Missiles, Munitions & Energetics

Jim Cramer said he likes L3Harris Technologies and advised investors to build a position gradually rather than trying to pick a bottom, speaking during the October 7 lightning round of Mad Money. Cramer suggested buying in increments, using a $230 stock divided by 10 as a $23 stock, buying the first tranche at 23 and adding down to 20. The comments followed L3Harris's second-quarter results, which showed orders of $7.3 billion, a book-to-bill ratio of 1.2x, and a record backlog of $42 billion. Revenue rose 8% to approximately $5.9 billion, diluted EPS climbed 28% to $3.13, and free cash flow increased 37% to $771 million. Missile Solutions revenue grew 14% to approximately $1.05 billion, while Communications & Spectrum Dominance operating margin rose to 26.9% from 24.6%. Cramer's interest comes even as L3Harris trades at approximately 18.7x forward earnings, above Lockheed Martin at 16.5x and Northrop Grumman at 16.6x, and as hedge fund holders slipped to 56 in Q2 from 59 in Q1.

Raytheon, an RTX business, has secured multi-year U.S. Navy contracts worth up to US$24.40 billion for Standard Missile-6 interceptors and up to US$6.30 billion for Standard Missile-3 Block IB interceptors, alongside additional awards tied to rising global missile defense demand. The long-term missile production and sustainment deals deepen RTX's role in critical air and missile defense infrastructure and reinforce its extensive backlog. The five-year Standard Missile 6 contract in particular supports RTX's backlog-driven investment case and ties into management's plan to spend about US$10.0 billion to US$10.5 billion in 2026 on engineering and capital projects aimed at easing missile capacity constraints and improving margins over time. RTX's narrative projects $112.3 billion in revenue and $10.9 billion in earnings by 2029, requiring 6.3% yearly revenue growth and a $3.2 billion earnings increase from $7.7 billion today. Three Simply Wall St community fair value estimates for RTX span roughly US$215.80 to US$234.82 per share, with the forecasts implying a $234.82 fair value and a 27% upside to the current price.

RTX's Raytheon business announced an AMRAAM production contract valued at up to $20.7 billion on September 28, covering five years with two option years and supporting a substantial increase in missile production. The maximum contract value should not be confused with revenue already earned. RTX also reported second-quarter sales of approximately $24.7 billion, up 14%, and adjusted earnings per share of $1.89, up 21%, with a backlog of $289 billion split between $170 billion in commercial orders and $119 billion in defense orders, and management raised its full-year adjusted EPS outlook to $7.10 - $7.25 from $6.70 - $6.90. On Mad Money, Jim Cramer said RTX keeps getting contract after contract despite fears that the defense budget has peaked, but he warned that weakness in commercial aerospace, where airlines could cut plane purchases if oil stays high, remains a complication. Pratt & Whitney's latest quarterly commercial aftermarket sales rose 25% even as commercial original-equipment sales fell 8%, and RTX continues to absorb costs from the Pratt & Whitney powder-metal issue, with its second-quarter filing estimating an approximately $700 million cash impact in 2026. At approximately 24.9x forward earnings, RTX traded below GE Aerospace's 36.9x but above Lockheed Martin's 16.6x, while 92 hedge funds held the stock in the second quarter versus 95 in the first, and short interest stood at 1.01% of the float.

Lockheed Martin Corp. has secured a key framework agreement with the Pentagon for its AIM-260 Joint Advanced Tactical Missile, positioning the company to ramp up production and delivery timelines for the advanced air dominance missile. The framework could provide multiyear revenue visibility if a proposed procurement contract secures Congressional approval, and Australia has announced plans to invest around A$736 million to equip the Royal Australian Air Force with the JATM. Lockheed Martin's partnership with Raytheon, The Javelin Joint Venture, signed an MOU with Tata Advanced Systems to explore co-production of the Javelin All Up Round missile system in India. The stock traded at $505.50 by October 1 closing, stretching Lockheed's 2026 year-to-date return to 4.51%, with a market capitalization of $124.19 billion and a trailing P/E ratio of 19.84x. Hedge fund ownership declined from 83 funds in Q1 2026 to 75 funds in the following quarter, while State Street Corporation held 32.98 million shares, or 14.29% ownership, as of June 30.

