Lockheed Martin Corp.
Lockheed Martin’s stock rose 2.77% to $469.27 on Friday, despite recent Pentagon cuts to F-35 orders. Meanwhile, Israel launched a surprise air raid on Iran’s nuclear and military sites, sparking global concern.
As a result, investors anticipated growing demand for advanced weapon systems like Lockheed’s F-35 jets. The Israeli strike used F-16 and F-35 aircraft to hit Natanz and other high-value targets across Iran.
Therefore, the assault killed top Iranian commanders and nuclear scientists tied to Tehran’s atomic program. Notably, Israeli Prime Minister Benjamin Netanyahu confirmed the attack, code-named “Rising Lion,” began early Friday morning.
The operation also involved Israeli jets targeting Iran’s strategic command centers, missile facilities, and nuclear plants. Iranian state media confirmed Major General Hossein Salami and General Mohammad Bagheri died in the strikes.
Additionally, the attack killed several scientists working on Iran’s sensitive nuclear projects. In response, Iran’s Supreme Leader Ayatollah Ali Khamenei promised swift and harsh retaliation against Israel.
Secretary of State Marco Rubio
Soon after, Iran launched over 100 drones in retaliation, raising fears of broader regional conflict. Consequently, US Secretary of State Marco Rubio clarified America did not assist or participate in the strike.
Despite earlier losses, Lockheed’s shares rebounded, gaining $12.67 per share at market close Friday. Earlier this week, the Pentagon’s reduced F-35 orders had caused Lockheed’s shares to fall nearly 6%.
Still, the F-35 remains Lockheed Martin’s most valuable program, generating over half its aerospace revenue. Each F-35 costs between $82 million and $110 million depending on the variant and configuration.
Furthermore, the aircraft offers stealth, data fusion, and precision engagement capabilities unmatched by competitors. Thus, it serves missions involving air dominance, ground strikes, and tactical surveillance for allied nations.
For example, Israel operates 50 F-35s and plans to purchase 25 additional units in coming years. Ultimately, heightened tensions in the Middle East reinforced Lockheed’s role as a key defense supplier.
Fighting Falcons
The Israeli Air Force’s reliance on the F-35, which supplements its current fleet of over 230 F-16 Fighting Falcons, is evidence of the preeminence of Lockheed Martin in the global market for fighter jets.
The F-16, a multirole fighter introduced in 1978, is a reliable mainstay of 24 nations, with more than 4,500 produced and a unit cost of around $63 million for the current Block 70/72 model.
The F-16’s flexibility, price, and agility have allowed it to remain effective in supporting the F-35 stealth missions. During Friday’s attacks, Israeli F-35s conducted precise strikes on Iran’s fortified nuclear facilities.
Meanwhile, Israeli F-16s targeted missile production plants, demonstrating Lockheed’s jets’ complementary roles in combat. At the same time, US-Iran nuclear talks remained frozen, increasing regional instability.
President Donald Trump warned of “massive conflict” if Iran’s uranium enrichment continues unchecked. Moreover, Israeli Defence Minister Israel Katz called the strikes “preemptive” to stop Iran’s nuclear ambitions.
Humanitarian Fallout
According to the UN’s IAEA, the Natanz facility, 225 kilometers from Tehran, came under air attack. However, the full extent of damage to Natanz remains unclear, pending further inspection. Iranian state media, meanwhile, reported that civilians, including children, had been killed in residential areas of Tehran..
As a result, international voices urged restraint to avoid wider humanitarian fallout. Following the strikes, Lockheed Martin’s stock rose alongside the broader defense sector rally.
Furthermore, Raytheon Technologies rose 1.8%, and Boeing climbed 2.1% in Friday trading. During times of geopolitical uncertainty, investors move to defense contractors with the expectation that they will receive more orders for weapons systems.
The S&P 500 Aerospace & Defense Index gained 1.9%, showing the sector’s strength amid national budget-cutting efforts. At the beginning of the week, reports of lower F-35 orders dampened Lockheed’s future prospects, citing the program’s $428 billion lifecycle cost and its sustaining 254,000 jobs in the United States economy.
