Israel’s Largest Defence Firm Sees Global Demand Explode

I haven’t put in any buy signals because the shares have doubled since the last one. The question is where they go from here. Israel is at the cutting edge of developing new weapons systems, and some subscribers may not be comfortable with that. Fair enough; it’s your call. I leave the ethics to you. I am looking for exciting shares, and if the CEO is Voldemort, so be it. I think Israel has every right to defend itself. Nobody quibbled when we socked it to the bad guys in the 1940s. If you are going to fight a war, you must fight to win. Nice guys finish last.

This is quite a business.

Elbit Systems is a leading global defense technology company, delivering advanced solutions for a secure and safer world. Elbit Systems develops, manufactures, integrates and sustains a range of next-generation solutions across multiple domains. 

Driven by its agile, collaborative culture, and leveraging Israel’s technology ecosystem, Elbit Systems enables customers to address rapidly evolving battlefield challenges and overcome threats.   

Elbit Systems employs approximately 20,000 people in dozens of countries across five continents. In 2024, the Company reported approximately $1.7 billion in revenues and an order backlog of $22.1 billion.

Elbit Systems, website

Talk about being in the right place at the right time.

We believe our growth geographical exposure to Israel, U.S., Europe and Asia Pacific is unique. During the quarter and beyond, we continue to receive orders for our solutions in artillery, ammunition, electronic warfare, radio system and self-protection solutions, among others.

For example, we won a contract totaling approximately $100 million to provide joint national digital file command centers for European country, a contract totaling $80 million to supply the IMOD with advanced airborne self-protection suits for the F-16 fleet designed to further secure the safety of the F-16 aircraft, enabling it to operate safely in hostile environment.

Another self-protection solution was won this time, American EW [electronic warfare] self-protection solution for frigate installation to NATO European country. Elbit DESEAVER MK-4 Countermeasure dispensing system is an advanced maritime electronic warfare solution designed to effectively counter complex missile attack scenarios.

An additional contract secured to a NATO European country was to supply our ReDrone Counter-UAS solution. This multisensor and multi-mission system is part of Elbit’s advanced EW, radar and seeking portfolio enabling the rapid detection and location of multiple drones simultaneously.

During the quarter, we continued winning contracts for our advanced rocket munition launcher, precise and universal launch system. This time, together with KNDS, it was Germany who selected our pull solution, which has now been selected by multiple European countries, including Germany, the Netherlands and Denmark, among others. Testimony of its effectiveness in enhancing defense capabilities in modern battle field.

Additionally, we won a $130 million contract to yet another European NATO country during the quarter. The scalable pull system enables a variety of ranges to be used starting from 35-kilometer up to a range of 300 kilometers.

These agile and scalable features of this advanced and versatile arterial rocket system, coupled with a couple of launching 100 rocket types from a single platform has been a key win by our customers versus our solution.

In February, we showcased our latest development in air defense technology at the Aero India show. Elbit’s innovative portfolio featured solutions, including unmanned aerial systems, directed infrared countermeasure technology, electronic warfare capabilities, precise guided munition and our helmet-mounted displays among others, I am pleased to say that there was a strong interest in our product display.

We continue to see a growing amount of interest in the Iron Beam system, the high-power laser solution, which is expected to be operational by the end of 2025. The laser component of the Iron Beam solution developed by Elbit is intended to provide a robust defense against a variety of incoming threats.

The $200 million contract announced back in October 2024, positioned Elbit as an Israeli laser center and a global leader in high-power laser technology, both for land and airborne solutions. We shall continue to update you on development in this area.

Butzi Machlis, CEO, Elbit Systems, Q1 2025, 20 May 2025

Prospects for defence companies generally look positive.

I do not see any slowdown in defense spend — investment in the coming few years, not in Israel and neither in Europe.

The main reason for investment is not just to support the current conflict we have, it is also to create deterrence against our enemies here in our region and also in Europe.

And because of that, I really believe that that’s the main reason for the investment, is not the current conflicts which are happening right now, here as well as in Europe, but to create deterrence which can avoid war in the future.

Butzi Machlis, CEO, Elbit Systems, Q1 2025, 20 May 2025

Exciting things are happening.

The Iron Beam, the lens solution should be operational by the end of this year. We are working hard in order to make it happen and there is a lot of progress there. In parallel, we continue to invest in the airborne solution.

We believe that bringing the airborne solution to the arena will create a great — will be a huge change in the way countries are fighting mainly against storms, hundreds of engineers and physicians are working in order to develop the system, and there is a lot of progress there as well.

Butzi Machlis, CEO, Elbit Systems, Q1 2025, 20 May 2025

Israel is at the cutting edge of developments in defence.

The Iron Beam is a ground-based, high-energy laser weapon system developed by Rafael Advanced Defense Systems of Israel. It’s designed to intercept and destroy aerial threats like rockets, mortars, drones, and even some missiles, and it’s intended to be a complementary system to existing air defense systems such as the Iron Dome. The system is expected to be operational in 2025. 

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Israel is socking it to the bad guys everywhere and will never be able to drop its guard. Warfare is increasingly about intelligence, technology, and the capability to produce military ordnance and expendable unmanned weapons delivery systems in vast quantities.

Israel could hardly have advertised its capabilities in all these areas more effectively than by its latest strike on Iran. On 7 October when they raped and murdered those innocent Israeli girls at a pop festival Hamas woke the sleeping tiger with a vengeance.

Warfare is being transformed in the 21st century, evolving into an apocalyptic-scale arms race. Demand is exploding for the companies making the kit to prosecute this new kind of warfare. As Alex Karp of Palantir says repeatedly, it is essential that the good guys, aka us, win this race. The soldier of the future is not a grunt being drilled in a hot parade ground but a geek gazing at a screen or teams of robots synchronising watches on a satellite 100 miles up in the atmosphere.

Maybe the equivalent of a battle tank in future wars will be a mobile factory churning out drones and missiles from deep inside enemy territory. Perhaps it will be a multitude of ideas being conceived by the scientists as I write. Maybe too, as Palantir is finding, the technology being developed so rapidly will be interchangeable between military and civilian applications.

The mind boggles, but the good news is that America and Israel are on our side. In a world of realpolitik, would you make an alliance with Israel or with Palestine, with America or with Russia? Machiavelli would not have hesitated a second before answering that one.