U.S. Defense Stocks Rise as Gaza and Ukraine Wars Boost Global Arms Demand

Since the start of Israel’s war in Gaza in October 2023, U.S. defense companies have seen an extraordinary rise in new business. According to the available data, Washington has approved more than $32 billion in military sales to Israel. Boeing (BA) secured the largest share of roughly $19 billion for fighter jets and guided bombs. That single set of contracts accounts for more than a quarter of Boeing’s total defense backlog.

_{Boeing’s defense backlog has climbed to record highs since the Gaza war began, reflecting a surge in long-term military orders.}

Other defense stocks also benefited. Joint contracts involving L3Harris, General Dynamics (GD), and Northrop Grumman (NOC) made up another $10 billion. Lockheed Martin (LMT) added $743 million from missile sales, while Caterpillar (CAT) gained $295 million for its armored bulldozers. Oshkosh Defense (OSK) booked $583 million in vehicle deals, while RTX (RTX) logged $103 million in missile and radar components.

Even smaller players like Rolls-Royce Solutions America and Leonardo’s U.S. unit DRS Sustainment Systems reported contracts worth hundreds of millions. These orders, many scheduled for delivery through 2029, provide a steady pipeline of revenue well beyond the current conflict.

Ukraine aid still leads in scale

While Israel’s war has been a boon for U.S. defense firms, the Ukraine-Russia conflict remains the biggest single driver of profits across the sector. Between 2022 and 2025, total U.S. support for Ukraine reached about $130 billion to $183 billion, with roughly $75 billion to $130 billion classified as military aid.

Unlike the Israeli contracts, most of the Ukrainian packages involve direct deliveries from U.S. stockpiles and NATO partners. Lockheed Martin and RTX lead the way, supplying Javelin missiles, Patriot interceptors, and HIMARS launchers. General Dynamics produces artillery shells and Stryker vehicles used by Ukraine’s forces. Boeing and Northrop Grumman have also benefited from replacement orders as U.S. inventories are rebuilt.

Profits and market impact

The dual conflicts have reshaped defense industry earnings. Lockheed Martin’s missile division revenue rose 13% last year to $12.7 billion. General Dynamics and RTX both reported double-digit gains in their munitions segments. Boeing said international defense demand had become a “bright spot” amid its civil aviation struggles.

Investors have noticed. Since late 2023, defense-sector stocks have outperformed the S&P 500 (SPY) by more than 20%. The combined order books of the top five contractors now exceed $600 billion, helped by sustained demand from both Israel and Ukraine.

At the same time, some large European pension funds have withdrawn from these holdings, citing concerns over ethical and environmental standards. Yet from a financial view, the U.S. arms industry remains one of the few clear winners in a period marked by global instability.

_{Shares of major U.S. defense contractors have climbed since the wars in Gaza and Ukraine began, led by Boeing with a 25% gain, followed by Lockheed Martin and General Dynamics.}

Outlook

Both conflicts continue to influence government budgets and investor sentiment. The Trump administration’s latest proposal of another $6 billion in weapons for Israel, including Apache helicopters from Boeing, shows that the spending cycle is far from over.

For now, the same U.S. defense companies supplying Israel are also fueling Ukraine’s resistance, creating an unusual alignment of profits and policy. As orders extend into the next decade, the wars in Gaza and Ukraine have firmly locked America’s largest defense firms into a new era of growth.

Using TipRanks’ Comparison Tool, we’ve placed all the defense stocks mentioned in this piece side by side, making it easy for investors to explore each company and the broader defense sector in more detail.