The F-35’s global reach, with orders from 14 nations and more than 1,000 units, offsets some of the effects of US reductions. Israel, one of the largest operators, has already employed the stealth of the aircraft in strikes against Iranian-held targets in Syria and Lebanon.
Three variants of the jet—F-35A
The jet’s sophisticated ability to avoid detection, plus its ability to send live information to ground forces and naval forces, makes it uniquely suited to penetrating well-protected airspace like Iran’s.
The three variants of the jet—F-35A for conventional takeoff, F-35B for short takeoff and vertical landing, and F-35C for carrier use—provide unparalleled flexibility; nevertheless, critics point to high maintenance expenses and recurring software glitches as ongoing issues.
Iran’s air force relies, however, on vintage F-4 Phantoms and F-14 Tomcats manufactured in the United States before 1979, with Russian-supplied MiG-29s and Su-24 fighter planes. These are not stealthy and do not have the sensor technology of Lockheed aeroplanes, leaving Iran exposed to Israel’s technological superiority.
In a 2024 Pentagon report, China’s J-20 stealth fighter, a potential rival to the F-35, is in its infancy, with minimal combat use and mediocre sensor fusion. Production delays and sanctions have plagued Russia’s Su-57, another fifth-generation contender, thereby strengthening Lockheed’s dominance in future air combat.
F-117 Nighthawk
Lockheed Martin itself had previously weathered geopolitical and economic turmoil. F-16 sales skyrocketed in the 1980s as tensions during the Cold War increased, and the stealth technology of the F-117 Nighthawk revolutionised warfare in the 1991 Gulf War.
The F-35 program has been faulted since its inception in 2001 for its cost overruns, pegged at $1.7 trillion for its lifespan by the Government Accountability Office.
Notwithstanding, its unparalleled functionalities have led to agreements with partners including Japan, Australia, and NATO member states, thereby enhancing Lockheed’s order portfolio, which amounts to $173 billion.
Furthermore, the firm’s free cash flow of $5.3 billion for the year 2023, coupled with a dividend yield of 2.62%, persists in attracting investors seeking stability amidst fluctuating market conditions.
The market response on Friday is a harbinger of the broader economic implications of the Israel-Iran conflict. Brent crude oil futures increased 9% to $78 a barrel, mirroring fears over supply disruptions in the Middle East, which produces a third of the world’s oil.
Increased energy prices can push inflation higher, making the monetary policy situation of the Federal Reserve tougher. Prices of gold reached a three-month high as investors poured money into safe-haven assets, setting the tone of uncertainty that has engulfed global markets.
Iran’s Drone Attacks
Israel’s multi-layered air defense stopped Iran’s drone attacks, showcasing the interconnected nature of modern warfare. Additionally, the US-donated Patriot system played a vital role in intercepting multiple aerial threats.
Meanwhile, Israel’s Iron Dome handled short-range rockets launched during Iran’s retaliation. At the same time, the US-subsidised Arrow system targeted longer-range ballistic missiles with high accuracy.
Still, the International Institute for Strategic Studies warned about Iran’s stockpile of 100+ medium-range ballistic missiles. Rising tensions may therefore increase demand for Lockheed’s cutting-edge missile defence technologies worldwide.
Notably, Lockheed’s THAAD system already protects Israel and Gulf allies from high-altitude missile threats. Consequently, each escalation further highlights the growing need for integrated and reliable missile defense networks.
The airstrikes have triggered mixed reactions internationally. Saudi Arabia denounced the attack as posing a threat to regional security, with Iran cooperating with Hamas and Palestinian Islamic Jihad.
National Security Council
The UN Security Council has summoned an emergency meeting, and Iran’s foreign ministry has blamed America for being in collusion as Israel’s major arms provider.
Rubio’s declaration confirmed the absence of US troops in the conflict, but President Trump’s National Security Council convened to evaluate the situation, demonstrating Washington’s careful balance between backing Israel and refraining from direct involvement.
Lockheed Martin’s contribution to Israeli defence hardware extends beyond fighter aircraft. The corporation delivers precision-guided bombs, radar systems, and cybersecurity solutions that are vital for Israeli military dominance.
Its C-130 Hercules transport planes and AH-64 Apache attack gunships, which were not used in Friday’s raids, reflect the corporation’s diversified portfolio.
