Lockheed Martin closed 2025 with a $194 billion backlog, roughly 2.5 times annual revenue, under a newly introduced seven-year contract structure enabling rapid production scaling. Under this model, annual THAAD interceptor output will rise from 96 to about 400 units (317% increase), while PAC-3 MSE production expands from 600 to 2,000 units (233% rise).

The stock advanced approximately 40% over the past year, peaking at $676.70 on March 2 before settling near $624 late in March. This rally reflects both underlying backlog strength and a premium for ongoing Iran conflict dynamics, raising questions about whether the geopolitical boost has peaked.

The duration of a potential Strait of Hormuz disruption remains the key variable for further re-rating above $700. A peak in Brent crude around $120 per barrel underscores the scale of this energy shock, while a $200 billion Pentagon supplemental request adds additive replenishment demand independent of base defense budgets.