Two of America’s largest defense contractors told investors this week that Israel’s brutal war on Gaza will be good for business — with one executive predicting its recent four-fold increase in artillery production will not be enough to meet additional demand.

In the weeks since Hamas terrorists massacred 1,400 Israeli civilians and kidnapped 200 hostages, Israel has pounded the Gaza Strip with thousands of bombs — killing at least 5,700 Palestinians — and cut off food, water, fuel, and electricity to residents. In advance of a planned ground invasion, Israel has demanded more than a million people evacuate northern Gaza — an order the United Nations said would be “impossible… without devastating humanitarian consequences.” 

The United States provides billions in aid to Israel every year, and President Joe Biden recently requested $14 billion in new funding for U.S. military aid for Israel, in addition to $61 billion for Ukraine to help the country combat an invasion from Russia. 

U.S. officials have reportedly raised concerns that Israel has no real plan for an exit strategy after conducting a ground invasion in Gaza, according to the Financial Times. Either way, an escalation to the conflict will undoubtedly benefit defense contractors, which have already experienced a boom in business thanks to Russia’s war in Ukraine driving higher demand for fighter planes, missiles, tanks, artillery, munitions, and bombs.

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Defense firms RTX (formerly known as Raytheon) and General Dynamics, which are America’s second and third largest federal government contractors, have seen their stocks increase more than 10 percent since Hamas’ October 7 attack on Israel. The trend is part of a broader surge in stock performance among defense companies. 

This week, executives at both firms spoke candidly about how Israel’s war on Hamas will mean more business. 

“The Israel situation obviously is a terrible one, frankly, and one that’s just evolving as we speak,” said Jason Aiken, chief financial officer and executive vice president at General Dynamics, on Wednesday. “But I think if you look at the incremental demand potential coming out of that, the biggest one to highlight and that really sticks out is probably on the artillery side.” 

He continued: “Obviously that’s been a big pressure point up to now with Ukraine, one that we’ve been doing everything we can to support our Army customer. We’ve gone from 14,000 rounds per month to 20,000 very quickly. We’re working ahead of schedule to accelerate that production capacity up to 85,000, even as high as 100,000 rounds per month, and I think the Israel situation is only going to put upward pressure on that demand.”

Last week, roughly 100 activists gathered outside of General Dynamics’ weapons plant in Pittsfield, Massachusetts, to protest the Israeli war, holding signs with slogans like, “Genocide: Brought To You By General Dynamics.” Among other military equipment, General Dynamics manufactures nuclear submarines, warships, tanks, and armored fighting vehicles.

Likewise, during RTX’s earnings call on Tuesday, when asked about a likely increase in U.S. defense funding for Israel, company CEO Greg Hayes said the conflict will likely boost orders for missiles. RTX supplies missiles for Israel’s Iron Dome defense system, and produces a variety of other military technologies

“I think really across the entire Raytheon portfolio, you're going to see a benefit of this restocking,” said Hayes. “On top of what we think is going to be an increase in DOD [Department of Defense funding] top line.”

In an interview with CNBC on Tuesday, Hayes added, “The war in Gaza or in Israel, again, a tragic situation — it will eventually lead to additional orders, most likely. Our focus right now is: How do we support the Israeli Defense Force? How do we make sure that they have what they need to be able to defend their country?”