The firm’s headquarters in Bethesda, Maryland, remained silent during the stock’s rise, referencing its most recent investor presentation, which forecasts 4–5% sales expansion in 2025, driven by global demand.
The Pentagon’s cuts in the F-35 are due to budget reallocations toward new threats like hypersonic missiles and cyberwarfare, reports published on Tuesday said.
Next Generation Air Dominance
The Air Force requested a cut from the originally planned 48 planes to 24, shifting focus to next-generation platforms like the Next Generation Air Dominance [NGAD] program, for which Lockheed is the top contender.
Despite the slowdown, the F-35 remains critical to US and coalition forces, with some 990 aircraft expected globally by 2024. The international partners of the program, including the United Kingdom and Canada, have reaffirmed their commitment, mitigating setbacks at home.
Despite ethical concerns, Israel’s deployment of Lockheed aircraft in high-profile missions enhances the company’s image. Various lobby organizations have condemned arms sales between Israel and the U.S. over civilian deaths in past wars, including Gaza.
Iranian state media announced that children were among the fatalities in Tehran; however, independent sources have yet to confirm this fact. Such reports can hasten debates about U.S. foreign policy and defense exports, which can harm Lockheed’s public perception.
The market’s favourable view of Lockheed Martin is a change from its previous frustrations. In February last year, X posts had speculated that Trump had suspended F-35 deliveries to Belgium for Ukraine’s F-16 requirement, sending stock down 11%. Although unsubstantiated, the rumour highlighted the company’s vulnerability to political volatility.
Similarly, a March report stated that Portugal, Canada, and Poland had cancelled or postponed their F-35 orders; however, Lockheed later clarified that talks were ongoing. These events reflect the complex processes involving geopolitics, defense spending, and investor sentiment.
Conclusion
The unpredictable politics of the Middle East will determine the stock price of Lockheed Martin in the coming years. A protracted Israeli-Iran war has the potential to accelerate orders from US allies, especially from the Gulf, where Saudi Arabia and the UAE fly F-16s and are considering F-35s. Conversely, an Iranian-American diplomatic breakthrough in talks, however unlikely, would moderate the demand for weapons of offence. The company’s July 29, 2025, quarterly earnings report will reflect its fiscal health amidst these uncertainties.
Lockheed Martin’s share value surged due to Israel’s aggressive attack on Iran, revealing a paradox: while business in the United States falls, world crises enhance the company’s importance. The F-35 and F-16, having tested their prowess in one of the most volatile regions in the world, demonstrate Lockheed’s technological prowess and strategic value. However, as the Middle East balances precariously on the brink of chaos, uncertainties remain.
Will rising tensions solidify defense stocks as sound investments, or will the humanitarian costs of war overtake the industry’s gains? Investors seem to be betting on the former currently, but the consequences reach far beyond the borders of Wall Street.
References
- Lockheed Martin Investor Relations – lockheedmartin.com/investor
- Pentagon Budget FY2025 – DoD – defense.gov/fy25budget
- IAEA – Iran Nuclear Monitoring – iaea.org/iran
- Israeli Defense Forces – Updates – idf.il
- Press TV—Iranian State Media—presstv.ir
- S&P 500 Aerospace Index – MarketWatch – marketwatch.com/aeroindex
- Defense Security Cooperation Agency – U.S. Arms Sales – dsca.mil
- IISS – Iran Missile Capabilities – iiss.org/iranmissiles
- UN Security Council – Press Releases – un.org/securitycouncil
- Raytheon Technologies – Official Site – rtx.com
- Boeing Defense – Official Site – boeing.com/defense
- Brent Crude Oil Price – Trading Economics – tradingeconomics.com/brent
- Gold Prices – Kitco – kitco.com/gold
- U.S. GAO – F-35 Report – gao.gov/f35
- Defense News – F-35 Global Sales – defensenews.com/f35
- NGAD Program – CRS – crsreports.congress.gov/ngad
- Israel MOD – Air Force Procurement – mod.gov.il
- Reuters – Middle East Conflict – reuters.com/mideast
- BBC News – Israel and Iran – bbc.com/middleeast
- CNBC – Lockheed Martin Stock – cnbc.com/lmt
About the Author
