U.S. Arms Dealers Report Record Profits Amid Conflicts in Gaza, Ukraine

American arms manufacturers have achieved "record profits" as a result of Israel's ongoing military operations in the Gaza Strip and Western support for Ukraine, according to a recent report by the Quincy Institute for Responsible Statecraft, an American think tank focused on foreign policy.

The report, released on October 9, highlights the financial performance of U.S. arms dealers in light of rising demand for military equipment linked to these conflicts.

The analysis shows that stock funds invested in the aerospace and defense sectors, including companies such as Boeing, Lockheed Martin, RTX, General Dynamics, Northrop Grumman, and L3Harris, have outperformed the S&P 500 index this year. The report attributes this trend to increased arms sales to Israel amidst ongoing conflicts, stating, “That handout of taxpayer funds to Israel coupled with Israel’s, and global, demand increasing for weapons in a period of instability, has been jet fuel for stock prices.”

Notably, Lockheed Martin, the manufacturer of the F-35 aircraft utilized by Israel in its military operations, reported a total return of 54.86% from October 7, 2023, to October 7, 2024, exceeding the S&P 500 by approximately 18%. RTX, known for producing 2,000-pound “bunker buster” bombs, achieved a total return of 82.69% for investors over the same period, surpassing the S&P 500 by about 46%.

The report also highlights that both Lockheed Martin and RTX shares reached all-time highs recently, while L3Harris and Northrop Grumman recorded their highest share prices since 2022. Additionally, General Dynamics, a key supplier of bunker buster bombs used in Israeli operations, posted a total return of 37%, marginally exceeding the S&P 500.

Furthermore, the iShares U.S. Aerospace and Defense fund, managed by BlackRock, hit a new all-time high last week, increasing its 12-month gain to 43%, outperforming the S&P 500 by 33%.

According to the Stockholm International Peace Research Institute (SIPRI), Israel accounted for 2.1% of total global arms imports from 2019 to 2023, with the U.S. supplying 69% of these imports. Despite global fluctuations in arms sales, the U.S. remains a dominant player in the international arms market, accounting for 42% of sales and significantly increasing military expenditures to support Israel, which exceeded $23 billion within the last year.