Defense Stocks Surge Following Strikes on Iran
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 02 2026
0mins
Should l Buy ESLT?
Source: NASDAQ.COM
- Defense Stock Rally: Following the U.S. and Israel's strikes on Iran, defense stocks generally surged, with Ondas Holdings and Elbit Systems rising by 10% and 7% respectively, reflecting strong market confidence in the defense sector.
- Ondas Holdings Revenue Surge: Ondas Holdings reported $10.1 million in revenue for Q3, a staggering sixfold increase year-over-year and a 60% sequential rise, with a target of at least $110 million in revenue by 2026, indicating rapid growth in drone technology.
- Elbit Systems Order Backlog Growth: Elbit Systems saw a 12% increase in Q3 revenue to $1.92 billion, with a backlog of $25.2 billion, highlighting a significant rise in demand for defense products amid ongoing Middle Eastern conflicts.
- Market Reaction: Despite an initial drop in U.S. stocks due to the strike news, most losses were recovered later, with gold prices spiking, indicating investor preference for safe-haven assets, which further propelled the rise in defense stocks.
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Analyst Views on ESLT
Wall Street analysts forecast ESLT stock price to fall
3 Analyst Rating
1 Buy
2 Hold
0 Sell
Moderate Buy
Current: 902.580
Low
531.00
Averages
553.67
High
580.00
Current: 902.580
Low
531.00
Averages
553.67
High
580.00
About ESLT
Elbit Systems Ltd. is an international technology company engaged in a range of programs across the world. The Company develops and supplies a portfolio of airborne, land and naval systems and products for defense, homeland security and commercial aviation applications. Its systems and products are installed on new platforms, and it also performs platform modernization programs. In addition, it provides a range of support services. The Company's activities include military aircraft and helicopter systems; helmet mounted systems; commercial aviation systems and aerostructures; unmanned aircraft and unmanned surface vessels; land vehicle systems; command, control, communications, computer and intelligence (C4I) systems; intelligence and cyber systems; electro-optic and countermeasures systems; electronic warfare and signal intelligence systems, and various commercial activities. It operates primarily in the defense and homeland security arenas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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See More
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- Strong Earnings Drive: Elbit Systems Ltd. (NASDAQ:ESLT) rose 15.11% this week, showcasing its sustained growth in the defense sector and robust market demand, which enhances investor confidence in its long-term investment value.
- Repurchase Program Incentive: Pinterest, Inc. (NYSE:PINS) gained 16.54% this week after announcing a $3.5 billion share repurchase program, with Elliott Investment Management investing $1 billion, demonstrating strong confidence in the company's future development.
- Analyst Optimism: LyondellBasell Industries NV (NYSE:LYB) soared 17.65% this week as multiple analysts raised their price forecasts for the stock, reflecting a positive outlook on its strong performance and future growth in the chemical industry.
See More
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- U.S. Stock Market Decline: Stock indexes in the U.S. experienced a decline on Friday, with significant drops across major indices.
- Specific Index Performance: The S&P 500 fell by 1.59%, the Dow Jones dropped by 1.33%, and the Nasdaq decreased by 0.95%.
See More
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- Significant Budget Increase: The U.S. Space Force secured a nearly $14 billion budget boost for fiscal 2026, raising its total allocation to approximately $40 billion, which is more than double its initial independent budget of $15 billion in fiscal 2021, indicating a strong governmental commitment to space defense.
- Military Spending Proposal: The administration has proposed increasing total annual military spending to $1.5 trillion by fiscal 2027, with a specific focus on expanding the Golden Dome space-based defense architecture and satellite constellations, aimed at enhancing national security and technological superiority.
- Operational Expansion: Starfighters Space is expanding its operations at Midland International Air & Space Port, planning to double its fleet of F-104 aircraft and GE J-79 engines within 18 months, which will enhance its mission flexibility and responsiveness across the U.S. Southwest, solidifying its position in the aerospace testing sector.
- Economic Impact and Job Creation: AeroVironment plans to invest over $30 million in New Mexico to establish a vertically integrated manufacturing campus, expected to generate over $670 million in economic impact and create more than 450 high-wage jobs over the next decade, thereby strengthening the domestic defense industrial base.
See More
Impact of Iran War on Market Dynamics
- Increased Market Volatility: Following the U.S. and Israel's attacks on Iran, the S&P 500 experienced significant fluctuations over three sessions, dropping sharply on Tuesday before recovering much of its losses on Wednesday, indicating investor sensitivity to geopolitical risks.
- Surging Oil Prices: The conflict has led to a sharp rise in oil prices, and while defense stocks have also gained, the market's reaction to short-term news may impact long-term investment strategies, necessitating cautious responses from investors.
- Investor Guidance: Prominent investor Steve Eisman advises investors to remain on the sidelines, suggesting that the market's short-term reactions may be overblown and that the situation could improve quickly, potentially leading to a drop in oil prices.
- Defense Investment Opportunities: Given the current situation, investing in defense ETFs like the iShares U.S. Aerospace & Defense ETF (ITA) is seen as a good way to gain exposure to increased defense spending, with individual stocks like Israeli drone maker Elbit Systems (ESLT) also worth considering.
See More
Investor Reactions to the Iran War
- Market Volatility Analysis: Since the U.S. and Israel attacked Iran, the S&P 500 has experienced significant volatility, plummeting on Tuesday before nearly recovering losses on Wednesday, indicating the market's sensitivity to geopolitical crises.
- Oil and Defense Stocks Surge: The war has led to soaring oil prices and rising defense stocks, reflecting heightened investor expectations for increased defense spending amid uncertain international conditions.
- Investor Advice: Notable investor Steve Eisman advises investors to remain on the sidelines during the current situation, believing that short-term market reactions should not dictate long-term investment strategies, emphasizing the importance of a long-term perspective.
- Geopolitical Impact: While geopolitical turmoil is common, Eisman points out that the war's impact on the stock market will primarily manifest in specific sectors rather than trigger a global recession, urging investors to focus on industry dynamics rather than short-term news.
See More
U.S. and Israel Strike Iran, Causing Market Turmoil
- Oil Price Surge: The attack on Iran, a major oil exporter controlling the Strait of Hormuz, has led to a significant spike in oil prices, adding uncertainty to global markets and potentially impacting the profitability of related energy companies.
- Defense Stocks Rise: Following the outbreak of war, defense stocks generally increased, with Ondas Holdings and Elbit Systems rising 10% and 7.66% respectively, reflecting strong market demand for defense technology and investor confidence.
- Ondas Holdings Financial Performance: Ondas reported $10.1 million in revenue for Q3, a sixfold increase year-over-year, and is targeting at least $110 million in revenue by 2026, indicating rapid expansion potential in the defense technology sector.
- Elbit Systems Order Backlog: Elbit's order backlog has risen to $25.2 billion, equivalent to over three years of revenue, suggesting that demand for its products may further increase amid ongoing conflicts in the Middle East, supporting its growth outlook.
See More
