War Spending: Drones and Missiles
Jason@jasonr
The idea
I believe ongoing conflict in the Middle East and Ukraine keeps defense budgets rising for years, with drones and missile restocking leading the growth. The portfolio leans heaviest into drone and autonomy makers and missile and rocket-motor suppliers, anchored by larger established contractors, plus defense electronics, counter-drone tech and battlefield software for balance. No single name dominates, and I keep a cash cushion to add if a ceasefire sends defense stocks sharply lower.
What it owns
- Drone spending is the fastest-growing line in the defense budget, and these companies build the drones and loitering munitions that fly those missions. · AeroVironmentIt makes the Switchblade loitering drone and small recon drones, offering direct exposure to the fastest-growing segment of defense spending., Kratos Defense & Security SolutionsIt builds cheap jet-powered combat and target drones meant to fly alongside fighters and be lost without much pain, exactly where war spending is heading., Red Cat HoldingsIt makes small drones that soldiers carry and launch by hand, offering direct exposure to the push for cheap tactical drones in modern combat., TextronIt makes military drones and cheaper aircraft alongside its civilian business, giving the drone segment a steadier, profitable owner with diversified revenue., Ondas HoldingsIt runs autonomous drone systems, including drone-in-a-box setups and counter-drone tools that fit the military spending shift toward drones and drone defense.25%
- Every interceptor and missile fired in the Middle East and Ukraine has to be replaced, and these companies make them and their rocket motors. · RTX CorporationIt makes Patriot interceptors and other missiles fired heavily in the Middle East and Ukraine that now have to be replaced in large volumes., L3Harris TechnologiesIt owns Aerojet Rocketdyne, one of the few US makers of the rocket motors that nearly every missile needs, so restocking drives demand for its engines., Northrop GrummanIt is the other big US solid rocket motor maker and builds missiles and interceptor parts, gaining when the Pentagon refills stockpiles across multiple programs.22%
- Large contractors with years of orders already booked give the take a steadier base across missiles, aircraft, shells and ships. · Lockheed MartinIt makes THAAD and PAC-3 interceptors, Javelins and the F-35, anchoring the take with steady missile and aircraft demand as wartime restocking accelerates., General DynamicsIt makes artillery shells, combat vehicles and nuclear submarines, all things allies are buying more of because of Ukraine and regional conflict., Huntington Ingalls IndustriesIt is America's largest Navy shipbuilder, and wider regional conflict keeps pressure on Congress to fund more warships and naval capabilities.17%
- Every drone needs to be detected, jammed or guided, so the sensor and electronics suppliers get paid either way as drones spread across battlefields. · Curtiss-WrightIt makes rugged electronics and parts that go into ships, missiles and drones, so it gets paid across most of the weapons the Pentagon is buying., Leonardo DRSIt makes the sensors and radar systems used to spot and knock down enemy drones, so as drones spread on battlefields spending to defend against them rises., Mercury SystemsIt makes the processing chips and boards inside missiles, radars and electronic warfare gear, so missile restocking turns into orders for its components., Teledyne TechnologiesIt makes cameras, sensors and small reconnaissance drones that serve as the eyes on many military platforms as drone spending accelerates.16%
- The Pentagon buys AI and data software to run its drones and targeting, and these companies sell systems to plan and coordinate operations. · Palantir TechnologiesIt sells AI software the Pentagon uses to plan and run operations, including coordinating drones and targeting across military campaigns., CACI InternationalIt does electronic warfare, signals intelligence and military IT work that grows as the Pentagon tries to jam enemy drones and protect its own systems.10%
- Cash10%