Why Dassault Aviation's (ENXTPA:AM) Strategic AI Investment and Raised Sales Guidance Signal a High-Conviction Buy Opportunity

Dassault Aviation (ENXTPA:AM) has emerged as a compelling investment opportunity, driven by a dual narrative of robust near-term revenue execution and forward-looking strategic innovation. The company's recent decision to raise its 2025 sales guidance to over €7 billion, coupled with a landmark $200 million investment in Harmattan AI, underscores its ability to balance immediate operational success with long-term technological leadership. For investors, this combination of disciplined execution and visionary R&D positioning creates a rare high-conviction case in the aerospace and defense sector.

Revenue Execution: A Foundation of Strong Delivery and Backlog Momentum

Dassault's 2025 sales guidance increase-from €6.5 billion to €7 billion-reflects exceptional performance in both its defense and civil aviation segments. According to a report by Longbridge, the company delivered 26 Rafale fighter jets in 2025, exceeding its 2024 target of 25 units, with 15 aircraft allocated for export and 11 for domestic French defense needs. This outperformance, combined with 37 Falcon business jet deliveries (up from 31 in 2024), has solidified its revenue trajectory.

The strength of Dassault's business model is further reinforced by its record backlog. As of December 31, 2025, the company reported 220 undelivered Rafale jets (175 for export, 45 for France) and 73 Falcon aircraft pending delivery. This backlog, valued at €43.2 billion, provides a clear runway for sustained revenue growth, particularly as geopolitical tensions and modernization programs drive demand for advanced defense systems. With full annual results scheduled for March 4, 2026, investors can anticipate further validation of this momentum.

Strategic AI Investment: Future-Proofing Defense Dominance

While Dassault's near-term financials are impressive, its strategic investment in Harmattan AI positions the company to dominate the next frontier of combat aviation. In a $200 million Series B funding round, Dassault led the investment in the French defense tech startup at a $1.4 billion valuation. This partnership, as detailed in , focuses on integrating controlled autonomy and AI into platforms like the Rafale F5 and Unmanned Combat Air System (UCAS), with operational deployment targeted by 2030.

The collaboration aligns with France's national strategy to secure sovereignty in defense technology, a critical priority in an era of geopolitical uncertainty. By embedding AI-driven autonomy into its systems, Dassault is not only enhancing the operational capabilities of its aircraft but also future-proofing its competitive edge. For instance, AI-enabled drone interception and electronic warfare platforms-key areas of development under this partnership-address emerging threats and align with global trends toward autonomous systems in modern warfare.

Linking Innovation to Revenue: A Path to Long-Term Growth

Though the financial impact of Dassault's AI investments may not materialize until the late 2020s, the company's strategic foresight is already paying dividends. The integration of Harmattan AI's technologies into next-generation platforms like the Rafale F5 and UCAS ensures that Dassault remains at the forefront of defense innovation, a critical factor in securing long-term contracts. As noted in a Yahoo Finance analysis, Dassault's ambition to achieve €10.6 billion in revenue by 2028 hinges on its ability to convert its technological leadership into market capture.

Moreover, the investment mitigates risks associated with supply chain disruptions and geopolitical volatility by prioritizing sovereign AI capabilities. This approach not only strengthens Dassault's resilience but also aligns with European rearmament trends, particularly in light of the Ukraine conflict's emphasis on advanced technology in warfare.

Risks and Mitigants

Critics may question the immediate financial returns from Dassault's AI investment, as the benefits are long-term. However, the company's strong backlog and current delivery performance provide a buffer against short-term uncertainties. Additionally, Dassault's focus on scalable AI solutions- such as expanding into new operational theaters and industrializing drone interception systems-ensures that the partnership's value proposition extends beyond niche applications.

Conclusion: A High-Conviction Buy for Growth and Resilience

Dassault Aviation's raised sales guidance and strategic AI investment collectively present a compelling case for investors. The company's ability to execute on near-term revenue targets, combined with its visionary approach to integrating AI into future combat systems, positions it as a leader in the evolving defense landscape. For those seeking exposure to a business that balances operational excellence with transformative innovation, Dassault offers a rare and high-conviction opportunity.