Overview
- The five largest U.S. defense contractors are down about 1% on average since the conflict began despite a surge in operational demand.
- The first four days of fighting reportedly cost nearly $11 billion, including roughly $5.7 billion on Patriot and THAAD interceptors.
- Rapid inventory depletion has raised logistical concerns, with reports indicating possible reallocation of air-defense assets from South Korea.
- Major contractors had already climbed about 50% since mid-2024 and several trade near roughly 26 times forward earnings, tempering further gains.
- Spending priorities favor smaller defense-tech firms as budgets grow for AI, drones and space, and a new executive order restricts buybacks and dividends until delivery performance is proven.