Global Defense Sector Landscape | Idea Farm

Global Defense Sector Landscape

Morningstar

Andrea Burigana, Nicolas Owens, Loredana Muharremi

Research

83 Pages

August 2025

Morningstar outlines how geopolitical tensions and NATO budget targets are driving a new defense supercycle, reshaping procurement, investment, and industry structure.

Key Takeaways

European ramp-up: NATO raises target to 3.5% of GDP, unlocking $1.7T+ in equipment-led spending by 2030.

US outlook: DoD budgets grow with GDP but aim to diversify away from top four contractors.

Industry impact: Aftermarket, drones, and space defense emerge as key revenue drivers for contractors.

Industry Reports Markets

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