RTX Corporation received an $11.6 million Navy contract modification for spare Seeker Head Assemblies supporting RAM Block 1/2 guided missile round packs, with work extending through December 2029. The award reflects recurring sustainment demand tied to the Rolling Airframe Missile program, which provides ships with short-range defense against anti-ship missiles and other airborne threats. RTX's Raytheon business has a long-standing role in the RAM program, supporting continued production and sustainment of the system. Beyond RAM, RTX holds a broad portfolio of missile defense and precision weapons serving U.S. and international customers, and growing efforts to replenish missile inventories and modernize naval fleets could create additional opportunities. Shares of RTX have surged 11.1% in the past year against the industry's 20.6% decline, and the stock carries a Zacks Rank #3 (Hold).

Boeing has secured an undefinitized contract worth about US$14.7b from Lockheed Martin to scale PAC-3 Missile Segment Enhancement seeker production over a seven year period. The award comes as Boeing shares closed at US$188.32, with a 90 day share price return down 15.59%, a year to date share price return down 17.32%, and a one year total shareholder return down 16.42%. On the operating side, Commercial Airplanes narrowed its operating margin from negative 5.1% to negative 2.7% on 171 deliveries against 150, while the 737 is transitioning to 47 per month from 38 a year ago, with a fourth Everett line activated in July and management targeting 52 next year. A Simply Wall St narrative pegs Boeing's fair value at $160.01, implying the stock is 17.7% overvalued, while the firm's discounted cash flow model points to a future cash flow value of $376.49.

Raytheon, an RTX business, has secured a five-year contract with two additional option years valued at up to $24.4 billion for Standard Missile-6 interceptors for the U.S. Navy. The U.S. FDA approved an additional indication for Eli Lilly's Jaypirca, or pirtobrutinib, allowing its use as a first-line treatment for adult patients with previously untreated chronic lymphocytic leukemia or small lymphocytic lymphoma without a known 17p deletion, based on the BRUIN CLL-313 trial where progression-free survival was significantly improved with a hazard ratio of 0.20 and a p value below 0.0001. SAP SE agreed to acquire TechWolf, an AI work intelligence platform provider, in a deal expected to close in the fourth quarter of 2026 subject to regulatory approval, with terms not disclosed. Hagens Berman is investigating potential securities law violations by IBM after CEO Arvind Krishna previewed disappointing second-quarter 2026 results on July 14, 2026, sending IBM shares down 25% in one day and erasing over $68 billion in market capitalization. Canadian National Railway set a new quarterly record for grain movement, moving 7.94 million metric tonnes of grain from Western Canada in its third quarter, surpassing the previous record of 7.48 million metric tonnes set in 2020.

Federal Ammunition, Mossberg and Palladyne AI Corp. announced the joint development of SwarmShot, a modular autonomous airborne counter-unmanned aircraft system designed to turn compatible drones into reusable air-to-air interceptors operating as a collaborative kinetic defensive swarm. SwarmShot will combine Federal's specialized counter-UAS shotshell ammunition, a lightweight Mossberg weapon module purpose-engineered for airborne operation, and Palladyne AI's IntelliSwarm autonomy system, which pairs BRAIN avionics with SwarmOS collaborative autonomy software. The system will first be developed as a modular mission add-on for Gremlin-X, Palladyne AI's Group 1 quadcopter mini-bomber, after which the companies plan to offer SwarmShot to other manufacturers as an integration kit for compatible unmanned aircraft. Federal will lead ammunition design and terminal-effect optimization, drawing on its recent U.S. Army counter-UAS ammunition contract, while Mossberg leads the airborne weapon module and Palladyne AI leads UAS integration, fire control, terminal-intercept autonomy and multi-interceptor coordination. The effort is a defensive application of Palladyne AI's predictive autonomy collaborative swarming capability, recently deployed with the U.S. Army at Project Convergence Capstone 6 and other Army exercises. Development schedules, potential customer engagements and financial terms were not disclosed.

