We’ve all heard of Israel’s “Iron Dome” defense system.
It uses radar to detect and track incoming missiles and interceptor weapons to take them out. Since its debut in 2011, Israel says it has taken out 85% to 90% of the rockets, mortars, and other high-flying threats sent their way.
It’s an impressive setup.
And it looks like U.S. President Donald Trump wants to establish an even more impressive defense system: the land- and space-based “Golden Dome.”
If he has his way, it will begin with $25 billion in initial funding from his Big, Beautiful Bill… with another $150 billion down over the next few years. That way, it will be “fully operational” by the time he leaves office in January 2029.
Secretary of Defense Pete Hegseth says on defense.gov that:
The Golden Dome will progressively protect our nation from aerial attacks from any foe. Within the last four decades, our adversaries have developed more advanced and lethal long-range weapons than ever before, including ballistic, hypersonic, and cruise missiles capable of striking the homeland with either conventional or nuclear warheads. Golden Dome is designed to leverage some past investments but will also use next-generation technology to defend against the evolving and complex threat landscape.
The last two days have been filled with plenty of commentary on this announcement, as expected. It’s an enormous project, to say the least.
It’s just that there’s one angle I think everyone else is missing from an investing perspective… everyone but Wide Moat Research.
The Rationale for the Golden Dome
Neither President Trump nor Defense Secretary Hegseth are wrong in acknowledging the growing threats from less-than-friendly global powers.
After all, Russia is aggressively developing its electronic warfare systems and unmanned surface vehicles. China has been spending billions to advance its own military technology. And both have developed offensive space capabilities that can take out our current military equipment up there as well.
There’s also the ongoing threat of attacks from various points in the Middle East. And North Korea has been working on its nuclear weapons program for decades. In fact, the U.S. Defense Intelligence Agency says that latter country alone “has successfully tested ballistic missiles with sufficient range to reach the entire Homeland."
Moreover, these international possibilities have been known well before 2025. So there is a definite case to be made for upping our defense capabilities – despite what China says.
Chinese Foreign Ministry Spokesperson Mao Ning accused the U.S. of being “obsessed with seeking absolute security for itself,” thereby violating “the principle that the security of all countries should not be compromised” and “undermining global strategic balance and stability.”
China, therefore, urges “The United States to abandon the development and deployment of a global missile defense system as soon as possible.” Which, in my mind, is an excellent reason to implement the Golden Dome.
Russia, for the record, has toned down its initial message. Originally, it called the project “deeply destabilizing” in a joint statement with China. It’s now calling the plan “a sovereign matter” for the U.S. to decide, with Kremlin Spokesman Dmitry Peskov adding that enacting suitable protections “is what all countries do.”
It’s only a matter of what those countries are capable of.
In America’s case, I expect Trump to eventually have his way with this Golden Dome of his. The Big, Beautiful Bill with its initial funding for the Dome has already passed the House and is on the way to the Senate now. So while it might take some further negotiating from here, I consider the deal to be done.
It’s only a matter of who will profit from it and how.
A ‘Front Door’ Invitation Into the Golden Dome Investment Space
America as a country should benefit from the Golden Dome first and foremost. But there are plenty of investment opportunities to consider as well if everything goes according to (Trump’s) plan.
For instance, even now, U.S. defense contractors are lining up to get their piece of the profits. Lockheed Martin (LMT), SpaceX, AeroVironment’s (AVAV) BlueHalo, RTX (RTX), Northrop Grumman (NOC), General Dynamics (GD)…
They’re all indicating their interest are putting together plans to get involved. And I’m sure that whatever contracts are issued will be worth their efforts.
As for me, though, I have a much smaller company in mind.
Having a smaller market capitalization – though not quite a small cap – means it can double or even triple in size and share price much more quickly.
Of course, smaller companies do tend to pose larger risks. It will be more volatile, sudden changes can have a bigger impact on its business, etc. However, the business I’m currently researching directly benefits from some of the large, stable giants listed above.
Those defense contractors pay monthly rent.
That’s right. I’m looking at another real estate investment trust, or REIT, a kind of corporate landlord that’s legally obligated to pay out dividends. This one, specifically, is an office REIT that caters to defense and IT tenants such as:
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General Dynamics
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Lockheed Martin
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Boeing (BA)
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Booz Allen Hamilton (BAH)
The company also operates about 6 million square feet of data center real estate that’s 100% leased. And considering how the Golden Dome, once it’s implemented, will be producing and storing so much more information…
There’s plenty of room for this REIT to expand its data center capabilities as well.
I recently added the company to my small-cap portfolio at Wide Moat Confidential. Paid-up members can read about it right here. And if you’re interested in joining us, learn more right here.
One way or the other, there are multiple ways to gain exposure to the Golden Dome opportunity. I’ll have more to say on the project – and related investments – in the weeks ahead.
Regards,
Brad Thomas
Editor, Wide Moat Daily
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