The ongoing conflict between Israel and Hamas has triggered a surge in U.S. defense stocks, particularly those involved in supplying weapons to Israel. This blog highlights how Lockheed Martin, RTX Corp., Boeing, and L3Harris Technologies are impacted by this geopolitical event.
U.S. Support and Military Aid
The United States has historically been a supporter of Israel, providing substantial military aid. A pivotal agreement in 2016 outlined a commitment to offer military aid worth $38 billion to Israel over a decade. This aid substantially boosts the U.S. defense majors’ profits from international markets.
Impact on Defense Stocks
The recent escalation in the Israel-Hamas conflict has notably propelled the Dow Jones U.S. Aerospace & Defense Index by a significant 6.7%. This has brought into focus key weapon manufacturers, including Lockheed Martin, RTX Corp., Boeing, and L3Harris Technologies.
Lockheed Martin (LMT)
LMT, a major supplier of aircraft to Israel, has seen a remarkable 8.6% rise in shares since Hamas’ latest strike. In response to the escalating violence, the U.S. Secretary of Defense has authorized the deployment of more Lockheed-built F-35 and F-16 fighter aircraft to the region.
RTX Corp. (RTX)
Known for manufacturing the Iron Dome Weapon System in collaboration with Israel’s Rafael Advanced Defense Systems, RTX Corp. has experienced a 5.1% surge in shares since the conflict escalated. The Iron Dome, a critical element of Israel’s missile defense architecture, plays a vital role in protecting its citizens and infrastructure.
Boeing, a significant player with its involvement in various Israeli defense programs, witnessed a 3.3% increase in shares following the Hamas attack. The company has expedited the delivery of 1,000 smart bombs to Israel in response to the heightened conflict, further boosting its role in supporting Israel’s defense.
L3Harris Technologies (LHX)
LHX, in collaboration with Israel Aerospace Industries’ ELTA Systems Group, has expanded its partnership, focusing on advanced Airborne Early Warning and Control (AEW&C) solutions. With a surge of 8.3% in shares since the escalation of violence, we can anticipate further developments in this collaboration to enhance Israel’s airborne surveillance capabilities.
Conclusion and Stock Strategies
The ongoing conflict highlights the interconnectedness between geopolitical events and stock markets, particularly in the defense sector. Investors should carefully monitor these developments and adapt their investment strategies accordingly. For comprehensive stock insights, explore Zacks’ top stock-picking strategies and stay informed about potential investment opportunities.