‘Very, very strange time’: After a big 2025, what’s next for the defense industry?
A year of rising profits, rising Pentagon demands, and continued Congressional dysfunction sets the stage for another turbulent year.
Lauren C. Williams | December 24, 2025
Industry Acquisition Pentagon
Perhaps the only way to cap a precedent-breaking year for the military-industrial complex is to ring in the New Year with the president.
“Next week, I'm going to meet with the defense prime contractors. I'm going to meet with them here, [in] Florida, and we're going to be talking about production schedules because they're too slow,” President Donald Trump said Monday during a speech announcing plans to build a giant new surface combatant in the next three years. “We have many countries, allies that are wanting to buy. We make the greatest equipment in the world by far, nobody's even close, but they don't produce them fast enough. So, we're going to be meeting with them to talk about the production schedules. We're going to have strong production schedules. And the only way they're going to be able to do that is to build new plants.”
The short-notice summons is par for the course in 2025, which has been a lucrative yet bumpy ride for many defense companies. Policies have changed, and occasionally changed back, in rapid succession, from tariffs to federal personnel cuts that have slowed contracting, to shutdowns and, now, new shipbuilding demands on top of an already accumulating backlog.
But, overall, it’s been a win with defense companies expecting higher returns. S&P's aerospace and defense index, which tracks select stocks, has risen 50 percent for the past year as of Dec. 22, which is good for investors.
https://www.defenseone.com/business/2025/12/very-very-strange-time-after-big-2025-whats-next-defense-industry/410384/?oref=d1-skybox-hp
