This European Arms Deal Could Lead to Big Profits
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| By Michael A. Robinson |
When we talked earlier this summer, I said that Ukraine has become what may well be the very best proving ground for defense drones in the world today.
Ukraine has led the way in deploying cheap, effective drones to develop a significant military force with a new generation of weapons, a relatively small pool of soldiers and often limited resources.
And they’ve done it with a mix of legacy technologies and new networked battlefield strategies and tactics.
They’re even selling their drones to other nations!
Today, I want to explore the next step for Ukraine’s efforts as it launches a new arms manufacturing deal to build out key artillery equipment on its own soil.
A couple months ago, President Trump announced that he wanted Ukraine to build its own Patriot missiles.
He since backed away from that idea. But it may have spurred European NATO partners to speed up some of their talks with Ukraine about building Ukraine’s defense manufacturing base.
Now, there’s a new deal from a storied global defense leader that could be a big spark and a new chapter in Ukraine’s war efforts … and the firm’s global business.
A Top-Selling Missile System
Right now, one of the most successful anti-ballistic missile and electronic warfare interceptors is the Patriot missile system.
The U.S. has deployed them in Ukraine and Israel. And many other nations — including Gulf State allies — have purchased them.
A typical Patriot system costs about $3 billion. Each Patriot missile costs about $4 million.
The U.S. has about 15 Patriot battalions. There are 19 nations that have the weapons system, with about 1,000 total launchers.
This is one of top-selling U.S. weapons systems in the world.
The trouble is it was a great system within the technology of the last three decades.
But now, it finds itself stuck straddling the tech fence.
On the one hand, the systems are highly effective and there are few substitutes that work as well.
On the other they’re very expensive.
They also require months of specialized training.
And now, the munitions are in increasingly short supply.
The prospects of getting permission to build Patriots in Ukraine would be huge. But Ukraine is used to promises from defense firms that never materialize.
And Ukraine is in the middle of a war. Time is of the essence.
They need to source their defense equipment locally.
Beyond Ukraine’s Army of Drones
This is where the new announcement with my old favorite BAE Systems (BAESY) comes in.
BAE has announced that it will license its technology for its towed L119 Light Gun artillery system to Ukraine and help set up manufacturing in Ukraine.
Also, as another challenge to the Patriot monopoly, France’s President Emmanuel Macron offered to do the same with its Aster interceptors.
They’re the European version of the Patriot missile family, built byMBDA.
This is a very critical time for European defense, with the Trump administration expecting NATO countries to carry more of the alliance’s defense commitment.
But the thinking was, NATO members would simply buy more U.S. equipment, not scale their own defense sector and buy from each other.
This has become so significant that at a recent air show in England, three key U.S. Department of Commerce representatives showed up to encourage sales of U.S. defense systems to the Europeans.
Also, Lockheed Martin’s (LMT) venture capital wing has actually dedicated $100 million to invest in European defense technology companies.
And now, this agreement with Ukraine could be a watershed event for other arms manufacturers who were too scared to invest in facilities in a war zone.
It will also be a huge real-time testing ground for BAE equipment.
A Global Partner … and an Alternative
BAE Systems ranks among the world’s 10 largest defense contractors, with operations spanning roughly 40 countries, including the United States.
And it regularly works alongside America’s defense giants.
For example, BAE and Lockheed Martin are collaborating on technology designed to help military drones operate together in coordinated swarms.
But BAE’s opportunity goes well beyond supplying weapons for Ukraine.
The war has become a proving ground for a new generation of defense technology. And BAE can take what it learns there and apply it to military programs around the world.
We’re already seeing that happen.
The firm recently unveiled Brontanax, its new collaborative combat aircraft concept.
Think of these aircraft as unmanned wingmen that can fly alongside advanced fighters, extending their reach while keeping pilots farther from danger.
Led by the UK, Italy and Japan, the Global Combat Air Programme, or GCAP, is developing a sixth-generation combat aircraft and the advanced systems that will surround it.
BAE sits at the heart of the British side of the program.
And its potential market could extend well beyond those three countries.
That matters because GCAP is shaping up as one of the West’s most important alternatives to U.S.-led next-generation fighter programs.
For BAE, that creates an opportunity measured not in individual weapons orders, but in decades of aircraft production, electronics, upgrades and support.
A Versatile Modern Drama-Free Pick
This is a stock that offers us stable earnings growth, averaging 12% over the last three years, or more than three times as fast as the U.S. economy.
And the shift out of the famous big-cap tech names could inject interest in this type of stable player in a key sector with support from governments around the world.
In other words, this is the type of stable stock you can count on to shore up your portfolio over the long haul.
Best,
Michael A. Robinson
P.S. If you’re looking for more under-the-radar opportunities, you’ll want to free up your afternoon on Tuesday.
You see, at 2 p.m. Eastern, my colleague Gavin Magor will be showing off his wildly successful U-AI system.
More importantly, he’ll show you why a 75-day profit window is about to open just days from now … and how to take advantage of it.
1https://www.nytimes.com/2026/07/31/us/politics/trump-ukraine-patriot-missiles.html
3https://www.baesystems.com/en/article/first-british-designed-collaborative-combat-aircraft-unveiled
