The Fourth Great Arms Race Has Just Begun

Dear Reader,

Since the end of World War II, the world’s great powers have gotten into the nasty habit of engaging in very costly technological competitions in the field of defense. 

The term "arms race" has historically referred to the nuclear arms race, which pitted the U.S. and the USSR against one another for four decades between the late '40s and late '80s, but in reality, that is just one of several arms races that have taken place in modern history.

In the late 1970s, the technological trophy up for grabs was for automated payload delivery systems — cruise missiles. 

Both the U.S. and the Soviet Union spent billions developing and manufacturing these pilotless aircraft, refining their guidance systems and restructuring military doctrine around them. 

The Carter administration even canceled the B-1 Lancer program in favor of these newly arrived "smart munitions" — a move which largely dictated how wars were fought from the '80s onward. 

After the cruise missile race came the stealth race, which kicked off with the U.S.’s introduction of the F-117 Nighthawk. 

The F-117 "stealth fighter" was actually a bomber and possessed no defensive armaments to speak of outside of its then-novel radar-absorbent exterior. 

Forever Bull Market: The Race to Military Dominance

It made its debut over Panama in 1989, and ever since, no battlefield involving the U.S. was ever without stealth aircraft. 

It would be 20 years before any competing defense industry was able to counter with anything approaching the capabilities of the first generation of American stealth aircraft. 

Today, Russia and China, our two primary military rivals, have a number of stealth-capable planes and unmanned aerial vehicles (UAVs) in planning and production. 

But even as the Eastern powers scramble to achieve parity in the arena of stealth, another arms race is already underway, and the early leader isn’t who you might have expected. 

Today’s arms race involves hypersonic missiles — the bastard child of ballistic missiles and cruise missiles. 

They’re launched from the ground or from the air, rocket up into the thinnest layers of the atmosphere, deploy warhead-bearing "glide vehicles," and reenter the Earth’s atmosphere at up to eight times the speed of a rifle bullet, maneuvering toward a target that has almost no chance of responding. 

The Chinese have taken an early lead in this race with their introduction of the DF-17. 

This ground-based missile has a 1,000-mile range, which it can cover in an astounding 11 minutes — giving whatever is on the receiving end virtually no time to react. 

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Russia Has Been Fielding Them for Years

The Russians, despite their apparent inability to achieve strategic goals in Ukraine, are also on the board in the hypersonic missile game with their own air-launched offering, the KH-47M2 Kinzhal. 

With a range of over 1,600 miles, it can be carried and deployed by relatively light interceptor aircraft such as the MiG-31 Foxhound. 

Russia has used this Mach 10-capable weapon repeatedly in Ukraine, sending a clear indication that the technology is well off the drawing board and in full-scale deployment. 

Officials at the Department of Defense have not been blind to these developments. 

Earlier this week, the U.S. Army’s 5th Battalion, 3rd Field Artillery Regiment deployed its first long-range hypersonic missile battery in Cape Canaveral, Florida, as part of a full expeditionary launch rehearsal.

Which means our hat is in the ring, and, as could be expected, it comes with a massive funding package — nearly $5 billion earmarked for hypersonic missile development in 2023 alone. 

As the case is with any technological race, the real winners are going to be the shareholders of the companies that lead the charge. 

With hypersonics being a highly specialized field, there are only a couple viable companies out there able to truly capitalize on the federally funded trend. 

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Lockheed Martin Corporation (NYSE: LMT) is an obvious contender, as it’s the largest defense contractor by a large margin and therefore has interests in everything. 

However, for a company that big, hypersonics will only make an incremental difference in the bottom line.

There is, however, a more focused way to invest in the hypersonic sector.

One company in particular has made a name as one of the world’s most innovative developers of high-performance rocket motors. 

My colleague and occasional rival, Jason Simpkins, has been studying the hypersonic missile trend since well before it became a trend. 

For years now, he’s been talking about the Chinese edge, the danger it poses to major military assets like our foreign bases and our 11 carrier strike groups, and what we’re going to do to respond. 

He believes that the company I just mentioned is the absolute most efficient way to take advantage of this new arms race. 

Few know about it, yet it could hold the key to American hypersonic parity.

The problem is that with each passing day, the financial press is pushing this story harder and harder. 

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That means the investment dollars are going to start flowing in as the retail masses start catching on to the magnitude of this opportunity. 

Jason’s approach is novel, but the secret won’t stay a secret for long. 

To help his readers navigate this complex issue, Jason recently published a video that explains all the ins and outs in plain language. 

The information in this video may scare you, but in the end, you’ll know the facts and understand how you can turn this potential crisis into a real-life investment windfall. 

These races only come around once every couple decades, so don’t miss out. 

Get instant access to Jason’s video right here.

Fortune favors the bold,

Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.