Market AnalysisMar 17, 20262 Min
US-Israel’s War On Iran Pushes Defence Stocks To New Highs
Two weeks into the US and Israel’s war on Iran, defence stocks around the world are climbing. Investors are betting that the war will push governments to accelerate weapons purchases and raise military budgets.
Missiles and interceptors, advanced systems are being deployed in combat. This has lifted defence companies across Israel, the US, Europe and Asia.
Israeli defence technology in focus
Israeli defence firms are attracting investor attention as their systems are being tested directly in combat. Elbit Systems has been one of the top performers, with its stock rising more than 30% in early March, as per The Times Of Israel.
The company supplies technology used in Israel’s layered air defence network and has recently deployed directed-energy laser systems designed to intercept drone swarms.
Other companies are ramping up production. Israel Aerospace Industries produces the Arrow-3 interceptor used against long-range missiles, while Rafael Advanced Defense Systems is expanding deliveries of its high-power “Iron Beam” laser platform.
US defence giants gain market value
Shares of major American contractors have surged since the war began on February 28. Lockheed Martin, one of the world’s largest defence contractors, has touched record highs as its missile defence systems, such as THAAD and the Patriot PAC-3 interceptor, are being used to counter Iranian ballistic missiles, as per Al Jazeera.
The United States Department of Defense has reportedly moved to quadruple production targets for certain interceptors to 400 units annually.
Other contractors have also rallied. RTX Corporation has benefited from demand for AMRAAM air-to-air missiles and Patriot radar systems used by the US and allied forces. Northrop Grumman shares jumped after reports that its B-2 stealth bombers were used in precision strikes on Iranian facilities.
Defence stocks climbed on the first trading day after the attacks as well. Northrop Grumman rose 6%, RTX gained 4.7%, while Lockheed Martin added 3.3%, according to Air and Space Forces Magazine.
Data analytics firm Palantir Technologies also rose 5.8%, as per Bloomberg.
European defence companies also advance
In Europe’s defence sector, BAE Systems climbed more than 7% in early March, while Hensoldt and Renk Group also recorded gains.
According to CNBC, Leonardo S.p.A. said it is “positioned on a path of strong growth” as defence firms benefit from geopolitical tensions. Chief executive Roberto Cingolani told investors that warfare was “getting faster and more dangerous,” adding that hybrid threats “increase uncertainty and operational complexity.”
Rheinmetall said it was in a “prime position” to supply the United States with military equipment. CEO Armin Papperger told investors that “over the next 10 years, there is a huge need” for its products.