Lockheed Martin raised its full-year sales and profit guidance after reporting strong second-quarter fiscal 2026 results and a record backlog of $230 billion. Sales rose 11% from the prior year to $20.1 billion, and net earnings per share came in at $7.94 versus $1.46 a year earlier, when the company was hit by a $1.6 billion charge tied to its Aeronautics unit and helicopter programs that did not repeat. The backlog was up 38.3% year-over-year, an increase of $36.8 billion from six months ago, driven by $65 billion in new orders during the quarter, including a $35 billion multi-year contract for THAAD interceptors. Lockheed now expects full-year sales of $79.75 billion to $81.75 billion, up from an initial range of $77.5 billion to $80 billion and above analysts' average estimate of $79.14 billion, with full-year EPS of $29.95 to $30.65 against earlier forecasts of $29.35 to $30.25 and Wall Street's $29.90. The stock trades at a forward price-to-earnings ratio of 16.16, below the sector median of 18.97, below peer RTX at 24.57, and below its own five-year average of 17.79, with investors watching how the F-35 maker delivers on its third-quarter results expected later this month.

Avio USA broke ground on its first U.S. manufacturing facility, an approximately 900,000-square-foot solid rocket motor plant in Hurt, Virginia, that will add significant domestic capacity for U.S. missile and munitions production. Located at the Southern Virginia Multimodal Park, the facility will give Avio USA the capacity to produce thousands of solid rocket motors annually for U.S. tactical missile programs, and the company expects to create roughly 1,500 high-quality technical jobs in Southern Virginia. Avio USA is a subsidiary of Avio S.p.A., the Rome-based rocket and space propulsion group, and operates under a DCSA Special Security Agreement; CEO James Syring said the goal is to be an independent, open-source merchant supplier able to support multiple customers and programs. HITT Contracting is leading construction as general contractor, with completion expected by late 2028 and production anticipated to begin in early 2029, supporting solid rocket motor requirements across the U.S. defense industry, including programs for Lockheed Martin and Raytheon. Avio CEO Giulio Ranzo said the successful completion of the company's capital raise provided the resources for the investment, which will expand U.S. solid rocket motor manufacturing capacity and establish a lasting American presence for Avio.

Boeing announced on the 5th that it has been awarded a seven-year contract worth about $14.7 billion from Lockheed Martin for the expanded production and delivery of seekers, the guidance units, for the PAC-3 Missile Segment Enhancement, or MSE, hit-to-kill interceptor. Under the contract, Boeing will be able to triple its production of PAC-3 MSE seekers. The PAC-3 MSE is a hit-to-kill interceptor used in the Patriot air defense system to intercept ballistic missiles, cruise missiles and aircraft. Lockheed announced in January that it had signed a seven-year framework agreement with the U.S. Department of Defense to raise annual production capacity for PAC-3 interceptors from about 600 to 2,000, and the latest contract is part of that production expansion. Demand for interceptors has surged as conflicts in the Middle East and Ukraine strain U.S. weapons stockpiles, and the U.S. Army in July awarded Lockheed a contract worth up to $58.6 billion to expand PAC-3 missile production. Industry executives, however, warn that Congress has not yet approved the funding needed for these contracts, and contractors may be unable to make large investments in parts and facilities until lawmakers act.

The FY2026 defense appropriations agreement includes more than $6.3 billion for 13 critical munitions and grants conditional multiyear procurement authority for eight of those programs, a tailwind for RTX Corp. as it scales production of AMRAAM air-to-air missiles, Standard Missiles and Tomahawk cruise missiles. RTX's order backlog reached a record $289 billion by the end of second quarter fiscal 2026. The company will spend $25 million to expand its Niepołomice site in Poland, which delivers tubular assemblies for commercial and military engines, following a $100 million capital outlay announced in April for its Rzeszów facility. RTX closed at $185.01 on October 1 with a market capitalization of about $249.3 billion, trading at a trailing P/E of 33.62x and a forward P/E of 24.57. Hedge fund ownership slipped from 95 funds in Q1 2026 to 92 funds in the following quarter, while BlackRock remains the largest institutional stakeholder with 110.53 million shares, or 8.20% ownership.

