To The Moon

Why Defense Stocks Lockheed Martin, AeroVironment, and Rada Electronic All Popped‌ ‌$Lockheed Martin(LMT)$ +‌5.94% ‌$AeroVironment(AVAV)$‌ +14.10% ‌$Rada Electronics(RADA)$‌ +12.94% Europe is sending weapons to Ukraine -- and buying even more for itself. What happened Russian military forces attacked neighboring Ukraine last week, and prompted a strong response from the West. In addition to diplomatic condemnation and economic sanctions, we are now seeing a military response -- of sorts -- as nation after nation announces weapons shipments to bolster Ukraine. What's more, NATO nations are beginning to respond to the crisis with promises to increase defense spending of their own. As this news filters out, defense stocks are going up, and as of 11:15 a.m. ET: Lockheed Martin ( LMT 5.94% ) has gained 5.3%, AeroVironment ( AVAV 14.10% ) is up 7%, and tiny Rada Electronic Industries ( RADA 12.94% ) is doing best of all -- up 14.5%. So what This all seems a natural reaction to the news. At last report, more than a dozen NATO nations have announced they will send military equipment to Ukraine -- everything from helmets and bulletproof vests to machine guns, anti-tank missiles, and ground-to-air anti-aircraft missiles as well -- to support its defensive war. The European Union has even promised to supply Ukraine with fighter jets. All of this will be immediately helpful to Ukraine. At the same time, the bigger story -- and much more relevant to the defense stocks named above -- is that Europe itself is shifting its stance on military spending. Of particular note, over the weekend German Chancellor Olaf Scholz told the German Bundestag (its lower house of parliament) that Germany will immediately add $112 billion to its 2022 defense budget -- roughly tripling the size of the defense budget this year -- and going forward, commit to spending in excess of 2% of its gross national product on defense. Now what How much of this tidal wave of cash ultimately gets spent on Lockheed Martin fighter jets, AeroVironment drones, and Rada avionics (used in both fighter jets and drones) remains to be seen, but the trajectory of defense spending within NATO is clear: It's going up, and it's going up dramatically. Right now, it's hard to pick the precise winners and losers, as specific areas of the German (and other European) militaries winning new investment have yet to be announced. For now, investors are simply reacting to FOMO -- fear of missing out -- and buying every kind of defense company they can get their hands on. Before you decide whether you should buying Defense Company, understand the situation is almost Important. Avoid FOMO -- fear of missing out.