A Primer on Defense Tech - 2026 Edition.

研报英文原文证据摘录

A Primer on Defense Tech - 2026 Edition.

high double digits if not triple

digits, far above the mid-to-high-single-digit pace of established counterparts. These Neoprimes

are taking share from legacy primes by concentrating in the fastest-moving niches, from

autonomy and space to software and munitions, and by building software-defined, scalable

hardware. We see the broader defense tech market expanding steadily in the high single digits

but see the newest entrants capturing an outsized slice. We think that one of the more durable

stories is capability, as these entrants are pushing autonomy, software, and rapid iteration to the

center of modern systems and increasingly setting the pace the rest of the industry has to match.

Catalysts Are Aligning: We see multiple catalysts converging at once, which is why we view

the current momentum as a durable cycle rather than a one-time spike. Acquisition reform, led

by the Executive Order on Modernizing Defense Acquisitions and a Department of War overhaul,

is pushing the Pentagon to buy at historic speeds and is lowering the barrier for non-traditional

vendors. Record AI and autonomy budgets and new program lines such as Golden Dome and

Unleashing American Drone Dominance are unlocking demand for emerging players and legacy

primes alike. Finally, a reopened IPO window across 2025 and 2026, with names such as

Karman, Voyager, AIRO, Firefly, and Swarmer, is validating the model in the public market at

premium multiples. We think these forces are amplifying one another and resetting who captures

the next decade of defense spend.

Electronics Replenishment Is the Quiet Engine: Inside the ~$125B Electronic Systems pool,

a large and underappreciated share of near-term dollars is non-discretionary replenishment this