Defense Contractors Profit from $175 Billion Golden Dome Plan

Major defense contractors are already benefiting from the $175 billion Golden Dome missile defense plan, even though the project is unlikely to be completed by 2029. Spending on the initiative has already begun, which is good news for the industry. Contractors are actively securing contracts and receiving payments, regardless of the Pentagon's testing progress.

According to a research note by Douglas Harned, an analyst, there is a minimal chance that the full system will be operational before the end of Trump's term. However, the flow of funds ensures that defense firms will continue their work. Harned noted that even if the system fails to meet its objectives, components of the project will likely persist, allowing companies to profit from their efforts.

Harned expects several major defense contractors, including L3Harris Technologies, RTX, Northrop Grumman, Lockheed Martin, BAE Systems, and Boeing, to lead in securing contracts for the Golden Dome project. He has given Boeing and L3Harris an “overweight” rating, with a price target of $273 for L3Harris, which is nearly 10% higher than its last closing price. Boeing's target price is set at $249, approximately 25% above its recent close.

Trump initially estimated the cost of the Golden Dome at around $175 billion. However, Harned suggests that the final price tag could be significantly higher. The 2026 defense budget already includes $25 billion allocated for this project. Additionally, the House Appropriations Committee has proposed a 2026 spending bill with an $831.5 billion defense budget, which includes $13 billion specifically for Golden Dome-related missile defense and space systems. This breakdown consists of $8.8 billion for missile systems and $4.1 billion for satellite and space integration.

The Congressional Budget Office has also expressed skepticism, warning that the total cost could reach $542 billion, making it one of the most expensive military defense projects in history. Harned attributes the high cost to the complexity and flexibility required to defend the entire US against a wide range of potential threats. He compares this to cybersecurity, where the system must continually evolve to counter advancing enemy capabilities.

The Golden Dome concept is inspired by Israel’s Iron Dome, which has demonstrated its effectiveness in real-time combat by intercepting attacks from Iran. This has provided valuable insights to US officials on the potential of a functioning missile defense system. Patrycja Bazylczyk, a research associate, emphasized the importance of building inventories now to prepare for more complex threats from countries like Russia or China.

The Golden Dome plan is a revival of Ronald Reagan’s Strategic Defense Initiative, also known as “Star Wars.” This initiative was abandoned due to political resistance and technological limitations. However, with the New START treaty between the US and Russia set to expire and China refusing to return to arms control talks, Trump’s reboot of the plan has garnered significant attention. Both Russia and China have criticized the Golden Dome, warning that it could spark a new arms race.

Within the defense industry, the Golden Dome is seen as a new funding opportunity. Companies that have been marginalized in NASA contracts are now eyeing the Golden Dome as a potential lifeline. The Paris Air Show this year featured a significant focus on defense technology, with around 45% of the exhibition dedicated to it. Major players like Lockheed Martin and Boeing used the event to showcase their readiness to support Trump’s plan.

Tim Cahill, Lockheed Martin’s president of Missiles and Fire Control, highlighted the company’s readiness to contribute to the Golden Dome project, emphasizing their product lines that align with the mission's requirements. However, there is uncertainty surrounding SpaceX’s involvement due to Elon Musk’s feud with Trump. Other smaller private defense firms are also exploring opportunities within the Golden Dome project.