US Defense Stocks Hit All-Time Highs Amid Iran War
Get the Geopolitics newsletter
Daily geopolitics — wars, elections, sanctions, the diplomatic moves that move markets. Free.
- Lockheed Martin, RTX, Northrop Grumman and other top US defense CEOs met with Trump at the White House on Friday and agreed to "quadruple production" of what Trump called "exquisite class" weaponry, with all companies sitting on order backlogs dwarfing the GDPs of several nations.
- Defense stocks reached all-time highs last week, with Northrop Grumman up 5%, RTX up 4.5%, and Lockheed Martin up 3%, as the US — already the world's largest military spender at nearly $1 trillion in 2025 — pushes toward Trump's $1.5 trillion target by 2027.
- Operation Epic Fury has drawn on more than 20 distinct weapons systems including Tomahawk missiles fired from Arleigh Burke-class destroyers, newly-deployed Precision Strike Missiles (PrSM) from M-142 HIMARS, Patriot and THAAD interceptors, B-2 stealth bombers dropping 2,000lb bombs, and $35,000 LUCAS one-way attack drones from SpektreWorks.
- Israel's three top defense contractors — Elbit Systems ($6.3bn defense revenue in 2024), state-owned Israel Aerospace Industries ($5.2bn), and state-owned Rafael ($4.7bn), maker of the Iron Dome — are riding a surge in arms exports driven by Middle East conflicts.
- Global defense spending jumped 9.4% in 2024 to $2.7 trillion, and NATO members have pledged to increase annual defense budgets from 2% to 5% of GDP by 2035, adding hundreds of billions in new annual spending for contractors.
- RTX has seen the biggest stock price rise over the longer term, up 110% from March 2023 to March 2026, followed by Northrop Grumman (60%), General Dynamics (57%), Lockheed Martin (37%) and Boeing (5%).
Why it matters: Defense contractors are converting active US combat operations in Iran into multi-year revenue pipelines, with the industry's biggest firms agreeing to quadruple output while their stocks have already priced in the windfall. The financialization of the war is visible in concrete numbers: NATO's planned budget doubling to 5% of GDP by 2035 and a 9.4% global spending jump in 2024 create a guaranteed customer base for Lockheed, RTX, and Northrop Grumman that extends well beyond the current conflict.
Ask SkimNews
