Some investors shy away from risky assets, such as stocks. Since the Hamas attacks, the S&P500, one of the world’s main stock indexes, has fallen 2%. However, other investors are seeking to capitalize on the situation. This is how the shares of companies dedicated to the arms industry have risen in recent weeks.
Since October 7, American space and defense technology firms have risen on the stock market. Northrop Grumman shares are up 15%; those of Kratos Defense&Security, 13%; Lockheed Martin Corporation, 11%; and those of General Dynamics Corporation register an increase of 9%, according to data from investing.com.
It is not only the United States that has arms companies. Other important firms in the sector are the German Rheinmetall, whose shares have risen 11%, the English BAE Systems and the French Thales, whose shares have accumulated an increase of 8%, respectively.
A war increases the demand for weapons, and like any other product on the market: the greater the demand, the higher the price. Thus, the escalation of the conflict will further drive these actions.
According to the consensus of investing.com analysts, in all cases they have a 12-month target price higher than the price at which they are trading now, the most attractive being Rheinmetall, with an upside potential of 14%; Thales, with 12% and General Dynamics Corporation with an estimated increase of 13%.