The beneficiaries of war

While the recent US-Iran conflict may not yield clear geopolitical victors, it has undeniably created substantial commercial opportunities, primarily benefiting the defense industry. Both Washington and Tehran have incurred significant costs in terms of military resources, economic disruption, and strategic pain. However, for major defense contractors, the conflict has translated into a surge in demand and record profits. Lockheed Martin, for instance, reported a dramatic increase in earnings for the second quarter of 2026, reaching $1.8 billion compared to $342 million in the same period the previous year. Its sales climbed 11% to $20.1 billion, with its missiles and fire control segment experiencing a 19% rise. Similarly, RTX, the parent company of Raytheon, saw its net income grow to $2.139 billion in Q2 2026, up from $1.657 billion in 2025. Raytheon's sales increased by 18% to $8.269 billion, driven by demand for systems like Patriot, Standard Missile, and AMRAAM. The continuous firing of missiles and depletion of stockpiles necessitate constant replenishment, creating a multi-year procurement cycle for these firms. Geopolitical instability, therefore, directly fuels the order books of the military-industrial complex. Beyond defense, select energy sector firms have also emerged as beneficiaries, capitalizing on the uncertainty surrounding the Strait of Hormuz and disruptions to regional energy flows.

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Every missile fired has to be replaced. Every depleted stockpile creates new procurement requirements. Every perceived vulnerability generates pressure for additional defence spending.