For the first time in decades, many North Atlantic Treaty Organization (NATO) allies are set to increase military spending.
The security of Europe and the west in general is at stake – and those stakes are rising.
Now, there’s no doubt the United States’ spending will continue to constitute the lion’s share of the roughly $1 trillion in combined annual spending by NATO allies.
But this time, of course, war is raging in Ukraine, on several of NATO’s borders. Little wonder several NATO members and other regional militaries are stepping up spending on weapons procurement – I’ll have more about that in a moment.
But suffice it to say militaries both in NATO and without are urgently modernizing and rearming.
Several U.S. and global companies are uniquely positioned to benefit from this spending, and I’ve found a direct way to play all of them. These shares are trouncing the S&P 500 right now, too, up nearly 9% year to date against an 7% loss on the big index.
Here’s the ticker – and why there’s much more upside ahead…
Air Dominance Doesn’t Come Cheap
In any modern war, an air force needs to be able to “own” the skies over the battlefield. The airspace over Ukraine, for instance, is still hotly contested nearly two months into the war.
NATO and European countries watching the war unfold in their own backyard are taking no chances, so aerospace constitutes a huge chunk of this increased spending.
Canada, for instance, is looking to replace its Boeing CF-18 “Hornet” fighters. The Royal Canadian Air Force is close to inking a deal for around $15 billion worth of Lockheed Martin Corp. (NYSE: LMT) F-35 “Lightning” planes.
The German air force is buying 35 Lighting aircraft, and the United Kingdom’s Royal Air Force is on track to purchase 47 of them.
And here in the United States, the White House is asking Congress to approve $813 billion for military spending in fiscal year 2023, which begins Oct. 1. That amounts to a roughly 4% increase from the $782 billion enacted for this fiscal year. The…
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