We’re in a Race for Our Lives

This summer was notable for clashes with Russia and China over Ukraine and Taiwan, respectively. 

And amid that backdrop, the United States advanced a multibillion-dollar push to develop new super-weapons capable of competing with our adversaries.

Indeed, with world order thrown into chaos, the U.S. rushed to complete tests for four different hypersonic weapons this past summer, registering one failure and three successes.

In May, the Operational Fires (OpFires) program run by the Defense Advanced Research Projects Agency (DARPA) successfully executed its first flight test of a hypersonic weapon at White Sands Missile Range in New Mexico.

That test marked the first use of a Marine Corps logistics truck as a medium-range missile launcher. The trucks are widely available and extremely mobile, so they make a good platform for rapid deployment. 

The OpFires program is scheduled to have another round of flight tests and complete a critical design review later this year.

Secondly, in July, DARPA successfully tested its Hypersonic Air-Breathing Weapon Concept (HAWC).

The HAWC is a hypersonic cruise missile that launches from a bomber. This test featured Raytheon Technologies’ version of the vehicle, which is competing against a Lockheed Martin version.

In March, Lockheed’s vehicle set a record for hypersonic flight under scramjet power, achieving about 327 seconds of hypersonic flight. In that time, the vehicle flew 300 miles at an altitude of 65,000 ft. 

Raytheon’s version was also successful flying for more than 345 miles at an unspecified hypersonic speed.

And finally, after three testing failures in 2021, the Air Force’s Air-Launched Rapid Response Weapon (ARRW) system conducted two consecutive successful flight tests in May and July.

Lockheed Martin is behind this program as well. It’s another air-launched hypersonic vehicle that’s intended to travel 500 miles in just 10 minutes when fired from a B-52 bomber. 

The July test completed the booster test phase of the experiment and it’s now set to enter full system testing.

The Air Force wants ARRW to reach early operational capability in 2023.

Additionally, the Air Force is pursuing a hypersonic cruise missile — just another of more than 70 hypersonic programs taken up by the Pentagon in an effort to catch Russia and China, which have already deployed similar weapons.

And I do mean deployed. 

Russia and China aren’t just testing; they’re live with these cutting-edge weapons. 

Russia first deployed a hypersonic short-range ballistic missile, the Kinzhal, in 2017. And in 2019 it rolled out its hypersonic boost-glide vehicle, the Avangard.

In March, Russia became the first country to use hypersonic weapons in combat, firing a Kinzhal into a Ukrainian arms depot. 

The country followed up with another attack in May — this time deploying three Kinzhal missiles from a bomber that laid waste to civilian targets (including a hotel and shopping mall) in the port city of Odesa.

Russian President Vladimir Putin also announced on July 31 that the Zircon, a sea-launched hypersonic cruise missile, would be deployed in August.

China, meanwhile, deployed the Dongfeng-17 (DF-17), a road-mobile hypersonic boost-glide system, in 2020.

Beijing hasn’t gone so far as to use them in combat yet, but it did fire a few over Taiwan after Nancy Pelosi visited last month.

The DF-17 also made an appearance at the 95th anniversary celebration of the People’s Liberation Army. 

It’s pretty much settled at this point that the missile would be used to target U.S. aircraft carriers in the South China Sea or Taiwan Strait should China abandon all pretense and invade. 

That’s why the Pentagon raised its hypersonic project funding from $250 million in FY2017 to $3.8 billion in FY2022.

And its most recent request piled even more on top of that, taking the total to $4.7 billion.

The Pentagon estimates the cost of a single hypersonic weapon ranges from $40 million to more than $100 million.

So there’s a lot of money on the table — and no shortage of ways to take advantage if you’re an investor. 

Like I said, there are more than 70 hypersonic projects currently on the books and they’re being spearheaded by all the usual suspects — Lockheed Martin (NYSE: LMT), Raytheon Technologies (NYSE: RTX), and Northrop Grumman (NYSE: NOC).

In fact, in addition to the aforementioned HAWC and ARRW program, in June the Missile Defense Agency awarded Raytheon and Northrop Grumman contracts of approximately $61 million each to develop prototype Glide Phase Interceptor (GPI) missiles to counter the hypersonic threat. 

After both prototypes are tested, one will be chosen for full-scale production and be deployed within the Aegis ballistic missile defense system.

Furthermore, the U.S. Space Development Agency has awarded $700 million to L3Harris (NYSE: LHX) and $617 million to Northrop Grumman to build 14 satellites each for the tracking layer of a missile shield in low Earth orbit.

The satellites are slated to begin launching in 2025, thanks to a $550 million appropriation from Congress. As many as 200 satellites could eventually be deployed as part of this system.

Of course, if you really want to profit from these pot-splashing projects you should check out my latest report on a company that supplies all of these companies with hypersonic rocket engines. 

You can find 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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