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The Pentagon just admitted something that changes everything for defense investors.
We’re running low on missiles — literally running low. The Tomahawk cruise missiles, Patriot interceptors and THAAD systems are being fired faster than factories can replace them.
This isn’t just another headline moment. It’s a fundamental repricing of the entire defense industry, and it’s creating a specific three-phase investment opportunity that separates the headline chasers from investors making real money.
The broader market is already reacting. Oil is rising, traders were spooked overnight and defense stocks opened by screaming higher. These first moves aren’t noise — they’re early signals of capital repositioning around a long-duration military and industrial shift.
We’re on day 4 of Operation Epic Fury, with the U.S. and Israel striking at least 1,250 targets. The escalation has been intense — Iran’s IRGC commander declared the Strait of Hormuz closed, commodity markets jumped and investors rushed into the names most exposed to immediate demand.
Lockheed Martin (LMT) jumped 8% pre-market, Northrop Grumman (NOC) was up 6% and BAE Systems (BA.L) popped 8%. These moves reflect what I call Phase 1 of the restock cycle.
Why Phase One Is Already Priced In
Phase 1 is the inventory drawdown phase. Companies winning today are the ones with existing inventory — Lockheed has Tomahawks, Raytheon (RTX) has Patriot systems and they’re shipping at a phenomenal rate.
This is the obvious headline-driven narrative trade. You might’ve already missed the big pop here.
The real money is in what comes next.
Phase 2 is emergency production, and it kicks in over the next two to eight weeks. The Pentagon is staring at classified reports showing stockpiles are nearly empty.
They’re burning through interceptor systems at an unsustainable rate — shooting million-dollar missiles at hundred-thousand-dollar drones.
But there’s a problem…
The big primes are exceptional at research and development, but they are notoriously slow at mass production. Their manufacturing structures aren’t built for sudden surges, which is why Phase 2 rewards companies capable of scaling immediately rather than companies known for innovation.
This is where the big primes have a weakness. Lockheed Martin and Raytheon are strong at R&D, but the companies with the most leverage in Phase 2 are the ones with factory floor space ready to expand output now.
Think General Dynamics (GD) producing artillery shells and Textron (TXT) building tactical vehicles and munitions. These companies have both the capacity and political flexibility to accelerate production on short notice.
The Multi-Year Restock Is Where the Big Money Lives
Phase 3 is the grand prize — the multi-year restock beginning in a couple months and rolling out over years.
Congress is likely to appropriate billions, if not trillions, to ensure missile shortages never happen again. These aren’t one-off contracts. These are decade-long agreements to expand America’s arsenal and keep factories fully ready.
This is where high-tech specialists shine. L3 Harris (LHX) will benefit from advanced munitions and electronic warfare systems. Huntington Ingalls (HII), the only company building nuclear-powered aircraft carriers, is positioned inside a defense niche with no competition.
There is also a powerful international angle. BA.L offers exposure few investors appreciate. Nearly half its revenue comes from U.S. defense spending, and another meaningful portion comes from Middle Eastern partners that are rapidly increasing orders.
That dual footprint positions it uniquely well for a restock cycle driven by both U.S. strategic needs and regional security pressures.
Here’s what the three-phase framework looks like. Phase 1 is inventory drawdown happening now with LMT, RTX and NOC. Phase 2 is emergency production over the next two to eight weeks with GD and TXT. Phase 3 is multi-year contracts starting in months with LHX, HII and BA.L.
There is a crucial risk factor — duration.
Political leaders have floated timelines ranging from four to five weeks, though even that uncertainty implies volatility. If this conflict stretches toward the high end of expectations, defense stocks could continue climbing. If it wraps up quickly, you may find yourself buying the top of an emotional surge.
Duration could be everything. But the depletion of stockpiles is real, and the restock cycle is unavoidable. The only question is which companies will be most profitable as the money flows through each phase.
Jeffry Turnmire
Jeffry Turnmire Trading
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I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. What to Expect From a Wartime Market
The Iran war is causing a bit of an upheaval on Wall Street.
Some of your favorite tech names are beginning to see less and less of Wall Street’s “love” as capital flows into real economy stocks.
I’m talking safe sectors like:
- Energy
- Health Care
- Food & Beverage
If you’re trading these wartime markets, it’s important your setups don’t wipe out your account when a particular stock sees significant drops.
The way I trade, I’m able to not just stay in the game, but also find opportunities to target extra cash — EVEN when the market is plummeting.
Granted, I can’t make absolute guarantees when it comes to the market…
But if you’d like to do the same…
I’ve built tools to help make an approach like this accessible to just about anyone.
If you’d like to see what I regard as the best one…
