Profit Alert: Missiles, Interceptors, and a Massive Supplemental

America’s war with Iran is costing roughly $1 billion a day and thousands of missiles to eliminate Iranian targets and suppress retaliation.

Now the Pentagon has requested $50 billion in supplemental funding to backfill the munitions it’s exhausted at an exponential rate.

Thus, another massive opportunity has opened up for defense contractors that were already profiting from soaring global defense budgets.

First, let’s look at the current rate of spend…

The Center for Strategic and International Studies estimates the U.S. spent a total of $3.7 billion in the war’s first 100 hours. And roughly $3.1 billion (84%) of that was spent on munitions.

However, Congressional sources have leaked a higher figure. They say America has spent $5.6 billion on munitions in just the first 48 hours of the conflict..

In any case, we’re looking at a rapid drawdown in munitions when missiles and interceptors were already in short supply.

Indeed, U.S. missiles have been flying off the shelves. Thousands have been deployed these past few years — to Ukraine to aid in its fight against Russia and to Israel in its war on Hamas, as well as other U.S. operations like the bombing of Iranian nuclear facilities last year and strikes against Iranian proxies who were targeting shipping lanes.

Now they’re flying all over the Middle East as Iran targets every regional target it can find with drone swarms.

This is an issue because those drones only cost $20,000–$40,000 a piece, but the missiles being used to shoot them down cost millions of dollars to produce.

Tomahawks, for example, are manufactured by U.S. weapons-maker RTX at a cost of $3.6 million each. PAC-3 missiles used in the Patriot missile defense system (jointly manufactured by RTX and Lockheed Martin) cost $3.7 million.

Even cheaper munitions like AIM-9s and AIM-120s carried by many U.S. and allied jets, cost $400,000 and $1 million, respectively, to produce.

That cost disparity is simply not sustainable.

Furthermore, sophisticated munitions take longer to produce. Defense contractors simply don’t have the industrial capacity to mass produce them at scale.

Drones, on the other hand, are both cheap and relatively easy to manufacture.

So, while we’ve been able to quickly overcome Iran’s defenses — an enduring retaliatory campaign of drone strikes could eventually exhaust the Pentagon’s resources.

In fact, the Pentagon is already relocating missile defense systems from South Korea to the Middle East (an unwelcome development for America’s Asian allies with China looming over them).

This issue is also at the core of that new $50 billion defense supplemental the Pentagon has requested from Congress.

And ultimately it’s going to lead to more sales for Lockheed Martin and RTX, like I’ve mentioned in the past.

In fact, Lockheed Martin has already inked a deal with the Pentagon to ramp up PAC-3 production to 2,000 units per year by 2030. And RTX has secured a seven-year deal that includes increasing annual production of Tomahawks to more than 1,000, AMRAAMs to at least 1,900, and Standard Missile-6 to more than 500.

But that’s not all.

Other major initiatives like the Golden Dome — the elaborate, all-domain defense shield being developed to safeguard the American mainland — will create an even bigger boon for defense contractors… and one in particular.

So make sure to get my latest report on that here, if you haven’t already.