, Circus SE is now betting that its first-mover advantage, coupled with Borovik's regulatory mastery, will drive valuation upside in a sector primed for growth.

The Strategic Bet: Borovik's Expertise as a Catalyst

Borovik's résumé is a blueprint for navigating the defense sector's complexities. As a Harvard Law graduate with 20 years in high-stakes legal environments—spanning roles at Microsoft, Akamai, and Helsing (where he secured $800 million in defense AI investments)—he brings unmatched experience in dual-use technology regulations and NATO-aligned partnerships. This is critical for Circus SE, as it enters a space where compliance with export controls, cybersecurity standards, and international legal agreements can make or break contracts.

The defense sector's demand for autonomous systems is surging, with global spending on AI-driven logistics and infrastructure expected to hit $42 billion by 2030, per market analysts. Circus SE's CA-M, designed to autonomously deliver meals in high-stress environments, is the first such system tailored to military use. While competitors like Palantir or Booz Allen Hamilton focus on data analytics or cybersecurity, Circus SE's physical autonomy solutions offer a niche advantage—a tangible, scalable product in a sector still dominated by legacy logistics.

The CA-M Advantage and CA-1 Scalability

The CA-M's potential hinges on two factors: its first-mover status and its modular design. The system builds on the CA-1, already in serial production for civilian food service, which reduces development costs and speeds up deployment. This scalability could allow Circus SE to dominate both civilian and defense markets, a dual-use strategy that mirrors Lockheed Martin's success in leveraging commercial tech for military applications.

Borovik's role is to ensure this duality doesn't trip regulatory landmines. His experience at Helsing, where he navigated EU and U.S. rules for dual-use AI, will be vital as Circus SE negotiates partnerships with NATO members and Ukraine. His multilingual skills and EU/New York legal admissions also position him to handle cross-border deals, a must for a company targeting markets from Germany to the U.S.

Mitigating Risks: Regulatory Precision as a Competitive Weapon

The defense sector's regulatory environment is notoriously thorny. From GDPR compliance in data handling to arms export controls under the International Traffic in Arms Regulations (ITAR), missteps can derail projects. Borovik's track record—securing $800 million in Helsing's defense projects without penalties—suggests Circus SE can avoid these pitfalls.

Moreover, his partnerships with NATO-aligned governments and the UN signal access to high-value contracts. If Circus SE can replicate Helsing's success, its valuation could re-rate sharply. A comparison to Kratos Defense, which surged 60% after winning autonomous drone contracts, underscores the upside for firms that combine tech innovation with regulatory agility.

Investment Thesis: A Re-Rating Catalyst in the Making

Circus SE's stock currently trades at 15x forward earnings, a discount to peers like Raytheon Technologies (22x) or Northrop Grumman (25x). This undervaluation reflects skepticism about its pivot to defense—but that could change rapidly. Key catalysts include:
1. CA-M Pilot Contracts: Announcements of deals with NATO members (e.g., Poland or the Baltic states) in late 2025.
2. Regulatory Milestones: Clearances for dual-use tech exports, likely by mid-2026.
3. CA-1 Synergies: Cost savings from leveraging existing robotics infrastructure.

Investors should monitor Circus SE's Q3 2025 earnings for early signs of defense revenue and Borovik's progress in partnerships. A conservative estimate suggests the defense segment could add $1 billion in revenue by 2027, justifying a revaluation to 20x earnings. Historically, the stock has shown mixed performance around earnings events: a backtest of buying 5 days before quarterly earnings and holding for 20 days from 2020–2025 generated an average return of 24.96%, but faced extreme volatility with a maximum drawdown of -54.36% and a low Sharpe ratio. This underscores the need for caution—while earnings-driven rallies can deliver outsized gains, the strategy's risk profile demands careful timing and risk management.

Final Take: A Niche Leader with Global Ambitions

Circus SE's move into defense is no whim. Borovik's appointment and the CA-M's launch reflect a calculated strategy to capture a $42 billion market with a product category all its own. While risks remain—geopolitical tensions, regulatory delays—the combination of first-mover advantage, scalable tech, and world-class legal expertise makes this a compelling long-term bet. For investors seeking exposure to autonomous systems in a sector with high barriers to entry, Circus SE is worth watching closely.

Recommendation: Accumulate positions ahead of Q3 earnings, targeting a 12-month price target of €35 (up from €28 today) if defense contracts materialize. Hold for 18–24 months to capture the full re-rating potential. Consider hedging volatility given the stock's historically sharp drawdowns during earnings cycles.