The Long Game in Eastern Europe: Why Defense and Cybersecurity Are the Plays of the Decade

The sentencing of Australian national Oscar Jenkins to 13 years in a Russian prison this week is not just a geopolitical flashpoint—it’s a stark signal of the prolonged conflict now baked into Eastern Europe. Russia’s prosecution of foreign fighters like Jenkins, framed as “mercenaries” under its legal system, underscores a strategic shift: this war is no longer about a quick territorial grab. It’s a protracted battle for influence, legitimacy, and resources. For investors, this means one thing: the defense and cybersecurity sectors are entering a golden era of demand.

Why the Conflict Is Here to Stay—and Why That’s Good for Investors

Russia’s approach to foreign fighters—classifying them as unprivileged combatants and denying them prisoner of war status—is a calculated move to criminalize Western support for Ukraine. This legal warfare, combined with Moscow’s relentless territorial advances and military reforms targeting NATO, ensures the conflict will persist far beyond 2025.

The economic and political costs are already clear: civilian casualties in Ukraine surged 84% year-over-year in April 2025, while Russia’s artillery production capacity (via new plants like Biysk Oleum) has expanded by 50%. This is not a war that will end quickly. For investors, this means sustained defense spending by NATO nations and Ukraine itself—a trend that’s already outpacing global economic cycles.

Defense Contractors: The Winners in a Prolonged Conflict

Western defense firms are uniquely positioned to capitalize on this prolonged demand. NATO’s 2% GDP defense spending pledge is no longer a guideline but a self-fulfilling prophecy, as allies race to modernize arsenals and counter hybrid threats.

Both stocks have outperformed the S&P 500 by over 120% since 2020, driven by orders for F-35 jets, missile defense systems, and drone tech.

• Top Plays:
• Lockheed Martin (LMT): Prime contractor for F-35s and hypersonic defense systems.
• Raytheon (RTX): Leader in air defense (Patriot missiles) and cybersecurity.
• Boeing (BA): Modernization of legacy systems (e.g., Apache helicopters) for NATO allies.
• Kratos Defense (KTOS): Specializes in low-cost drones critical for reconnaissance and combat.

Cybersecurity: The New Front Line

The conflict isn’t just fought with tanks and drones—it’s a digital war. Russian hackers have targeted energy grids, banks, and infrastructure, while NATO nations are fortifying their cyber defenses.

PANW’s revenue grew 27% YoY in Q1 2025, driven by U.S. government contracts. CRWD’s enterprise software now protects 95% of Fortune 500 companies.

• Top Plays:
• CrowdStrike (CRWD): Real-time threat detection critical for military and energy sectors.
• Palantir (PLTR): AI-driven data analytics for intelligence agencies.
• Palo Alto Networks (PANW): Firewalls and cloud security for defense contractors.

Geoeconomic Hedges: Energy Independence and Critical Minerals

The conflict has exposed global vulnerabilities in energy and supply chains. Investors should pivot to assets that reduce reliance on Russian resources and support defense tech.

• Energy Independence:
• NextEra Energy (NEE): Leader in renewable energy infrastructure, reducing fossil fuel dependence.
• Cheniere Energy (LNG): U.S. liquefied natural gas exporter capitalizing on Europe’s energy shift.

NEE has outperformed XOM by 240% since 2015, reflecting the energy transition’s inevitability.

• Critical Minerals:
• Lithium (for batteries), rare earth metals (for missile guidance), and cobalt (for defense electronics) are in high demand. Firms like Lithium Americas (LAC) and MP Materials (MP) are key plays here.

Underweight Russia-Exposed Assets—Now

Investors should avoid sectors with Russian exposure, as sanctions and reputational risks are here to stay.

• Avoid:
• Oil majors like BP (BP) or Shell (RDSA) with Russian operations.
• ETFs like RSX (Russia TR), which have lost 90% of their value since 2022.

Conclusion: The Conflict Is the New Normal—Invest Accordingly

The Jenkins sentencing isn’t an isolated event—it’s a bellwether of Russia’s strategy to prolong the war through legal and military means. For investors, this is a decade-long opportunity in defense, cybersecurity, and geoeconomic resilience.

Act now:
- Overweight: Defense contractors (LMT, RTX), cybersecurity firms (CRWD, PLTR), and energy independence plays (NEE, LAC).
- Underweight: Russian-linked assets and traditional fossil fuel giants.

The stakes are existential for Eastern Europe—and for investors who want to profit from a world remade by conflict. The question isn’t whether this war will end soon. It’s whether you’re positioned to win while it doesn’t.