L3Harris Technologies has secured an undefinitized contract from Lockheed Martin worth more than US$6b over seven years to expand propulsion output for the THAAD missile defense system. The arrangement follows a prior framework with the Department of War to quadruple THAAD propulsion production and includes both a new Solid Rocket Boost Motor facility and added Liquid Divert and Attitude Control capacity. The contract lands as L3Harris shares have fallen about 9% over the past month and 22% year to date on a share price basis, though the 3 year total shareholder return is up roughly 53%. The company closed at $236.60, while the most followed narrative estimates fair value at about $342 per share using an 8.4% discount rate, framing the win as one more contract feeding into a broader backlog and earnings story. The story could break if U.S. budget pressure trims space spending or if prime contractor delays slow conversion of the reported US$42b backlog.

The US Navy has placed a multi-year contract with Raytheon, a unit of US defense giant RTX, to produce the Standard Missile 6 (SM-6) interceptor. The contract is worth up to $24.4 billion. It covers five years with an option to extend for another two, aiming to ensure a stable and reliable supply of the SM-6, which can carry out both strike and missile defense missions. The deal is part of a series of large weapons contracts pursued this year as the US Department of Defense seeks to replenish ammunition stockpiles depleted by conflicts in the Middle East and push defense companies to accelerate production. In late September, it signed a $20.7 billion multi-year preliminary contract for Raytheon's AMRAAM air-to-air missile, and in July it awarded Lockheed Martin a $58.6 billion Patriot interceptor missile contract. Industry executives have warned that Congress has not yet approved the funding needed for these contracts, and that defense companies may be unable to make large-scale investments in components and equipment until Congress acts.

Kratos Defense & Security Solutions is expanding its solid rocket motor capabilities through Prometheus Energetics, a joint venture with RAFAEL that will build a state-of-the-art energetics manufacturing campus on an approximately 500-acre site near the U.S. Navy and Army facility in Crane, Indiana. Kratos Defense and RAFAEL have committed up to $175 million in capital for the venture, covering the manufacturing facilities, property, equipment and personnel needed for the planned operations. Following construction and completion of RAFAEL's technology transfer and certification, Prometheus is expected to begin solid rocket motor production in 2027, with Kratos' investment in the venture ramping up during 2026 to support development of the planned manufacturing infrastructure. The new capacity could strengthen Kratos' position in propulsion and rocket systems, adding another manufacturing base alongside its existing Zeus solid rocket motors. Rivals Northrop Grumman and Lockheed Martin are also expanding solid rocket motor manufacturing capacity across their U.S. facilities to support defense and space propulsion programs and strengthen the domestic propulsion supply chain.

GE Aerospace and Kratos Defense successfully ignited the GEK800 turbofan cruise missile engine, a fresh data point for investors watching General Electric's defense story. The news lands against a mixed stretch for the share price: a 30 day share price return of 7.21% and a 90 day share price return of 15.22%, alongside a 1 year total shareholder return of 6.08% and a very large 5 year total shareholder return. General Electric now trades only slightly below some intrinsic value estimates while sitting well under the average analyst target, and on the narrative view its fair value sits at $307 against a last close of $317.89, a 3.5% overvalued reading. On the P/E lens the shares trade on 36.8x earnings, above both the 35.6x industry average and the same 35.6x peer group level, and above a fair ratio estimate of 34.7x. The company's reliance on Boeing's production tempo and exposure to tight aerospace supply chains remain the key risks to the wide moat narrative.

RTX unit Raytheon has secured a multi-year AMRAAM missile production contract worth up to US$20.7b. The agreement supports the Department of War's Arsenal of Freedom initiative to accelerate delivery of advanced air-to-air missiles, and the multi-year award is intended to expand AMRAAM manufacturing capacity to meet large-scale government demand for missile systems. RTX operates as a large US$252.9b aerospace and defense contractor that supplies systems and services to military, commercial, and government customers, so the long-term AMRAAM production agreement fits directly into its core role as a key weapons supplier for US defense programs. The award plugs into an RTX narrative that hinges on converting a US$289b backlog, especially long-duration munitions deals, into tangible revenue and operating profit, and the Arsenal of Freedom scope lines up with earlier commentary on several contracts where missile volumes are expected to rise between 2x and 4x. The key proof point is whether RTX gets AMRAAM output up to the levels implied by this deal while preserving margins, with reported book-to-bill in Raytheon, missile shipment volumes tied to the Arsenal of Freedom initiative, and management's updates on missile capacity within the planned US$10b to US$10.5b 2026 capital program as the metrics to watch.

