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| By Sean Brodrick |
Missiles continued to fly in the Middle East this week. Even as a “ceasefire” was announced.
Things may be calming down. Or they may calm further.
But they’re not over. Not by a long shot.
The U.S. is charging toward a record-breaking $1 trillion defense budget, the highest in history.
And that isn’t all that’s going to find its way into top defense suppliers’ revenue streams.
Our NATO allies are also under heavy pressure from President Donald Trump to open their pocketbooks more.
You can’t blame Trump for thinking our erstwhile allies aren’t spending enough. Here’s a chart showing last year’s defense spending.
You can see that U.S. spending outpaces that of everyone else.
China is a distant No. 2 with $314 billion spent in 2024. Its Purchasing Power Parity (PPP) means it gets more bang for its buck.
And we are far outspending our allies.
Why? This is an ever-more dangerous world.
We saw this coming thanks to the War Cycle.
That’s an economic cycle that pushes the world’s nations along an ever-more violent path.
We talked about the War Cycle (and China) in this very space last year.
And now, this cycle is building to a thunderous crescendo.
President Trump has thrown down a challenge to Europe to step up and start spending.
And that spending gap I showed you earlier is starting to close.
Europe is rearming at warp speed.
NATO allies — all except Spain — are committing or preparing to commit to defense spending at 5% of GDP.
That’s not a typo.
It’s more than double the old 2% NATO target.
Below, you can see how much European nations CURRENTLY spend on defense as a percent of GDP.
Current expenses refer to the amount of money countries allocate to defense as part of their regular budgets. Whereas capital expenditures involve spending on new equipment.
Under the proposed defense budgets, Europe is going to increase both — a lot.
Behind the spending spree?
A new era of warfare defined by speed, swarm and sky.
War at Mach 13
Iran fired a wake-up call when it launched its Fattah-1 hypersonic missiles at Tel Aviv.
The Fattah-1 is reported to travel at speeds of Mach 13 to 15, which is equivalent to 10,000 to 12,000 mph.
This made it clear that the hypersonic age is here.
China and Russia already have hypersonic arsenals.
The U.S. doesn’t … yet. But we are racing to catch up.
The country pumps billions into ballistic missile programs like Lockheed’s (LMT) ARRW and Raytheon’s (RTX) HAWC.
Hypersonics are stealthier, faster, and deadlier than anything before — a missile that arrives before the radar even knows it's coming.
That’s How I Like to Invest, Too
I consult the War Cycle, market and economic cycles, the commodities cycle and more to spot under-the-radar ideas.
Thanks to these cycles, I get a bead on those opportunities before they become visible to most investors’ eyes.
And right now, three cycles are converging all at once.
The last time this triple convergence happened in 1913:
- The U.S. raised its defense budget an eye-popping 4,000% in the next few years.
- Great Britain’s budget went up over 3,300% — to an astounding 35% of national GDP.
- And over $7.5B in today’s money was spent in the year that followed — just on machine guns alone.
But these billions don’t flow to old military technology.
It almost all pours into the latest, most advanced tech.
In this brand-new video presentation, I reveal five elite, cutting-edge military stocks that I believe will carry the day when it comes to this triple cycle convergence.
These are truly below-the-radar ideas.
And you’ll only find them all in one place right here.
Here’s another whose flight path is becoming more evident with each new day.
Drones: The New Face of Combat
From the fields of Ukraine to the skies above Gaza, drones are rewriting the rules of war.
These are weapons of surveillance, assassination and terrifying swarm strikes.
Kamikaze drones have become the poor man’s cruise missile.
They can level the playing field for nations and insurgents alike.
As a result, drone spending is exploding higher.
Militaries worldwide are funneling billions into fleets that fly further, strike harder and coordinate autonomously.
The U.S., China, Russia, Israel, Iran, Ukraine and more are all pouring money into next-gen drone tech.
Spending on military drones is forecast to rise at a 12.2% compound annual growth rate through 2030.
Twelve percent a year might not sound like much. But this year’s expected $25.5 billion turns into $45 billion in five years at that rate.
Forty-five billion lets you do a lot of high-tech recon!
Belgium's defense minister compared the revolutionary impact of drone warfare to the invention of gunpowder.
As European officials pledged to boost drone production for Ukraine, Theo Francken told reporters:
"I really believe that this is the future of warfare, like gunpowder was in the Hundred Years War, like an industrial revolution was in the First World War, and like nuclear capacity was in the Second World War."
Meanwhile, Ukraine's government has set the target of producing 4.5 million military drones in 2025.
Here on the front lines of what I’m calling World War Now, I’m also calling for …
The Rise of the Anti-Drone Arms Race
As drones become diabolically more effective, the use of anti-drone tech is exploding, too.
Think jammers, laser turrets, electronic nets, even drones that hunt other drones.
The anti-drone market is expected to quadruple by 2030.
It’s set to reach $11 billion annually, as militaries scramble to defend against the increasingly cheap and deadly threat.
The U.S. sent over $700 million worth of counter-drone gear to Ukraine in 2024 alone.
Now Israel is ramping up anti-drone deployments.
And NATO is embedding drone countermeasures across Europe’s eastern front.
Lock and Load for this Megatrend
We’re watching a full-spectrum defense reset:
- Budgets are exploding — from Capitol Hill to Warsaw.
- Europe is finally militarizing — hard.
- New weapons are changing everything we know about speed, visibility and power projection.
This isn’t just an arms race. It’s an arms leap.
And you can go along for the ride.
You can buy smaller-cap and midcap stocks, like the kind I recommend in my Supercycle Investor publication.
Alternatively, you can invest in a basket of defense stocks through an ETF like the iShares U.S. Aerospace & Defense ETF (ITA).
ITA has a Weiss Rating of “C,” a dividend yield of 0.69% and a total expense ratio of 0.4%.
Look at that thing blast off!
I mentioned ITA the last time I talked about the War Cycle.
If you bought it then, you’re up some 36.5%.
That means you’re vastly outperforming the 7.5% gain in the S&P 500 over the same time frame.
You can buy it now. Or you can wait another year and see how much more you missed as the War Cycle ramps up to Mach 13 speed.
I know what I’ll be doing. You can get all the details here.
Best wishes,
Sean Brodrick
P.S. As the War Cycle ramps up, defense stocks are set to deliver more bang for your buck. Especially, I believe, these five.
