Citrini Research says markets have been pricing higher defense budgets; the new
tradable theme is which firms can rebuild missiles after combat has depleted
inventories. Real-world fighting has exposed U.S. missile and interceptor
shortages, notably for Patriot and THAAD systems. Citrini frames this as a
second-stage shift: stage one—geopolitical deterioration → budget increases →
defense stocks rally; stage two—weapon attrition → inventory drawdown → capacity
shortfalls → governments must expand production. That expansion will drive a
multi-year defense capex cycle across missile manufacturing, propulsion/engines,
guidance, radar, electronic warfare, satellites, ISR and counter-UAS supply
chains. Citrini cautions missile replenishment is likely a sustained capex cycle
rather than a one-off war rally.