Lockheed Martin Missiles and Fire Control has been awarded a $244.96M firm-fixed-price modification to a previously awarded U.S. Navy contract, adding scope to procure Full Rate Production 2 of F/A-18E/F Infrared Search and Track Block II systems. That modification covers 48 infrared receivers, 45 for the Navy and three for the Royal Australian Air Force, along with 74 processors and 27 inertial measurement units for the Navy, plus test equipment maintenance and lay-in material, with work performed across Florida, California and Pennsylvania and expected completion in February 2031. The Navy also awarded Lockheed a $52.11M cost-plus-fixed-fee modification to a previously awarded contract to incorporate engineering changes into F-35 Lot 18-19 air vehicle production for the Air Force, Marine Corps, Navy, F-35 Cooperative Partners and Foreign Military Sales customers. Separately, Lockheed Martin Rotary and Mission Systems of Moorestown, New Jersey, was awarded a $724M contract modification for the Japanese Ministry of Defense, raising the total contract value from $1.64B to $2.36B. That contract covers delivery of the Aegis System-equipped vessel #1 and ASEV #2 AEGIS Combat System to Japan, with work performed in Moorestown, New Jersey, and Japan from Sept. 29, 2026, through March 31, 2030.

Insiders say Iran sees little possibility of reaching an agreement to end the war with the United States and reopening the Strait of Hormuz before the midterm elections in November, while talks between the two sides on the sidelines of last week's UN General Assembly made only slight progress. Iran believes there is a high likelihood the conflict will escalate after the US midterm elections on November 3. President Donald Trump told reporters on Monday, September 28, that US representatives are discussing negotiations with Iran through intermediaries but declined to give details, stressing that the matter will end one way or another and will conclude fairly quickly. A US official said Washington will not reach a deal with Iran without resolving the issue of Iran's nuclear program, and that Trump is ready to ease sanctions and unfreeze Iran's frozen assets if Iran shows concrete progress on the nuclear issue. Meanwhile, Iranian Foreign Minister Abbas Araghchi, who met last week with Trump representatives Jared Kushner and Steve Witkoff, remains in the United States for further discussions through intermediaries. Qatari mediators are expected to arrange separate talks with Abbas Araghchi in New York and to hold discussions with the US side on Monday or Tuesday local time. The main issue is refining the proposal for a 7-day opening of Hormuz that Iran put forward last week. Mediators are pushing for an agreement different from the memorandum of understanding signed by Iran and the United States in mid-June, which led to a ceasefire and helped increase shipping through the Strait of Hormuz but collapsed within just two weeks and was criticized by US politicians as giving Iran too much financial benefit, especially through sanctions relief. Iran continues to restrict shipping in the Strait of Hormuz, leaving cargo and oil transport volumes far below pre-war levels. Two sources said the US government has told intermediaries that it wants Iran to give clear commitments on reopening the Strait of Hormuz and to make concessions on the nuclear program. Iranian President Masoud Pezeshkian reiterated to the UN General Assembly that Iran does not seek to develop nuclear weapons but will not give up its right to develop nuclear technology for economic benefit.

Kratos Defense & Security Solutions and GE Aerospace announced the successful first ignition of the GEK800 Serial Number 1 turbofan engine on September 21, a milestone in a program the U.S. military has designated the F143-ZZ-100. The test, conducted at Kratos' X-58 facility, achieved a 100% success rate for the development phase and keeps the affordable, high-performance propulsion system on schedule for advanced cruise missiles and uncrewed aerial systems. For Kratos, the milestone supports a Government Solutions segment that posted $379.7 million in Q2 2026 revenue, up 22.0% organically, with Turbine Technologies up 43.3% organically, a consolidated book-to-bill ratio of 1.1x and $2.084 billion in backlog, as the company ramps full-year 2026 revenue guidance to $1.750–$1.810 billion. GE Aerospace's Defense & Propulsion Technologies segment reported $3.4 billion in Q2 2026 revenue, up 16%, and raised full-year DPT operating profit expectations to $1.6–$1.7 billion. Kratos also faces cash conversion pressure, with $11.0 million in Q2 2026 operating cash outflow and $18.9 million in negative free cash flow, while GE's DPT margins face ongoing pressure from investments and inflation.

