Israel’s stock market is witnessing an unexpected surge despite regional conflict. Defense technology giant Elbit Systems has become the most valuable Israeli company on the Tel Aviv Stock Exchange, driven by rising military spending and global demand for advanced weapons and drones.
The rally signals a powerful shift where defense companies are now shaping the direction of Israel’s financial markets.
Elbit Systems Becomes Israel’s Most Valuable Company
Israeli defense technology firm Elbit Systems recently reached a market valuation of about $40 billion, making it the highest valued Israeli company listed on the Tel Aviv Stock Exchange. The company overtook long time market leaders such as pharmaceutical giant Teva and several major Israeli banks.
The milestone followed a strong rally in Elbit’s share price. Its stock jumped roughly 5 percent in early March trading, continuing a sharp rise seen over the past year.
In fact, the company’s share value has surged dramatically.
Key numbers behind the rise:
• Market value now around $40 billion
• Share price increased more than 150 percent in the past 12 months
• Nearly $4 billion added to its valuation in just two days
This growth reflects investor confidence in the global defense sector as conflicts reshape security priorities worldwide.
Elbit Systems, headquartered in Haifa, develops advanced military technologies used by armed forces across many countries. Its products include surveillance drones, battlefield communication systems, precision weapons and electronic warfare equipment.
War and Global Security Concerns Drive Demand
The surge in Elbit’s value is closely linked to rising global defense spending.
Since the October 7, 2023 attacks and the conflicts that followed, Israel has expanded military operations on several fronts. This environment has increased demand for weapons systems and battlefield technologies.
Countries across Europe and Asia are also boosting military budgets amid geopolitical tensions. As a result, defense manufacturers are receiving more orders.
Elbit’s recent business momentum highlights this trend.
• A backlog of orders worth more than $25 billion
• Large contracts from international customers
• Growing demand for drones and advanced battlefield systems
Analysts say unmanned aerial vehicles and electronic warfare technologies have become essential tools in modern warfare. These systems have played a major role in conflicts such as the war in Ukraine and ongoing tensions in the Middle East.
The growing reliance on drones and smart defense systems has placed companies like Elbit at the center of global military modernization.
Tel Aviv Stock Exchange Riding the Defense Wave
The success of Israel’s defense companies is also lifting the broader Tel Aviv Stock Exchange.
Over the past year, the main index in Tel Aviv has surged sharply, surprising many global investors. In some periods it has risen more than 70 percent despite political uncertainty and regional tensions.
Several factors explain this unusual trend.
First, defense and security companies now hold significant weight in the Israeli market. When their shares rise, the entire index benefits.
Second, investors often view military technology firms as resilient during times of conflict.
Defense spending tends to rise during geopolitical crises, creating steady demand for companies in the sector.
Financial analysts say this has turned Israel’s stock market into a major destination for investors looking to benefit from global security spending.
Another development strengthening the market is the arrival of major technology companies on the exchange. For example, global cybersecurity firms have explored dual listings in Tel Aviv to connect with Israel’s strong tech ecosystem.
Europe Emerging as a Key Market
One of the biggest opportunities for Elbit Systems now lies in Europe.
European governments have significantly increased defense budgets following the Russia Ukraine war and rising tensions with Iran. Many countries are modernizing their military capabilities and purchasing advanced systems.
Reports indicate that Elbit is negotiating new contracts with European partners, including potential deals with Germany for rocket launcher systems.
The company already supplies a wide range of equipment to European forces.
Some of its most widely used technologies include:
• Surveillance and combat drones
• Airborne defense systems
• Electronic warfare platforms
• Precision artillery and rocket systems
European demand has already boosted Elbit’s sales. In previous financial reports, revenue from European customers accounted for more than a quarter of the company’s total income.
Not Without Controversy
Despite its financial success, Elbit Systems has also faced criticism and activism abroad.
Pro Palestinian groups in several countries have targeted the company, accusing it of supplying military equipment used in regional conflicts. Some protests have taken place near company facilities in Europe.
There have also been legal cases related to protests at Elbit sites in the United Kingdom.
At the same time, supporters argue that the company represents a crucial part of Israel’s national security industry and a major contributor to technological innovation.
Defense technology developed by Israeli companies often finds applications in civilian sectors such as aviation safety, cybersecurity and surveillance systems.
What Analysts Expect Next
Market analysts expect Elbit Systems to continue expanding.
Forecasts suggest the company could reach around $7.9 billion in annual revenue with steady double digit growth expected in the coming years.
Several trends are likely to support this growth:
• Rising global military spending
• Increasing use of drones and autonomous systems
• Demand for advanced electronic warfare technologies
• Expansion into new export markets
However, risks remain. Regional instability and political tensions can affect investor sentiment and government budgets.
Still, many experts believe defense technology companies will remain among the strongest performers in global markets.
For now, the remarkable rise of Elbit Systems shows how modern conflicts and technological warfare are reshaping financial markets as much as battlefields.
As Israel’s defense sector continues to grow, the Tel Aviv Stock Exchange may increasingly reflect the fortunes of the global security industry. What do you think about defense companies driving stock market growth during times of conflict? Share your thoughts in the comments and join the conversation online.
