Defense Stocks Surge as US Pledges to Quadruple Production of Advanced Weaponry Amid Iran Conflict

The shares of defense companies have reached all-time highs due to the necessity of producing billions of dollars worth of weapon systems.

Following a meeting at the White House, the largest defense companies in the United States have agreed to quadruple the production of weapons that President Donald Trump described as top-tier weaponry.

The meeting on Friday included the CEOs of RTX, Lockheed Martin, Boeing, Northrop Grumman, BAE Systems, L3Harris Missile Solutions, and Honeywell Aerospace. All these companies have billions of dollars in unfulfilled orders, some of which exceed the Gross Domestic Product (GDP) of several nations.

The US is already the world's largest military spender, budgeting nearly $1 trillion in 2025, which is more than the combined spending of the next nine countries. Trump aims to increase this amount to $1.5 trillion by 2027.

The US has already spent billions of dollars on weaponry in the war with Iran, making the conflict a highly profitable business for defense contractors.

Last week, the share prices of major US arms manufacturers increased, including Northrop Grumman (up 5%), RTX (up 4.5%), and Lockheed Martin (up 3%).

So, which weapons are being used in the Iran war, and which defense contractors are profiting from this rapidly escalating conflict?

• Which weapons is the US using against Iran?

According to the US military's Central Command (CENTCOM), Operation Epic Fury has utilized over 20 different weapon systems across air, sea, land, and missile defense forces.

• Missiles, Munitions, and Missile Systems

The Tomahawk missile has been the Pentagon's preferred long-range strike weapon for three decades. These missiles travel at subsonic speeds and fly at low altitudes close to the ground to evade radar detection. They have been launched from Arleigh Burke-class destroyers stationed in the Arabian Sea, where each destroyer can carry over 90 Tomahawks.

The US has also, for the first time, fired Precision Strike Missiles (PrSM) against Iranian targets from the M-142 HIMARS system located in the desert area. This short-range ballistic missile is capable of striking targets up to 400 kilometers away.

On the defensive side, Patriot missile batteries and Terminal High Altitude Area Defense (THAAD) systems have been deployed to counter Iran's retaliatory attacks. The Patriot controls short-range cruise missiles and low-altitude threats, while THAAD intercepts ballistic missiles at high altitudes during their final descent phase.

• Drones

The attack on Iran also saw the debut of the Low-Cost Unmanned Combat Attack System (LOCUS), a one-way attack (suicide) drone manufactured by SpecterWorks and modeled after Iran's Shahed drone. Costing $35,000 per unit, LOCUS represents a deliberate shift towards cheaper and more expendable weaponry.

This is much cheaper than the MQ-9 Reaper drone, which has also been deployed and costs up to $40 million per aircraft to manufacture. Iran's Islamic Revolutionary Guard Corps claimed to have shot down a Reaper drone on March 1.

• Strike Platforms

The US is utilizing B-1 bombers, B-2 stealth bombers, F-15 fighter jets, F-22 Raptor jets, and F-35 Lightning II stealth fighters to strike Iranian ballistic missile facilities and underground bunkers, employing 900-kilogram bombs to destroy Tehran's stockpiles.

• Intelligence, Surveillance, and Reconnaissance (ISR)

According to local news sources, EA-18G Growler electronic warfare jets were spotted on the USS Abraham Lincoln aircraft carrier in the Arabian Sea. These aircraft are used to jam enemy radar, communication, and missile guidance systems. P-8A Poseidon aircraft, used for maritime and land surveillance and reconnaissance, have also been deployed and detected flying around the Strait of Hormuz based on flight path data.

Last month, the US Air Force also deployed E-3 Sentry AWACS radar aircraft in the Middle East, which provide real-time battlefield information. US Air Force RC-135 reconnaissance aircraft, such as the Cobra Ball and Rivet Joint variants, are also flying intelligence-gathering missions from bases in Qatar and the United Arab Emirates, monitoring Iranian missile launches, radar systems, and communications.

• Naval Assets

The USS Abraham Lincoln and USS Gerald R. Ford aircraft carriers have reinforced the US naval presence in the Arabian Sea and the Mediterranean Sea, respectively, while a fleet of Arleigh Burke-class guided-missile destroyers provides both offensive firepower and missile defense through their Aegis systems.

Who Makes the Weapons Being Used Against Iran?

