In this article, we will be taking a look at the 12 most advanced countries in missile technology. To skip our detailed analysis, you can go directly to see the 5 most advanced countries in missile technology.

Whenever the world is at war, defense companies profit. And right now, global conflicts are at an alarming stage, starting with Russia’s invasion of Ukraine in February 2022. The war has now been going on for 1.5 years with no end in sight, and Ukraine’s ability to push back Russia has been driven by major contributions in terms of weapons and aid from some of the top 20 most advanced countries in missile technology, and led by the U.S., which alone has contributed around $76.8 billion from January 2022 to July 2023, according to the Council on Foreign Affairs.

As the U.S and European countries provided assistance to Ukraine, the demand for weapons continued to increase significantly, and defense stocks outperformed the broader market in what was a tough year for stocks in 2022. One defense stock in particular heavily outperformed every FAANG stock, which declined by an average of 25%. Lockheed Martin Corporation (NYSE:LMT) gained over 40% in 2022 in a bear market, heavily impacted by higher weapons demand as a result of the Russia-Ukraine war, and is a major supplier to several of the most advanced countries in missile technology. Similarly, the recent attack by Hamas on Israel which resulted in the deaths of over 1,300 people and Israel’s ensuing brutal response which has already seen the deaths of thousands of Palestinians saw Lockheed Martin Corporation (NYSE:LMT) add $23 billion in market capitalization. Geopolitical uncertainty has also seen stocks of other defense companies rise by an average of 6.5% following the Hamas attack.

In the last month, Lockheed Martin Corporation (NYSE:LMT) has seen its share price increase by nearly 8%, though even then, its overall stock price has fallen by nearly 7% YTD 2023. In its Q2 2023 earnings call, the company’s CEO mentioned its supplies to Europe and Israel, while also focusing on Australia, stating “Denmark’s program of record calls for 27 F-35A aircraft. Also in September, the Czech Republic chose to become part of the global F-35 Lightning 2 program, and the U.S. State Department approved a possible $5 billion foreign military sale to South Korea for up to 25 F-35 Joint Strike Fighters. Earlier in the quarter, Israel announced that we’ll buy an additional 25 F-35s, which will add a third squadron and increase its F-35 fleet to 75 aircraft. Additionally, in August, Lockheed Martin was selected by the Australian Department of Defense as their strategic partner for their Air 6500 program Phase 1. This transformational Pathfinder program will deliver the broadest scope of joint all-domain operations, or JADO, in the free world and will completely revolutionize the way the Australian defense force operates. By connecting Australian systems and platforms that operate across air, space, land, sea, and cyber domains, we expect that Air 6500 will set the blueprint for future military operations worldwide.”

With the fragility of peace in several regions across the world, the global defense and missile industry sees no signs of slowing down. According to The Business Research Company, the missile industry is expected to grow at a CAGR of 6.4% and will be worth over $40 billion. Global defense spending is reaching record levels every single year and according to PwC, elevated geopolitical risks should see a significant increase in defense spending in 2023, as defense budgets increased by double-digits in many countries. This should also be positively impacted by improvements in the global supply chain which impacted defense production in 2022. This is why in 2022, revenue in the top six U.S. defense companies declined by 3% even though demand continued to increase.

One of the biggest missile companies in the world is RTX Corporation (NYSE:RTX). Despite this, RTX Corporation (NYSE:RTX) has had a terrible 2023, with its stock price plummeting by over 28% YTD 2023, with production issues plaguing its earnings.

ClearBridge Dividend Strategy made the following comment about RTX Corporation (NYSE:RTX) in its Q3 2023 investor letter:

“On the downside, shares of industrials company RTX Corporation (NYSE:RTX) underperformed significantly. On July 25 RTX announced it had discovered a manufacturing defect in some of its jet engines. RTX would have to ground the engines, replace the parts and reimburse the airlines for the downtime.

While this development weighed on the stock, our active management of the position meaningfully reduced the size of the blow. Earlier in July we had significantly trimmed our position to reflect some cyclical risks, so we were relatively less exposed when shares sold off following the announcement. When RTX delayed a scheduled update in early September, we interpreted it as a modestly negative development and further pared our position. When the update came, the stock sold off significantly on news the debacle would amount to around $3 billion over three years — the high end of investor expectations.