The dollar index held steady near a two-month high, supported by a stalemate in peace talks between the United States and Iran, which pushed oil prices sharply higher and increased the likelihood that the Federal Reserve will raise interest rates. As of 11:05 p.m. Thailand time, the dollar index was up 0.24% at 101.210 and was on track for a 1.7% gain this month, which would be its largest monthly increase since June. Meanwhile, investors increased their bets that the Fed will raise rates twice more this year, with the CME Group's FedWatch Tool indicating that investors now assign a 68.1% probability to a 0.25% Fed rate hike to a range of 4.00-4.25% at the October meeting, up from 57.6% a week earlier, and a 55.1% probability of another 0.25% increase to 4.25-4.50% in December, up from 44.1%. In global oil markets, crude prices surged more than 3%, with West Texas Intermediate crude breaking above 95 dollars per barrel and Brent crude topping 108 dollars per barrel, after President Donald Trump rejected Iran's conditional peace proposal to open the Strait of Hormuz and told aides he expected the United States to strike Iran again after the November midterm elections. Investors are also watching several economic data releases this week, including the August personal consumption expenditures price index due on Wednesday, manufacturing figures on Thursday, and the September nonfarm payrolls report on Friday.

Global crude oil prices soared more than 3% after US President Donald Trump rejected Iran's peace proposal, which aimed to end the conflict in the Middle East and open the Strait of Hormuz. As of 7:09 p.m. Thailand time, West Texas Intermediate crude for November delivery rose 3.52 dollars, or 3.80%, to 95.93 dollars per barrel, while Brent crude for November delivery rose 3.83 dollars, or 3.67%, to 108.15 dollars per barrel. Iranian Foreign Minister Abbas Araghchi said Iran will reopen the Strait of Hormuz and resume nuclear negotiations with the United States within seven days if the Trump administration agrees to Iran's conditions. Iranian Foreign Ministry spokesman Esmaeil Baghaei said the conditions include ending what Iran calls US acts of aggression, lifting the naval blockade and economic warfare against Iran, and unfreezing Iranian assets. Meanwhile, President Trump told his aides that he expects the United States to strike Iran again after the November midterm elections, and that the conflict with Iran is expected to end soon after the midterms, after which oil prices will decline.

The conflict between the United States and Israel and Iran that erupted on February 28 shut down both the Strait of Hormuz and the Bab el-Mandeb Strait, key passages for the world's oil and goods, at the same time. Brent crude closed at $103.87 a barrel on September 18, up about 70% since the start of the year, and touched a four-year high of $126, after trading at around $68 to $70 a barrel before the war. Traffic through the Strait of Hormuz, which once carried about 20 million barrels of oil a day, fell by roughly 95%, and war risk insurance premiums surged from about 0.25% to between 3% and 10% of a vessel's value, pushing VLCC charter rates from the Middle East to China to $423,736 a day in early March, the highest level since record-keeping began in November 2005. Saudi Arabia's crude oil exports fell from more than 7.5 million barrels a day at the start of the year to about 2.1 million barrels in the first half of September, a drop of more than 70%, after the East-West pipeline was suspended on September 11 and Aramco halted loadings at the Yanbu port. On the domestic impact, Thailand imports about 57% of its oil from the Middle East, diesel prices jumped from 29.94 baht a liter to 50.54 baht a liter on April 7, and the OECD expects Thailand's GDP growth to fall from 2.4% in 2025 to 1.7% in 2026. The Fed raised interest rates by 0.25% to 3.75% to 4% on September 16, its first hike since 2023, while the WTO expects global goods trade to grow 1.9% in 2026, down from 4.6% in 2025, and the IMF expects the world economy to grow 3.0% in 2026 and 3.4% in 2027.

