Since the beginning of the year, it has seemed as though not a day goes by without some large defense contract being announced by one of the public companies. From reactive armor to drone cameras to overhaul of F16 aircraft engines for "a foreign air force", Israel’s defense industry has accumulated an exceptional orders backlog at the start of 2026.
January ends only on Saturday, but from "Globes’" examination it emerges that so far companies such as Elbit Systems (TASE: ESLT; Nasdaq: ESLT) and Next Vision (TASE: NXSN), together with their peers making up the new Tel Aviv Defense Index, have managed to report fourteen deals worth an aggregate NIS 2.2 billion ($700 million), and investors’ optimism about record-breaking defense stocks is correspondingly high. The index is up nearly 30% so far this month.
Top of the orders table for January is Elbit Systems, the largest defense company on the Tel Aviv Stock Exchange, which reported on Monday this week that it had won a follow-on order worth NIS 715 million ($228 million) for the supply of its Iron Fist active protection system to General Dynamics for the upgrade of US Army Bradley fighting vehicles. Two weeks ago, Elbit Systems reported another large contract, worth over NIS 860 million ($275 million), for electronic warfare protection for helicopters with an Asia-Pacific country.
Last Thursday, the second largest defense company in market cap terms, Next Vision, a producer of cameras for drones and UAVs, reported a NIS 63 million ($20 million) order. January is not over yet, but this is the fourth order reported by the company this month, bringing the aggregate to NIS 330 million ($107 million).
On Friday, Aryt Industries (TASE: ARYT), which produces shell fuses, took a significant step forward with the announcement that its subsidiary Reshef Technologies had signed a commercial agreement with a defense company in a Western European country. The collaboration will focus on sales to European NATO countries. The foreign company will receive marketing exclusivity on the fuses in certain NATO countries.
The list goes on: Ashot Ashkelon (TASE: ASHQ) reported a large contract with Israel’s Ministry of Defense for refurbishing and building transmissions for the IDF’s Namer armored personnel carrier worth NIS 125 million; Bet Shemesh Engines (TASE: BSEN) reported a NIS 68 million contract for refurbishing engines for the F16 aircraft of "a foreign army"; C Mer Industries (TASE: CMER) signed agreements relating to homeland security worth NIS 50 million.
The flood of deals coincides with the relative quiet on the local security front since the agreement for the return of Israeli hostages held by Hamas was signed in early October. This is despite renewed tension with Iran and the deployment of US forces in the region. The companies are no longer required to supply the needs of the local market only, and the stream of orders from overseas has built up rapidly.
If you want peace
Talking to "Globes", a senior defense industry source does not attribute the growing demand just to the end of the war. "Everyone understands today that for there to be peace you need a strong military. If you go back in time four years, you see that there were countries that hardly invested in defense at all. That was particularly true in Europe.
"After a decade of quiet, several bitter conflicts erupted around the world. Countries understand that whoever is weak will get hurt. It’s true that people point directly at the war in Ukraine or in the Middle East, and it’s clear that these were triggers, but in fact no country wants to be exposed.
"The defense companies have reached the stage at which large orders are coming in fast. Next Vision, for example, came along at the right time with a good product and high production capabilities. From what they report it’s clear that they are capable of supplying the contracts that they are signing." Despite the positive trend, however, the source says that there are many problems in the supply chain. In some places the situation is becoming worse because of the growing demand.
Index up 50%
The rise in the Tel Aviv Defense Index this month to date is almost three times the rise in the flagship Tel Aviv 35 Index in the same period. The index covers nineteen defense company stocks, none of which has fallen in the month to date. It has risen by nearly 50% since it was launched in November.
Elbit Systems, the largest of them, has risen 24% in January to reach a market cap of NIS 104 billion, meaning that it has added NIS 18 billion to its value since the start of the year.
The highest return among the stocks in the index is that of Aerodrome Group (TASE: ARDM), which produces data gathering software for UAVs. The company’s share price has risen by 126% since the start of the year. Thirdeye Systems (TASE: THES), which produces electro-optic systems for drones, has risen 95%; Ashot Ashkelon has risen 53%; and Aryt Industries has risen 46%.
Published by Globes, Israel business news - en.globes.co.il - on January 27, 2026.
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