DEFENCE INDUSTRY REPORT - MAY 2025

​May 2025 marked a pivotal month for the global defence sector, characterised by escalating geopolitical tensions, rapid technological advancements, and significant shifts in procurement strategies. From multi-billion-dollar contracts awarded by the U.S. Department of Defence to the unveiling of ambitious missile defence systems like the proposed "Golden Dome," defence companies worldwide navigated a dynamic landscape marked by both opportunity and disruption.

Major U.S. primes, including Lockheed Martin, Boeing, and Northrop Grumman, secured substantial awards related to missile systems, naval platforms, and next-generation aircraft. Simultaneously, a growing cadre of smaller, tech-driven firms gained ground with advanced AI, drone, and augmented reality solutions, signalling a broader transformation in modern warfare priorities. Across Europe and Asia, policy reforms and export ambitions continued to shape defence-industrial strategies, while high-level defence cooperation, including significant foreign military sales, reinforced the West's global posture.

This report consolidates the most significant developments from May 2025, including contract awards, technological breakthroughs, strategic shifts, and the performance of defence equities, providing a comprehensive view of the evolving defence-industrial complex.

Major Contracts & Procurement
U.S. Department of Defense Contracts

• May 9: Lockheed Martin secured a $742M contract for High Mobility Artillery Rocket Systems (HIMARS) 
• May 14:
  • General Dynamics (Bath Iron Works) received a $216M contract for DDG‑51 Destroyer planning services 
  • Northrop Grumman awarded $60M modification under existing agreement.
• May 30: Lockheed Martin Space awarded a $1,002M+ contract modification for Conventional Prompt Strike missile development.

International Deals & Sales

• May 12–13: U.S. State Department approved sale of six Boeing CH‑47F Chinooks to the UAE 
• Saudi Arabia to acquire $142B of U.S. defense equipment.

Tech Initiatives & Strategic Playbooks
Golden Dome Missile Shield

• May 20:
  U.S. President Trump announced the “Golden Dome” – a space-based missile defense system modelled on Iron Dome. Initial down payment of $25B, total cost estimated $175B (or up to $542B over 20 years).
  • Project led by Space Force Gen. Michael Guetlein.
  • Bidders include Lockheed Martin, SpaceX, Palantir, Anduril 

Fighter Jet Evolution

• May 15: Trump floated development of a twin-engine F‑55 warplane and F‑22 Super upgrades .
• May 21 summary / March origination: Boeing’s F‑47 (NGAD) sixth-gen fighter has progressed under a $20B contract, projected service entry by late 2020s.
• Lockheed CEO Jim Taiclet unveiled a “pilot-optional” F‑35 Plus upgrade targeting autonomous ops within 2–3 years.

Smaller Innovators & AI Integration

• Rising demand for AI-enhanced warfare, drones, anti-drone tech, and electronic warfare is driving strong gains among smaller firms, even as legacy primes lag.
• Meta (Facebook) and Anduril teamed up on EagleEye, an AI-enabled AR/VR headset for U.S. Army, targeting a $100M wearables contract.
• Red 6 unveiled ATARS augmented-reality pilot-trainer, and Venus Aerospace tested a rotating-detonation rocket engine.

Industry Strategy & Policy Moves

• May 21: Publication of “2025 Strategy Playbooks” analyzing top U.S. primes (Lockheed, Boeing, GD, Northrop, RTX), highlighting hypersonics, accelerated production, and R&D amid tensions with China 
• UK manufacturers (via MakeUK Defence) are pushing for legally binding offset rules in MOD contracts to ensure 75–90% of contract value goes to UK SMEs 

Summary:

• Lockheed Martin (LMT) ~ $481.69
• Boeing (BA) ~ $210.80
• Northrop Grumman (NOC) ~ $489.41
• RTX (RTX) ~ $139.10
• General Dynamics (GD) ~ $276.48
• L3Harris (LHX) ~ $244.27
• Huntington Ingalls (HII) ~ $226.49

(All prices as of June 7, 2025, UTC.)
Month‑on‑Month:While exact comparisons need prior data, investors.com notes legacy primes are lagging in 2025 YTD, in contrast to sharp performance by smaller, tech-driven firms 

Analysis & Takeaways

1. Space & hypersonics surge – Projects like Golden Dome and Prompt Strike show renewed focus on missile defense and rapid-strike capabilities.
2. AI & autonomy are rising – Wearables, AR training, and unmanned systems reflect a shift from hardware-heavy to software-enabled defense.
3. Strategic consolidation & supply chain pressure – Offset demands in the UK and U.S. policy efficiency pushes may reshape procurement norms.
4. M&A / legacy slowdown – Big primes are challenged by nimble innovators; capital inflows favor agile tech startups.