President Lai Ching-te, Taiwan's leader, said Taiwan needs to tighten cooperation with democratic countries in developing drone technology, which is crucial to waging modern warfare, amid rising military pressure from China. Speaking today at the groundbreaking ceremony for a new drone development center in Chiayi in southern Taiwan, he said that from the battlefields of Ukraine to security in the Indo-Pacific region, drones have become a key fighting force in modern national defense. He called on Taiwan to work with democratic countries to develop a secure and resilient drone supply chain in order to support peace and stability in the Indo-Pacific. His remarks came as the Taiwanese government pushes ahead with military upgrades and higher defense budgets as one of its main policies, after China stepped up military pressure on Taiwan earlier this month. Taiwan's Cabinet proposed adding 145.7 billion Taiwan dollars, about 4.59 billion US dollars, to this year's defense budget. The budget covers the procurement of drones and missile interception systems, including more than 600 surveillance and coastal patrol drones, more than 40,000 coastal attack drones, and more than 100 explosive-laden unmanned boats. Lai said Taiwan has strengths in semiconductors, information and communications technology, and high-precision manufacturing bases that can be leveraged to develop a drone industry.

Lockheed Martin has secured a U.S. Army contract worth up to $1.2 billion to produce the Increment 2 variant of its Precision Strike Missile, a next-generation long-range weapon designed to replace the Army Tactical Missile System. The award follows a second successful flight test in August that demonstrated the Increment 2 missile's ability to engage moving maritime targets. The contract is an indefinite-delivery, indefinite-quantity vehicle covering initial procurement, future orders, follow-on production and continued development, so the $1.2 billion ceiling is not guaranteed revenue. It builds on a seven-year agreement signed in March to raise annual PrSM production capacity to 550 missiles, following a $4.94 billion Army contract awarded in 2025. Lockheed's Missiles and Fire Control segment posted $4.1 billion of sales in the second quarter of 2026, up 19% year over year, with operating profit up 24% to $594 million, and its backlog reached $87.9 billion as of June 28, 2026, helping push the company's total backlog to a record $230.4 billion. Lockheed is simultaneously ramping PrSM, PAC-3 and THAAD production, putting pressure on manufacturing capacity and the supply chain.

GE Aerospace, a unit of General Electric, and Kratos completed a successful ignition test of the new GEK800 cruise missile engine. The milestone advances propulsion systems designed for long range cruise missiles in support of Department of War programs, and highlights fresh engineering and manufacturing capabilities within GE Aerospace focused on high performance, cost focused defense propulsion. The GEK800 ignition ties directly into General Electric's Defense & Propulsion Technologies backlog above US$30b and supports the catalyst around acceleration of next generation engine programs such as adaptive cycle engines and CCA propulsion. For the milestone to matter to shareholders, the next stretch of the GEK800 program needs to hold schedule and convert into volume work, with formal program decisions from the Department of War, a shift from single engine trials to a broader qualification campaign, and signs that GE can fold any eventual production into its FLIGHT DECK supply chain model without adding margin pressure to the wider defense portfolio.

The Saudi-led coalition in Yemen revealed that it intercepted 2 guided missiles and 2 drones fired into Saudi Arabia by the Iran-backed Houthi group. The two missiles were headed toward the city of Khamis Mushait, while the two drones were headed toward Riyadh. Civil defense authorities issued warning alerts overnight for the Khamis Mushait and Abha areas, but no alert was issued for Riyadh. The attack came after the Houthis announced a maritime blockade against Saudi Arabia in July, targeting Saudi ships in the Red Sea, creating pressure on global oil supplies and risk to Red Sea shipping routes, while navigation through the Strait of Hormuz remains largely blocked. Amid the situation, military commanders of Saudi Arabia, Pakistan, and Turkey, which are defense allies, met in Riyadh just a few hours earlier to review the threats Saudi Arabia is facing, after the three countries signed the joint Mecca defense agreement in August, which states that an armed attack on any one country will be considered an attack on all. Saudi Defense Minister Prince Khalid bin Salman said he discussed with Asim Munir, Pakistan's army chief, in Riyadh and confirmed the continuation of joint cooperation to counter attacks under the agreement.

