Why Is the U.S. Army Buying $54 Billion Worth of Patriot Missiles From Lockheed Martin?

2 weeks ago 10

Rich Smith, The Motley Fool

Tue, August 11, 2026 astatine 3:51 AM CDT 4 min read

The Iran warfare has done a fig connected U.S. weapons stockpiles -- and finances.

A Center for Strategic and International Studies report released past week estimates that 65% of the 2,330 Patriot missiles the U.S. possessed earlier the Iran warfare began person been utilized up already. Fewer than 800 Patriots stay successful U.S. inventories -- 4 years' worthy of accumulation astatine existent rates, but a fig we tin seemingly expend easy successful little than 3 months of fighting.

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Damage to U.S. bases successful the Mideast was past estimated to person outgo taxpayers $25 cardinal done precocious April, with a further $25 cardinal needed to regenerate mislaid and expended subject hardware. U.S. allies successful the portion are spending billions of dollars replacing Patriot aerial defence missiles utilized to support themselves from Iranian rocket attacks.

And we are, too.

Black and achromatic photograph of a rocket battery.

$54 cardinal for Lockheed Martin

Last month, the U.S. Army announced it plans to bid $53.9 cardinal worthy of caller Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) aerial defence missiles from Lockheed Martin (NYSE: LMT). That's much wealth than the full outgo of the remainder of the warfare astatine past report.

And here's the truly astonishing thing: At $4 cardinal per missile, simply replacing the 1,500 oregon truthful Patriots utilized truthful acold would outgo "only" $6.3 billion. But the subject is looking to walk overmuch much than that -- capable to bargain possibly 13,475 missiles. That would replenish each munitions already expended... and adhd 12,000 more Patriots to the stockpile.

Not each astatine once, certainly. The Army's declaration notes that the $53.9 cardinal would wage for Patriot accumulation implicit 7 years. Still, this marks a melodramatic enlargement successful Patriot buying, and Patriot accumulation arsenic well, arsenic it implies an yearly accumulation complaint astir 9 times faster than the existent rate.

Better missiles outgo much

Another curiosity astir this announcement is that Lockheed Martin announced past period that it plans to present a new version of the Patriot rocket that's cheaper and faster to produce.

Dubbed the PAC-3 Adapted Capability Effector (PAC-3 ACE), the caller rocket would outgo arsenic small arsenic $2.5 million. When Lockheed archetypal announced the ACE, investors sold disconnected the banal -- perchance fearing ACE income would cannibalize MSE income and wounded the company's nett margin. But here's the thing: Lockheed describes the ACE arsenic "complementary" to the MSE -- not replacing it.

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