Ukraine’s Big Win: Tanks Today, F-16s Tomorrow

Last June, Joe Biden reportedly snapped at Ukrainian President Volodymyr Zelensky over the phone, raising his voice in indignation. 

At issue was the amount and nature of U.S. aid being dispatched to repel the invading Russian forces. 

According to NBC, "Biden had barely finished telling Zelensky he'd just green-lighted another $1 billion in U.S. military assistance when Zelensky started listing all the additional help he needed and wasn't getting."

At that point, Biden told the Ukrainian president he should be more grateful for the work he’d been doing — overcoming increased political opposition that threatened to undermine U.S. support. 

The frustration had been building for weeks, as Zelensky had repeatedly (and publicly) complained that aid wasn’t arriving quickly enough.

So this time, Zelensky responded with a new show of public appreciation through videotaped remarks.

“I had an important conversation with U.S. President Biden today,” he said. “I am grateful for this support. It is especially important for our defense in Donbas.”

Seemingly, it was a watershed moment for the two leaders, and their relationship has only improved since then. 

But what hasn’t changed is Ukraine’s endless appetite for foreign military aid.

And this week, the embattled country landed another big score in the form of tanks.

The United States is now preparing to send M1 Abrams tanks to Ukraine, while European nations are ready to dispatch German-made Leopard 2 tanks.

It’s yet another milestone in aid escalation after the United States responded to Zelensky’s pleas for midrange missile systems by sending HIMARS (High Mobility Artillery Rocket Systems) last fall.

The HIMARS were a game-changer, and, obviously, the tanks will be too.

They could be a key component of a spring counteroffensive, helping breach lines of Russian-dug trenches. 

They’ll also make quick work of their Russian counterparts, which are mostly ineffectual holdovers from the Soviet era. Those that are able to function (which may be only one-tenth of Russia’s fleet) are poorly outfitted and increasingly understaffed.

And yet they’re still not enough. 

Dozens or even hundreds of new Western tanks will not be enough to swing this war decisively in Ukraine’s direction. 

And that’s why Ukrainian officials already have an eye toward their next big get — F-16 fighters.

“We will get F-16s,” Yuriy Sak, an adviser to Ukraine’s Defense Minister Oleksiy Reznikov, told CNBC. “At the moment, more than 50 countries around the world have this platform. I don’t see a reason, or any rational explanation, why Ukraine shouldn’t be getting F-16s or other fourth-generation jet fighters.” 

Sak’s confidence seems well-founded. After all, Ukraine has gradually eroded Western concerns of “escalation” regarding other weaponry up to and including tanks and midrange missiles. 

And several European countries are apparently willing to part with their current fighter jets so long as their donations to Ukraine are backfilled by more advanced fighters.

In fact, at the start of the war, Poland offered to send its Soviet-made MiG-29 fighter jets to Ukraine on the condition that the United States replenish the Polish air force with F-16s. 

That plan was scuttled relatively quickly, because the U.S. thought it was too escalatory. 

A year later, things have changed, and such an idea could be back on the table.

Additionally, Dutch Foreign Minister Wopke Hoekstra said last week that the Netherlands might be willing to part with its F-16s. The country was already in the process of upgrading to Lockheed Martin’s (NYSE: LMT) fifth-generation F-35 fighter. 

And for its part, Lockheed Martin says it's willing, ready, and able to meet any new demand for F-16s.

The company’s chief operating officer, Frank St. John, recently told Financial Times that there was “a lot of conversation about third-party transfer of F-16s.” 

He also said Lockheed Martin is “ramping production on F-16s in Greenville [South Carolina] to get to the place where we will be able to backfill pretty capably any countries that choose to do third-party transfers to help with the current conflict.” 

That’s pretty on-brand for Lockheed Martin, which has been a vital supplier of arms to Ukraine throughout the conflict. 

In particular, the company’s Javelin anti-tank systems helped turn the tides last year by obliterating Russian armor columns — and its HIMARS have been equally devastating. 

Now it’s looking to get even more involved, and it’ll have plenty of opportunities to do so.

Like I’ve been saying for the past year, this whole conflict has really woken the world up to the threats posed not just by Russia but also China, as well as other rogue nations like Iran and North Korea. 

Europe’s defenses have deteriorated badly since the end of the Cold War as complacency set in. 

Now, our Western allies must urgently upgrade their forces, while the United States races to backfill the equipment we’re sending Ukraine.

This has really opened the floodgates for defense contractors.

And if investors really want to profit, they should go further than buying up the big names like Lockheed Martin. 

They should look for cutting-edge suppliers like the ones I cover in my Secret Stock Files service. 

There, I focus on smaller companies that are developing futuristic war-fighting technology that’s yet to go mainstream. 

For example, my latest report there details a company that makes head's-up displays for fighter pilots. 

Its scopes, displays, and helmet visors use augmented reality to keep war fighters aware of any relevant data without distracting them from their target or mission.

The technology even goes so far as to provide X-ray vision in some cases.

You can find out more about that here.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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