US Defence Industry Records Higher Demands As Wars Rage Across The World
NDTV
Shares of the biggest defense companies, which have handily beat the benchmark S&P 500 stock index for the last two years, are expected to keep rising, according to Wall Street estimates.
When the Pentagon pulled the world's biggest defense contractors into a meeting to tell them to ramp up production shortly after Russia invaded Ukraine, one CEO hesitated, saying they did not want to be stuck with a warehouse full of rockets when the fighting stopped, according to three people familiar with the discussion.
Nearly two years later, big defense firms are singing a different tune, with several expecting strong demand in 2024 as the US and its allies load up on expensive weaponry and munitions with an eye on what they perceive as more aggressive actions from Russia and China.
The math is simple. For example, to meet demand for missile defenses, production of Patriot interceptors for the US Army - a projectile fired at an incoming missile with the aim of knocking it down - will rise from 550 to 650 rockets per year. At around $4 million each, that's a potential $400 million annual sales boost on one weapons system alone.
