New Report Slams Ubiquiti for Products That Keep Showing Up on the Front Lines of the Russia-Ukraine War: What Investors Should Know

Bottom Line Up Front: A newly published investigative report claims Ubiquiti’s (UI) networking equipment is widely used by Russian forces in Ukraine despite U.S. and EU export restrictions. This is leaving investors asking themselves whether or not to take their gains from an already cooling stock and how much stake to put into the short report. 

The Claims: The reporting, published by Hunterbrook, claims that Ubiquiti radio bridge equipment appears extensively across Russian battlefield communications, including in drone operations. According to Hunterbrook, Ukrainian military sources and Russian vendors interviewed for the story say Ubiquiti devices are favored because they are inexpensive, easy to deploy, and difficult to disable remotely. The outlet cites social media posts, Telegram channels, and battlefield imagery that it claims show Ubiquiti-branded equipment mounted at Russian positions.

Hunterbrook also claims that Russian military units or affiliated fundraising groups have publicly thanked vendors for supplying Ubiquiti equipment, and that some of those units have been accused elsewhere of war crimes. It further claims that reporters posing as Russian buyers sourced Ubiquiti equipment from various vendors and distributors, sometimes via third countries such as Turkey or Kazakhstan.

Critically, none of this reporting alleges that Ubiquiti itself knowingly sold equipment directly to the Russian military. Instead, the thesis is that Ubiquiti’s products are reaching Russia through a sprawling global distribution and resale ecosystem, something the company has previously acknowledged it does not fully control.

Barchart attempted to reach Ubiquiti for comment, but did not receive a response. 

What’s Not in Dispute

Several baseline facts matter for context. Ubiquiti products were legally sold in Russia prior to the 2022 invasion of Ukraine. Broad restrictions on exporting U.S. networking equipment to Russia largely took effect after February 2022, meaning legacy inventory and secondary-market circulation were already in place. Ubiquiti relies heavily on third-party distributors, a model common in the networking industry, and once products leave those distributors, resale and gray-market movement become difficult to track.

The report further alleges that resellers are being contacted directly, and they are at least entertaining offers to supply products in Russia. Importantly, Ubiquiti simply supplies the product, and the sales companies may be the ones violating sanctions. But this raises concerns about whether they are turning a blind eye to the process, or whether it’s simply a result of a multi-billion-dollar, relatively decentralized global supply chain that’s difficult to police. 

It is also not unusual for widely available civilian technology (Wi-Fi gear, smartphones, GPUs) to surface in sanctioned countries via smuggling, resale, or parallel imports. This isn’t a defense to the allegations, but rather an explanation of the possibilities. This simply means the presence of a brand on a battlefield does not, by itself, establish intent, coordination, or complicity by the manufacturer. We’ve all seen images of Toyota and Ford trucks in the Middle East, or headlines about China stealing U.S. intellectual property. 

Where the Theory Gets Thinner

Even if some resellers are using methods to circumvent sanctions without their knowledge, Ubiquiti has taken some action to prevent this exact thing from happening. Notably, many report that Ubiquiti restricted firmware updates for Russian users in recent years. This means Russian users with the equipment can no longer update their technology. This won’t stop Russians from finding ways around it, like simply using a VPN, but it’s some action to combat it, regardless. Users familiar with the products have pointed out that Russian access to updates and support appears degraded, not enabled, suggesting that whatever equipment is present may be legacy hardware or moved without the company’s involvement, and they’re taking steps to combat use in the area. 

It’s also not entirely clear at what scale their products are being used. While Hunterbrook shows dozens of photos of devices and claims “tens of thousands” in Russia, those devices retail for about $1,000 each. So, even if tens of thousands of devices have made their way into Russia since 2022, it’s a tiny sliver of their overall revenue. Turning a blind eye to war crimes and sanctions violations won’t help them against fines or penalties, but it’s unlikely to cause a meaningful hit to their top line. 

The Stock's Performance

From a market perspective, Ubiquiti’s rally still appears far more explainable through improving fundamentals than through any single controversial demand source. Similarly, despite the report dropping today, the stock is down less than 1% today, even turning green at one point.  

After being punished through most of 2023, falling from over $292 in January to roughly $105 by November, the company entered 2024 with cleaner inventory, sharply higher margins, and reaccelerating demand across its core Enterprise Technology segment. 

As supply-chain pressures faded, operating leverage kicked in, allowing earnings to grow faster than revenue. That alone is often enough to drive a major re-rating, especially for a company that runs lean, generates strong free cash flow, and avoids aggressive expansion. Importantly for investors weighing recent claims, Ubiquiti does not disclose Russia as a material revenue source in its filings, and revenue growth has been reported across broad regions like North America and EMEA rather than tied to any single country.

Even if Ubiquiti equipment is appearing in Russia via resale or gray markets, there is no evidence in public financials that sales to Russia are large enough to explain a multi-hundred-percent move in the stock. If anything, the timing of the rebound aligns more cleanly with margin normalization, disciplined capital returns, and renewed confidence in the business model. That doesn’t make outside scrutiny irrelevant, but it does suggest the stock’s climb can be explained without assuming a hidden or undisclosed revenue driver. Or, at the very least, its current growth could be explained by other means. 

The report notes that most of Ubiquiti’s sales are conducted through third-party resellers, with little oversight over where they end up. It further highlighted at least one example of a U.S. company allegedly entertaining offers to sell into Russia. So, this could be skewed in that regard. 

But one potentially telling point is that the Russia-Ukraine invasion began in February of 2022. This means that for the first several years of the Ukraine war, the stock was plummeting, and only began to rebound meaningfully within the past 12-24 months. It’s unclear from the photos how many of these products are being used, when they were taken, or if Russia could be a meaningful enough player to move the stock price so substantially. 

Hunterbrook explicitly discloses that it is short $UI and long a basket of peers. That doesn’t invalidate the reporting, but it does matter. Short sellers are incentivized to surface negative information, and while that can serve a valuable market function, it also requires readers to apply a higher standard of skepticism, especially when conclusions extend beyond hard evidence.

The Market Takeaway

For now, this remains a contested narrative rather than an established case. No U.S. or EU authority has announced enforcement action against Ubiquiti related to Russia, and the company has not been formally accused of sanctions violations tied to Ukraine. That being said, Ubiquiti has gotten itself caught up in regulatory issues before, so it’s best to keep a keen eye on the stock. Further, the optics from this aren’t great, and might scare off future business. 

Given its red-hot run over the past couple of years, it could be a good time to de-risk from the name, regardless. It’s already down 30% from its highs, so momentum could be fading. A big regulatory investigation could spark a large sell-off from an already fragile stock, and Wall Street is likely to get to trade on the news first before you get the chance to hit the sell button. 

This article may be updated to reflect additional facts as they are surfaced. For corrections or inquiries, please contact news@barchart.com.