Israel-Hamas war could drive up DoD investments, says BofA

Following news of Israel declaring war on Hamas, BofA noted that the U.S. has a strategic stockpile, described by the New York Times as “vast and little known,” of U.S. weapons housed in Israel. This “potentially longer conflict” may force the U.S. government to increase investment in the defense industrial base to build munitions and weapon systems as, ultimately, the U.S. will be supplying munitions, missiles, and anti-missile systems to two allies in Ukraine and Israel, the analyst tells investors. The “more immediate focus of investors” due to this potential increase in defense spending are General Dynamics (GD), Northrop Grumman (NOC), Lockheed Martin (LMT), Raytheon Technologies (RTX) and L3 Harris (LHX) given their exposure to missiles, missile propulsion systems, land systems and munitions, added the firm.