The Unexpected Surge in Global Defense Spending: Key Insights

In 2024, global military expenditure soared to an unprecedented $2.72 trillion, showcasing the most significant annual spike since the Cold War era. The U.S. Department of Defense's recent budget request of $3 billion for hypersonic weapons underlines a steadfast commitment to enhancing next-generation strike and defense capabilities. Companies heavily engaged in this expanding defense technology landscape are none other than VisionWave Holdings (NASDAQ: VWAV), Kratos Defense & Security Solutions (NASDAQ: KTOS), Ondas Holdings (NASDAQ: ONDS), Parsons (NYSE: PSN), and Elbit Systems (NASDAQ: ESLT).

The Center for Strategic and International Studies (CSIS) estimates that establishing a robust homeland missile defense system, under the 'Golden Dome' initiative, could demand as much as $3.6 trillion over the next two decades. The Aerospace Industries Association is advocating for consistent funding directed toward innovative missile warning satellites and resilient space infrastructures, highlighting these as key priorities for 2026.

VisionWave Holdings has made strategic moves, including an agreement to acquire a 51% controlling interest in C.M. Composite Materials, an Israeli certified aerospace manufacturer. C.M. specializes in structural composite assemblies critical for Israel's multi-layered missile defense systems, notably the Iron Dome and Barak 8. In fiscal year 2025, C.M. reported revenues of approximately $17.3 million and net income before tax of $3 million. An independent assessment positioned the company at a valuation of $50 million.

Douglas Davis, VisionWave's Interim CEO and Executive Chairman, expressed optimism regarding the acquisition, stating that this move augments their existing infrastructure with certified aerospace production. He highlighted the potential of integrating advanced software acceleration into the company's manufacturing base to create a pioneering industrial model.

The recent acquisition also complements VisionWave's $10 million investment in the qSpeed-Mine™ platform, designed to optimize mining processes. Notably, C.M. sees India as a pivotal growth market, aligning its strategy with India's ongoing developments in multi-layered air defense systems, including Barak 8 enhancements.

In further endeavors, VisionWave's subsidiary, Solar Drone, has initiated discussions in Italy to expand its drone cleaning solutions, targeting specific markets in the Middle East. This follows successful demonstrations of their technology and a distribution agreement covering operations in Italy and Spain.

Additionally, VisionWave demonstrated the efficiency of the SaverOne's RF-based detection system for vulnerable road users, identifying pedestrians and cyclists in real-world scenarios. The company has formed a strategic exchange valued at $7 million with SaverOne, potentially leading to a 51% equity stake.

Meanwhile, in the realm of defense contracting, Kratos Defense was awarded a significant contract via the Department of War's Joint Hypersonics Transition Office, focusing on thermal protection systems for hypersonic vehicles. This undertaking will leverage years of hypersonics expertise to hasten the development of U.S. hypersonic technologies.

In the Asia-Pacific region, Ondas Holdings secured a strategic defense contract via its subsidiary Airobotics, aimed at delivering autonomous unmanned aerial capabilities. CEO Eric Brock emphasized the need for advanced solutions to address evolving threats in national security missions.

Parsons, with a long-standing partnership with the U.S. Army Research Laboratory, was awarded a $125 million Task Order contract to enhance capabilities in high-performance computing and network security. CEO Dr. David Tyler highlighted Parsons' commitment to innovation in support of national security.

Elbit Systems, for its part, reported quarterly revenues of $1.92 billion, marking a 12% surge year-over-year, largely driven by rising global defense demands. The company's order backlog reached a remarkable $25.2 billion, with a significant portion coming from international clients, underscoring its position as a leader in defense solutions.

As military expenditures continue to rise globally, these developments signal a transformative period for defense capabilities and technology, shaping the landscape of military preparedness and strategic security for years to come.