Lockheed Martin Corporation has received its first shipment of critical housing components for Patriot PAC-3 MSE interceptors from General Motors Company's defense unit, just 22 days after the two companies signed a manufacturing agreement on August 6, 2026. The components, delivered August 28, traditionally take months or years to produce, according to Reuters, as the Pentagon pushes for faster weapons production amid surging global demand for the Patriot missile defense system. The U.S. Army has announced a seven-year agreement worth up to $58.6 billion for PAC-3 MSE production from fiscal 2026 through 2032, supporting Lockheed's plan to raise annual output to 2,000 interceptors. Lockheed plans to invest $8 billion to $9 billion through 2030, modernize more than 20 facilities and add thousands of workers, though the companies have not disclosed the contract's value, expected component volumes, or GM's potential revenue. The initial shipment remains too small to affect either company's financial results by itself, and GM must demonstrate repeatable quality and volume before investors can assign value to the partnership.

Metallus has been awarded a U.S. defense contract worth up to a maximum of $995M for High Fragmentation 1 Steel. The five-year contract runs through Sept. 24, 2031, and carries no option periods. Funding comes from fiscal 2025–2029 transaction funds under the contract, with the DLA Contracting Services Office serving as the contracting activity.

Yemen's Houthi group said on the evening of Thursday, September 24, that it had fired missiles and sent drones to attack highly sensitive targets in Riyadh, the capital of Saudi Arabia, as well as facilities belonging to Aramco in Yanbu, a Red Sea port city. It marks a new round of long-range attacks amid an increasingly intense conflict with Saudi Arabia. Meanwhile, French President Emmanuel Macron said France is preparing to send military equipment to help protect Yanbu, a key industrial and energy hub on Saudi Arabia's Red Sea coast. In other conflicts, Iranian President Masoud Pezeshkian said ending the war that has dragged on for seven months depends on a decision by the United States, while China is pushing all parties to reduce tensions. At the 81st regular session of the United Nations General Assembly, Xinhua News Agency reported that representatives of several countries walked out of the chamber in protest while Israeli Prime Minister Benjamin Netanyahu delivered his remarks during the general debate. Chinese President Xi Jinping said at the White House on Thursday, September 24, that both China and the United States have the capacity and the responsibility to develop and manage artificial intelligence technology for the benefit of humanity, and must ensure that such technology always remains under human control. Meanwhile, U.S. airlines came out against the idea of adding passenger flights between the United States and China after President Xi Jinping proposed that the two countries increase direct flights. U.S. airlines argued that adding flights would further favor Chinese carriers, since they can still use flight routes through Russian airspace. In financial markets, the yield on 10-year Japanese government bonds jumped to 3.115% today, the highest level since August 1996. And Denmark's defense intelligence service warned that Russia may carry out limited military attacks on NATO member states in the coming months, assessing that the risk has increased although it remains at a low level.

The TISCO Economic and Strategic Analysis Center, or TISCO ESU, assesses that global financial markets are entering a phase of capital competition, as governments around the world need to borrow heavily to expand defense budgets while private-sector big tech and hyperscaler firms seek to raise enormous sums to accelerate the buildout of data center infrastructure, chip fabrication plants, AI facilities, and power plants. This is pushing interest rates and government bond yields up by roughly 0.60 to 0.90 percent. Komson Prapakpol, head of the TISCO Economic and Strategic Analysis Center, said the United States plans to expand its defense budget from 1 trillion dollars to 1.5 trillion dollars, an increase of 50 percent, while Japan aims to raise defense spending from below 2 percent to 3.5 percent of GDP, the highest level since the period from 1970 to 1980. Germany and France are also accelerating increases in their security budgets. Thanaphat Thanachat, an analyst at TISCO ESU, said the United States has public debt exceeding 100 percent of GDP, or more than 40 trillion dollars, and a fiscal deficit as high as 6 percent of GDP per year, driving its interest burden to double that of four to five years ago. France's public debt has risen by nearly 20 percent of GDP between 2019 and 2025, with an annual deficit of 5 percent of GDP. As for the interest rate path of the three major central banks, TISCO ESU expects the Federal Reserve to raise rates one more time, by about 0.25 percent, at its December meeting, ending at 4.25 percent, and to hold at that level through 2027 before cutting in 2028. The European Central Bank is expected to raise rates one more time, by about 0.25 percent, in December, while the Bank of Japan is expected to gradually keep raising rates until they reach 1.75 percent in mid-2027. The yield on 10-year U.S. government bonds is expected in the base case to hold steady at 5 percent through the end of 2026, but if the Federal Reserve fails to control inflation, the worst case could see the bond yield rise to 6 percent.