Uncle Sam’s “Shadow Sovereign Wealth Fund”

It’s not often that Washington rips a page straight out of Wall Street’s playbook, but that’s exactly what’s happening right now.

Instead of just awarding billion-dollar defense contracts, the Trump administration is considering something far more direct — taking equity stakes in the companies it deems critical to America’s national security.

This isn’t just theory. We’ve already seen it in practice.

Intel accepted government money under the CHIPS Act in exchange for giving up 10% of its shares.

And more recently, the Pentagon took a 15% position in MP Materials, the rare earths miner in California’s Mountain Pass, instantly becoming its largest shareholder.

MP Materials and the Day Everything Changed

Every now and then, there’s a single day in the markets that rewrites the rules. For MP Materials, that day came when the Pentagon revealed its stake…

Until then, MP was a relatively under-the-radar player, producing rare earths that power everything from fighter jets to smartphones.

Then came the announcement: The Department of Defense was stepping in, taking an ownership stake, and backing MP with guaranteed offtake agreements and price protections.

The result? The stock rocketed nearly 50% in a single day before climbing even higher in the weeks that followed.

For investors who were already holding shares, like the members of my investing community The Wealth Advisory, it was a windfall.

For everyone else, it was a painful lesson in how fast the market can move once Uncle Sam declares his favorite.

The Birth of a Shadow Sovereign Wealth Fund

So what does this mean for investors going forward?

It means the U.S. is quietly building what amounts to a shadow sovereign wealth fund.

Instead of oil money or trade surpluses fueling investments — as we see in Norway or the Middle East — this fund is being built on the back of strategic necessity.

The Pentagon, the Department of Energy, and the Department of Commerce are all signaling that America’s most vital industries can’t be left solely to market forces.

They’re putting skin in the game, and in doing so, they’re providing investors with a blueprint: Find the companies too important to fail, buy in early, and let Washington do the rest.

So let’s take a look at some of the top defense contractors Uncle Sam might want to take a stake in…

Lockheed Martin: The Prime of Primes

If the U.S. military is the world’s most powerful, Lockheed Martin is its chief architect.

You don’t get more central to America’s defense strategy than the company behind the F-35 stealth fighter, missile defense systems like THAAD, and advanced satellite and space technology.

Lockheed already enjoys “too big to fail” status, but imagine the market reaction if the government moved from customer to shareholder.

With Washington effectively guaranteeing decades of contracts, the company’s already enviable cash flows and growing dividend would look even more bulletproof.

Lockheed isn’t just a defense contractor — it’s a global powerhouse with over $67 billion in annual sales and a backlog that stretches years.

For investors, that means stability in a volatile world, with the potential for major upside if Uncle Sam decides to double down by buying a direct stake.

Leonardo DRS: The Unsung Specialist

While Lockheed gets the headlines, the real sparks may fly in the mid-tier space — and that’s where Leonardo DRS comes in.

Born out of Italy’s Leonardo SpA, this U.S. company is a specialist in the technologies that modern warfare increasingly relies on.

Think infrared sensors for night vision, naval propulsion systems for the modernized fleet, and advanced battlefield communications.

These aren’t flashy platforms like stealth fighters, but they’re the connective tissue that makes those flashy platforms work.

Leonardo DRS is also positioning itself in growth areas like counter-drone warfare and electric power solutions.

With the Pentagon urgently seeking new tools to counter rising threats, a company like this is an ideal candidate for government backing.

And because its stock isn’t as widely held as the big primes, the market reaction to any news of an equity stake could be explosive.

Leidos Holdings: The Brain of the Operation

Not all wars are fought with missiles and tanks. Increasingly, they’re fought with data — and in that realm, Leidos Holdings is indispensable.

As one of the Pentagon’s most trusted partners in IT, cybersecurity, and advanced analytics, Leidos runs everything from secure cloud networks to battlefield intelligence systems.

It’s the quiet force behind America’s digital warfighting infrastructure, and in an era of cyberattacks and AI-driven threats, its importance is only growing.

Financially, Leidos has been a model of consistency, with revenues above $15 billion and a healthy pipeline of long-term contracts.

The company’s focus on information dominance makes it a logical target for Washington’s new investment strategy.

If the government puts its money where its mouth is and takes a stake, Leidos could see a re-rating that propels its stock to new highs.

Why Early Investors Win

History shows that the real money is made before the headlines hit. By the time Washington announces an equity stake, the easy gains are gone.

That was the story with MP Materials, and it will be the story again with whichever defense firms land on Uncle Sam’s shortlist.

Lockheed Martin offers the unmatched stability of a prime contractor.

Leonardo DRS offers nimbleness and upside potential in niche technologies.

Leidos Holdings offers the brains of the operation, securing the information and cyber backbone of America’s defense.

Together, they paint a picture of what Washington’s “shadow sovereign wealth fund” could look like.

For investors, the lesson is simple: The time to position yourself is before the market catches on, not after.

Target Acquisitions: Your Next Move

The Trump administration’s evolving strategy is creating one of the most unique opportunities investors have ever seen.

For decades, defense stocks were safe, steady, and predictable. Now they’re becoming something more: government-backed assets with asymmetric upside potential.

If you want exposure to proven giants, Lockheed, Leonardo DRS, and Leidos make a strong case.

But if you’re after the kind of gains that can transform a portfolio, you need to look where Washington is likely to strike next.

That’s where my colleague Jason Simpkins comes in…

He’s identified a sub-$5 defense stock that could be an even bigger shoo-in than the names we’ve just covered.

It’s the kind of play that could deliver MP Materials-style gains once the government reveals its hand.

So don’t wait for the announcement. The real windfalls go to the early movers.

Grab Jason’s free report right here and see which company could become Uncle Sam’s next “target acquisition.”