Defense Tech Basket

## What this measures

Equal-weighted index of seven defense equities: Palantir, Rocket Lab, Lockheed Martin, Northrop Grumman, RTX, Kratos and Leidos. The basket combines legacy prime contractors with AI-native entrants, rebased to 100 on 2 August 2021.

## Background

100 × the average of each stock's price relative to its price on 2 August 2021, the first day all seven have a stored close (the price feed carries Rocket Lab from before its SPAC merger closed). Equal weight: a 10% move in Kratos counts as much as a 10% move in Lockheed. Computed daily at 21:55 UTC by /api/cron/defense-tech-basket from licensed closes already stored in the lattice. Rebuilt 24 September 2026; before that it averaged raw share prices from Yahoo Finance, so the $500 stocks dominated.

## Why it matters

Defense budgets and procurement priorities shape the revenue available to contractors, and equity markets aggregate expectations about those flows, new platform wins, and margin outlook. A basket that holds both traditional primes and software-first defense firms offers a view into whether investors expect the sector as a whole to grow and whether AI-native models are gaining share. Organizations with defense exposure, supply-chain ties or national-security mandates can use it to monitor sentiment and capital allocation in the industrial base.

## How to read it

The index rises when the seven stocks collectively gain relative to the August 2021 base. Because each name receives equal weight, a percentage move in Kratos affects the index as much as the same percentage move in Lockheed Martin, isolating broad sector rotation from single-stock size effects. Compare successive readings to track momentum; compare the basket to broader equity indices to see whether defense is outperforming or lagging.

## What it does not say

The index reflects market pricing, not order flow, classified programme awards or realized earnings. It does not distinguish between moves driven by defence policy and those driven by interest rates, buybacks or idiosyncratic execution risk.

## Source

Received through a licensed market data provider.