Share prices of many military and intelligence contractors have risen sharply since President Donald Trump’s election.
Investors are betting that an increase in defense spending will provide a windfall for these firms. For instance, General Dynamics, a large contractor that develops combat vehicles and weapons systems for the U.S. military, saw its stock price jump by more than 30 percent in the months after the election. Likewise, Kratos Defense and Security Services, a smaller firm that builds drones for the U.S. Air Force, saw its shares soar more than 75 percent between November 2016 and May 2017.
This trend may be short-lived. Congress still must decide whether Trump’s proposed 10 percent increase in defense spending is practical given current budget constraints.
What is certain is that for-profit military and intelligence firms will remain an integral part of U.S. national defense. My research focuses on the changing