The large arms and military technology companies in Europe and the United States have seen their shares revalued in the last two days after the Hamas attack on Israel and the armed response. The markets are positively valuing a Western industry with deep commercial relations with Israeli companies for decades which, according to its first decisions, will be strengthened.
The world’s leading military manufacturer is Lockheed Martin and Israel, one of its most important customers. On Monday its shares rose almost 9% and this Tuesday they stabilized around 434 euros. The company had lost 12% on the stock market in 2023. The arms giant sells to Tel Aviv, among other material, F-35 aircraft, the main weapon of war of Netanyahu’s army.
An official spokesperson for Lockheed Martin explains that Israel is a privileged partner for them “for a long time and a key ally of the United States.” The company assures that it will monitor the conflict with Hamas and its impact on its workers and operations. And he adds: “We are willing to support the Government in Washington and its allies as necessary.” That is, the relationship could even escalate. The company specifies that all its commercial operations go through the White House.
Another large American company that the stock market has rewarded in recent hours is General Dynamics. In Spain it is the owner of the historic Santa Bárbara. Its shares rose 7.8% on Monday and stabilized on Tuesday. Like the shares of Raytheon Technologies (4.6%) and Northrop Grumman (11.4%)%, which experienced their best trading days in recent months at the beginning of the week.
In Europe, the main arms companies also rose on Monday and Tuesday. The German Rheinmetall appreciated by 7.1% and 1.6%. France’s Thales did the same, rising 4.7% and 1% each day. And BAE Systems, British, which improved by 4.7% and 1.5%, respectively. The French company Dassault Aviation rose 4.5% on Monday and Airbus improved more than 2% on the Paris stock market this Tuesday.
Indra, the jewel in the Spanish crown in military matters and with outstanding commercial relations in Israel, also saw its shares boosted after the outbreak of the conflict, with a rise in its shares of 1.4% on Monday and almost 1% on Tuesday. The Italian Leonardo, for its part, improved 5.7% on Monday and 1.3% yesterday.
The limelight was taken by companies of Israeli origin listed in the US. This is the case of Camtek, which plummeted 8.8% on Monday, although it recovered ground yesterday, and CyberArk, which fell 2.0% yesterday. 37%.
Beyond the geopolitical consequences, professionals from the Spanish arms industry agree that investors have seen that “there is a vulnerability” in Israeli defense systems and think that this “will mainly affect the military-technological sector.” It is the so-called “electronic war”, where the markets have seen these days that there are options for the future because it will be necessary to invest to improve it.
A director of a national defense company highlights, for his part, that “Israeli security is not going through its best moment” and recalls the Pegasus case. This situation, far from being a problem, is seen by investors as a future opportunity for the military sector, he points out.
