FT reported on investors' distrust of the growth of the American military-industrial complex

Investors are selling off shares of leading US military companies due to their limited production capacity and the risks of underfunding, despite the growing demand for weapons amid the escalation in the Middle East. This was reported on April 25 by the Financial Times (FT) newspaper.

"Revenue growth for these defense companies will be limited not by demand, but by production capacity," said Ron Epstein, a defense and aerospace analyst at Bank of America.

The newspaper writes that the stock prices of Lockheed Martin, Northrop Grumman, RTX, L3Harris and General Dynamics fell by an average of 10% after the start of the US and Israeli military operation against Iran. The rapid expenditure of ammunition in recent months has highlighted the gaps in their production.

Investors are not responding to the growth potential of companies amid geopolitical instability due to concerns that the need to dramatically replenish US military reserves will only exacerbate existing difficulties associated with limited production capacity, the newspaper notes.

It is noted that the draft budget for 2027 presented by US President Donald Trump with doubled military spending to $1.5 trillion does not add confidence to investors. They doubt that Washington will actually agree on a record amount, given the criticism of Trump's project in Congress. The expert stressed that, given the upcoming midterm elections, the chances of moving the budget forward are even lower.

As the Financial Times notes, investors also fear that large American companies will not be able to respond in a timely manner to changing demand in the global market, while modern conflicts have demonstrated the effectiveness of low-cost autonomous technologies like UAVs.

The situation of military contractors may worsen amid promises by U.S. Secretary of War Pete Hegseth to radically overhaul Pentagon procurement practices after he criticized major suppliers for delays and going over budget. According to the newspaper, it became known earlier that the Trump administration has already held talks with automakers General Motors and Ford in an attempt to attract them into the supply chain of military equipment.

The first since the end: The US Congress is losing the support of voters on the eve of the elections

Rising prices, the war in Iran and accusations of harassment have reduced the credibility rating of parliamentarians to a minimum.

On March 6, US President Donald Trump announced that three months ago, the American military-industrial complex began to increase the pace of arms production. He also announced a meeting with major American defense companies. During the event, the topics of production and supply schedules were raised.

The Agency for Security Cooperation (DSCA) announced on April 6 that the American arms manufacturer Raytheon has received a contract worth $709 million for the production of ammunition for France, Germany and other US allies.