• Boeing manufactures the B-1 bomber, F-15, EA-18G Growler, P-8A Poseidon, and the RC-135 with modifications by L3Harris Technologies.
• Northrop Grumman builds the B-2 stealth bombers and provides radar technology for the E-3 Sentry AWACS.
• Lockheed Martin manufactures the F-35 Lightning II stealth fighter, F-22 Raptor jet, THAAD system, M142 HIMARS, MGM-140 ATACMS missile, and PrSM.
• RTX Corporation's Raytheon division manufactures the Tomahawk missile and MIM-104 Patriot missile systems.
• SpecterWorks produces the LOCUS one-way attack drones.
• General Atomics Aeronautical produces the MQ-9 Reaper drones.
• Huntington Ingalls Industries built the USS Abraham Lincoln and USS Gerald R. Ford.

• Who are the world's largest military companies?

According to the Stockholm International Peace Research Institute (SIPRI), the top 100 defense companies worldwide generated over $679 billion in revenue in 2024.

US companies dominate, accounting for almost half ($334 billion) of the revenue, followed by China ($88 billion), the UK ($52 billion), Russia ($31 billion), and France ($26 billion).

Major European companies, such as the UK's BAE Systems, Italy's Leonardo, the trans-European Airbus, France's Thales, and Germany's Rheinmetall, are all within the top 20 companies, many of whom have benefited due to the Russia-Ukraine conflict.

(The table below details the top arms-producing companies worldwide.)

• Who are the largest defense contractors in the US?

According to the SIPRI report, 39 US contractors are on the list of the top 100 defense companies, significantly outpacing China's eight groups. China is the country with the second-highest number of contractors in the top 100.

The top five defense companies in the US are as follows:

1. Lockheed Martin: The world's largest defense contractor was formed from the merger of Lockheed and Martin Marietta in 1995. In 2024, it generated $68.4 billion in revenue. It contracts with the US government to build aircraft like the F-35, missiles, and space systems. The value of its contracts with the Department of Defense is in the tens of billions of dollars. This year, the company contracted with the US government to accelerate the production of the PAC-3 Missile Segment Enhancement for air defense missiles.

2. RTX: This was formed in 2020 following the merger between Raytheon and United Technologies. The three main business segments focus on producing missile systems, jet engines, and avionics for the US military and commercial airlines. In 2024, $43.6 billion of the company's revenue came from the defense sector.

3. Northrop Grumman: This contractor company was formed in 1994 after Northrop acquired Grumman. The company generates revenue from building stealth aircraft like the B-21 Raider, space systems, and nuclear modernization programs for the US Air Force and government. In 2024, $37.9 billion of its revenue came from defense.

4. General Dynamics: It develops nuclear submarines, combat tanks, armored vehicles, and Gulfstream business jets. In 2024, $33.6 billion of its revenue came from the defense sector.

5. The Boeing Company: This aircraft manufacturer was established in 1916. Much of its revenue comes from the production of commercial aircraft, defense programs, and space systems such as its F/A-18E/F Super Hornet, AH-64 Apache and Chinook helicopters, and P-8 Poseidon. In 2024, $30.6 billion of its revenue came from defense.

• Who are the largest defense contractors in Israel?

According to the SIPRI report, three Israeli contractors are on its list of the top 100 defense companies. With its leadership in highly advanced military technology, the Israeli defense industry is experiencing growth in exports.

1. Elbit Systems: Israel's largest defense company specializes in drones, surveillance systems, battlefield electronics, and military optics. In 2024, $6.3 billion of its revenue came from defense.

2. Israel Aerospace Industries: This state-owned defense and aerospace company specializes in missile defense systems, satellites, combat drones, and radar technology. In 2024, $5.2 billion of its revenue came from the defense sector.

3. Rafael: This company is also state-owned and is behind Israel's highly acclaimed Iron Dome missile defense system. It also provides precision-guided munitions. In 2024, $4.7 billion of its revenue came from defense.

Heavy Growth in US Defense Shares in Recent Years

According to SIPRI, global defense spending increased by 9.4 percent to $2.7 trillion in 2024. Furthermore, NATO members have committed to increasing their annual defense budgets from 2 percent to 5 percent of their GDP by 2035, which will add hundreds of billions of dollars to annual spending.

Major arms contractors are investing billions in new orders to replenish rapidly depleting stockpiles of munitions being used in the wars in Ukraine and the Middle East, which is meeting increased demand and boosting their share prices.

(The chart below shows the growth in share prices of the largest US defense contractors from March 2023 to March 2026.)

RTX's share saw the highest increase at 110 percent, followed by Northrop Grumman at 60 percent, General Dynamics at 57 percent, Lockheed Martin at 37 percent, and Boeing at 5 percent.

Al Jazeera