As we sit here today, we think the market’s reaction to RTX is likely overdone. $3 billion is a large sum, but the company’s market cap has declined over $30 billion since first releasing the news in late July. While this is a black eye for the company and will create headwinds for some time, we think it likely that the current level will mark a durable low and see opportunities to add back a small amount of the RTX we sold at higher prices earlier in the summer.”

The U.S. is currently aiming to combine funds for Ukraine and Israel, its closest ally in a bid to thwart Russia and Hamas, while indirectly also impacting Iran. Israel has already warned that the war could take several months even as the situation in Gaza has been called beyond catastrophic by several major international humanitarian organizations. Additional threat from the militant organization Hezbollah in Lebanon and proxies from Iran are threating a major spillover of the conflict, and Northrop Grumman Corporation (NYSE:NOC), one of the best defense stocks to buy right now is a major supplier to not just to Israel but also to some of the countries with the best missile technologies in 2022. Among defense companies, Northrop Grumman Corporation (NYSE:NOC) has seen one of the best stock performances in the last month, with its share price rising by nearly 14%.

Harding Loevner Global Equity Strategy made the following comment about Northrop Grumman Corporation (NYSE:NOC) in its Q1 2023 investor letter:

“Our other purchase was Northrop Grumman Corporation (NYSE:NOC), a US defense contractor whose stock price experienced a pullback. We like that Northrop has a larger presence than its rivals in the most favorable subcategories of the defense industry-namely, nuclear weapons, space systems, and what’s known as C4ISR (which stands for Command, Control, Communications, Computers. Intelligence, Surveillance, and Reconnaissance). C4ISR refers to digital systems that translate data picked up from different sensors-such as an incoming hypersonic missile or advancing troops-into a common format, and then escalate key information to the right people These differentiated technologies are especially relevant in a time of increased geopolitical tensions. Northrop also benefits from large barriers to entry in this stable industry, which should enable continued strong earnings and cash flow.”

Methodology

To determine the most advanced countries in missile technologies, simply taking a look at the number of missiles by country doesn’t suffice as some nations only have very rudimentary missiles. In fact, according to the Arms Control Association, only 31 nations possess ballistic missiles while only 9 countries are known or thought to have nuclear missiles, which of course make up our top 9. For the remaining 3, we have ranked them based on the quantities of their most advanced missiles, as well as the range, and assigned each country a score.

12. Syria

Insider Monkey score: 31

Syria has been the location of a proxy war fought between major world powers for a decade now, and its own military has strengthened in the same time as well, with the SS-1-E (Scud-D) currently under development and expected to have a range of up to 700 km.

11. Saudi Arabia

Insider Monkey score: 40

Saudi Arabia is one of the biggest purchases of arms in the world, which has allowed it global influence. The Royal Saudi Strategic Missile Force is a separate force responsible for the commissioning of long-range missiles.

10. South Korea

Insider Monkey score: 43

To combat North Korea’s military developments, South Korea hasn’t remained far behind in establishing itself as one of the countries with the most advanced missile technology in the world .

9. North Korea

Insider Monkey score: 45

North Korea isn’t considered a serious threat by many mainly because of the antics of its leader, but it has actually become one of the most advanced countries in missile technology in the world, with a possession of operational missiles with a range of up to 1,500km while also continuing to work on the development and testing of missiles which could have a range of 10,000 – 15,000 km. Since 2022, North Korea has tested more than 100 missiles!

8. United Kingdom

Insider Monkey score: 49

Like most European countries with some of the best missile tech in the world, the UK has also provided missiles to Ukraine, which Russia said were used to attack the city of Luhansk.

7. Israel

Insider Monkey score: 51

Israel is the biggest beneficiary of U.S. aid in the world, and is now one of the countries with the best air defense systems in the world with the Iron Dome, used to knock out Hamas rockets. Now that Israel has declared war on Hamas, though it’s resulted more in the destruction of innocent Palestinians as opposed to militants, it’s continuing to receive significant aid and support from the U.S. and Europe.

6. France

Insider Monkey score: 59

One of the world’s major missile powers, France also supplied Ukraine with long-range cruise missiles, and additionally also agreed to provide Armenia’s air defences with missiles and radar tech.

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Disclosure: None. 12 most advanced countries in missile technology is originally published on Insider Monkey.