How much do people profit from investing in war?

A look into why war is kept alive, and people… not so much.

Recently, Türkiye came up with a decision that surprises many of geopolitics biggest fans — to approve Sweden’s membership into the North Atlantic Treaty Organization (NATO). We’ll not look into why Türkiye decided to put an end to its persistent period of denying Sweden access to NATO, we will look deeper into the issue — war itself.

War as a Catalyst for Change

No, we don’t necessarily mean for the better — although some controversially argue that it is, we simply refer to the fact that war drives countries to make drastic decisions. Take a look at the most recent war, the one happening in Ukraine, for instance.

The global geopolitical dynamics have changed tremendously in response to Russia’s sudden attack on Ukraine. Finland and Sweden, for example, see themselves scraping their prior reservation on joining NATO during the Cold War era.

What happened is that Russia’s move sent a sense of urgency to the Nordic region that they might just be the next target.

Speaking of change in ways of doing things, it would be absurd to not include an honorary mention of how Germany had to revamp its whole energy dependency away from Russia to Norway and its European neighbors.

“Yes, of course, Germany is still dependent on energy imports, but today, not from Russian imports but from global markets,” —  Christian Lindner, Germany’s Finance Minister.

How Russia-Ukraine War Affects Transfer of Arms

The suddenness of the attack took many by surprise. As Russia inches deeper into Ukraine’s territory (and out of it, at some points), the neighboring countries are ramping up their defense spending and arms acquisitions to prepare for the worst. After all, one can only predict how far Russia can go.

Sweden, a (maybe) soon-to-be-ratified member of NATO, ramped up its defense spending as it seeks to grow its defense allocation to 2% of its GDP by 2026. In 2022, its budget proposal for 2023’s spending includes an increase of $1.23 billion in 2022–2023. As of now, its military spending stands at only 1.4% of its GDP.

If you’re wondering where Sweden recently gets the bulk of its arms from, you’d probably have the right guess in mind — who else other than Uncle Sam?

From the chart above, we can see the increasing proportion of Sweden’s weapon imports from the US. Mind you, the data is not presented in its financial value, but rather the volume of arms transferred to the respective country. If you want to know more about the valuation system, you can find out more here.

There is also a general surge of arms export from the US in the year 2022, with Kuwait topping the chart as the top receiver with 2,014 million units (TIV) received, a 256.57% increase from 2021. Ukraine jumped to the 4th spot as the top importer from Uncle Sam with a 4485% increase from 20 million units (TIV) in 2021.

From the chart above, we can see a surge of weapon export from the US by 32% in the year 2022 from 2021. Mind you, that is the highest it has ever been since 1998 (a year after the Congo war started, and also a year after the world saw 25 major armed conflicts erupting globally).

Who stands to benefit from it?

Well, it’s not particularly a question of who, at this point. The obvious benefactors from war are arms manufacturers and the people around them. The real question is — how much? Let’s get to the numbers and see how much arm manufacturers have been making since Russia fired its first bullet.

First, we’ll look into four major US arms manufacturers (although they might not exclusively dwell in arms manufacturing) which are: Lockheed Martin (LMT), Northrop Grumman (NOC), Boeing (BA), and Raytheon Technologies (RTX).

Just for the sake of it, we’ll rank them based on their arms sales in 2021 (not related to Russia-Ukraine):

  1. Lockheed Martin: $60,340 million
  2. Raytheon: $41,850 million
  3. Boeing: $33,420 million
  4. Northrop Grumman: $29,880 million


Their share prices’ movements during the period are as follows:

As you can see, Lockheed Martin, Northrop Grumman, and Raytheon all saw their share price hiking since Russia’s attack on Ukraine on February 24th, 2022 (marked with a vertical line). Lockheed Martin’s share price maintains higher than during the day of the attack, while Northrop Grumman only saw its price dip for a while below its pre-conflict price before going up again. Among the bunch, only Boeing shows a different trend post-conflict, but to date, all of these stocks are standing at a price higher than their pre-conflict prices.

Earnings-wise, we can see that the earnings per share (EPS) year-on-year changes are growing after the conflict. Lockheed Martin dipped for a while in Q2’22 before shooting to more than 200% growth in Q3’22, while Boeing had the most notable growth, from more than -900% in Q3’21 to positive growth in 2022.

How much you would've made if you invested in these companies?

Now, say, you invested $1,000 in these companies’ shares on the exact date of the attack, how much approximately that would be today? We’ll use S&P 500 growth as the benchmark.

If you invested $1,000 in the S&P 500 on February 24th, 2022, you’ll have $1,034.65 now, which is a 3.46% increase since.

Lockheed Martin: $1,238.18 (23.82% — beat the market)

Northrop Grumman: $1,182.81 (18.28% — beat the market)

Boeing: $1,020.48 (2.05% — lower than the market)

Raytheon: $1,080.87 (8.09% — beat the market)

All of the companies apart from Boeing managed to beat the market growth, especially Lockheed Martin and Northrop Grumman. Now, if you ask me, why some would invest in a war, this is why. At a point where the market is shaky, these companies managed to grow rapidly, putting money in the pockets of those who don’t mind investing in weapon manufacturing companies.

Bottom line

To call a spade a spade, war is a very lucrative market. Of course, nothing could compensate for a single life lost — but those who are willing to put their money into this field will see to gain from it. We are not here to argue on the morality of war, one can say that these weapons are necessary to protect Ukraine’s sovereignty, which is valid; another could argue that a weapon is made to take lives, regardless of the purpose, which is also valid. Morality and philosophy aren’t something that we can really explain in numbers, that’s why we are here to explain how war or armed conflicts is fueled — by the gains investors get from it — and the conclusion that we came to: they provide serious money in a time of conflict.

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