Profiting from war – defense companies have been posting record profits for years Image: watson/getty/imago
Wars rage all over the world. Rockets are falling and tanks are rolling in Iran, Ukraine, Sudan, Gaza and Lebanon. While hundreds of thousands of people die in acts of war, the share prices of defense companies are rising to record levels.
March 12, 2026, 12:05 p.mMar 12, 2026, 3:18 p.m
“We can call it a tremendous success or we can go further, and we will go further,” Trump said at his first press conference since the US-Israeli attack on Iran in late February. While the US President was already talking about a victory on one side, he did not signal an end to the war with the next sentence – because exactly what the US government considers a victory, Trump leaves open.
A rocket hits the Iranian capital Tehran on March 2, 2026.Image: Getty Images Europe
Since the attack, over 1,300 people have died in Iran. Within a few days, the war had spread across the entire region and its effects were felt around the world. The price of oil has risen by more than a third to 100 US dollars per barrel, causing the price of gasoline to rise to record highs. The price of gas has almost doubled in Europe. At the moment, one industry in particular is benefiting from the war: the arms industry.
Peace is bad for business
Since the beginning of the year, the share prices of US defense companies have also been rising steeply. Since then, the war climate has escalated enormously. An escalation in Iran was already foreseeable and the USA was able to invade Venezuela – without international resistance. At the same time, the US President repeatedly and openly threatens to take over Greenland by force. The war mood also spilled over into the stock markets.
The shares of the three largest US defense companies Lockheed Martin, RTX (formerly Raytheon) and Northrop Grumman have risen by 40, 61 and 50 percent respectively since the New Year. Massive increases in such a small period of time. But the biggest increase was recorded by Huntington Ingalls. Among other things, the war yard built the world’s largest aircraft carrier, the “USS Gerald R. Ford”, which the US government moved from the Caribbean to the coast of Iran a little more than three weeks ago.
The US aircraft carrier USS Gerald R. Ford off the Greek island of Crete on February 24, 2026.Image: getty/Anadolu
But it’s not just US companies that are experiencing an upswing; their war partner Israel has also been staying afloat for years despite its limping economy through gigantic government spending in its own weapons industry.
Israel’s military and surveillance industries
Israel’s economy has been in crisis for years. In 2022 the gross domestic product (GDP) grew by 6.5 percent, in 2023 it was only 1.8 percent. In comparison, the US GDP grew by 2.9 percent during this period. The war against Palestine cost Israel a lot, roughly 80 billion US dollars. The budget deficit grew to almost 7 percent. In order to plug the hole in the state treasury, the Knesset also passed the budget for 2025 Tax increasesto cover war expenses.
One sector has been benefiting from the war for years – Israel’s arms and surveillance industries are booming. Over 300 Israeli companies export internal security services and surveillance technology. They have a turnover of over three billion US dollars annually. In addition, there are Israel’s arms exports, which will amount to 14.8 billion US dollars in 2024 fourth time in a row have set a new record.
Israel’s largest arms company, Elbit Systems, has again increased its share value by 30 percent since the start of the war offensive against Iran. And Elbit’s share price was already on an almost astronomical rise since Israel’s war in Gaza.
Elbit and its shareholders are among the biggest beneficiaries of the Israeli war campaign in Gaza, in which over 71,660 Palestinians have been killed to date. Elbit’s share price has more than quadrupled since October 2023. Today the defense company is worth $40 billion companies with the highest sales Israel.
But a significant part of Israel’s defense industry is still in state hands. Still, because the Israeli government plans privatization two of their largest defense companies. In the next few months, the companies Israel Aerospace Industries, valued at around $20 billion, and Rafael Advanced Defense Systems, valued at around $10 billion, are to be sold piece by piece on the Tel Aviv Stock Exchange.
Roi Kahlon, chairman of the State Enterprise Authority, told Reuters that privatization will also free companies from bureaucratic hurdles that can hamper decision-making. He points to the success of Israel Military Industries since the company was acquired by Elbit in 2018. IMI is now valued at four times its purchase price of $571 million, he said. Israel is already the seventh largest arms exporter in the world – with room for improvement.
The top 100
Meetings like the one last Friday between Donald Trump and the CEOs of RTX, Lockheed Martin, Boeing, Northrop Grumman, BAE Systems, L3Harris and Honeywell underline the fact that the upward trend in the defense industry could probably last longer. At the meeting, the defense companies allegedly committed to “quadrupling” their production, as Trump subsequently announced.
The US military budget is already as large as that of the next nine nations combined. 37 percent of global military spending falls on the USA alone and of the ten defense companies with the highest sales, six come from the United States Report from the Stockholm Peace Research Institute SIPRI shows.
The USA dominates the list. 39 of the 100 largest arms companies are based in the USA. However, the strongest relative growth in the last four years has not been in the Israeli or US arms industries, but in the European ones.
War in Europe
Europe’s nations are massively rearming. Between 2021 and 2025 triple European states limit their arms imports. Since the beginning of the Russian invasion of Ukraine, the war has arrived in Europe and, according to the peace research institute SIPRI, remains the biggest driver of European rearmament. There are also growing uncertainties regarding the USA as a reliable NATO partner. Because they repeatedly threaten to leave the military alliance if the European member states do not drastically increased military spending increase.
Europe has therefore been increasingly looking at itself for several years and is investing primarily in its own defense companies, which has led to a real explosion in the share prices of European defense companies.
The profits of European defense companies are enormous. The German company Rheinmetall has increased its share value by over 2,000 percent since the outbreak of war in Ukraine, the Swedish Saab by over 1,000 percent and the Italian defense giant Leonardo by over 800 percent.
An additional favorable starting point for European defense companies is the withdrawal of US support for Ukraine. Since March 2025, the USA has no longer sent military aid to Ukraine – Europe is stepping into the breach and taking over the loss of US support almost one-to-one.
The signs are good for Europe’s defense industry and its shareholders. Rheinmetall expects sales growth of 25 to 30 percent again in 2025. Germany has been exporting since In 2025 even more weapons than China. But despite increased arms production in Europe, there remains a high level of dependence on US war material.
Seven European nations are currently waiting for delivery of the F35 fighter jet from US defense giant Lockheed Martin. Switzerland is also waiting for the F35, despite the threat of additional costs due to the high demand up to 1.1 billion Franconia.
Doubling Swiss arms exports
In December, the Federal Council announced that it now only wants to purchase 30 fighter jets instead of 36. In addition to the involvement with Lockheed Martin, Switzerland has been trying since 2008 Reconnaissance drones from Elbit Systems to come – so far without success and the military complains about liquidity problems with the planned rearmament. But what is not can still become. By 2030, Switzerland will be… Army spending to one percent of gross domestic product or around 30 billion francs.
But while imports are stalling, the export of Swiss war material is going smoothly. Switzerland delivered in 2025 War material worth 948.2 million out – almost twice as much as in 2024.
Switzerland’s military budget increase is in line with other Western nations. NATO countries have committed to increasing their military spending to five percent of their GDP by 2035. The Pentagon wants to increase its military budget from 997 billion by 2027 1.5 trillion dollars increase and Israel is pouring another 13 billion US dollars into the military to finance war against Iran.