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The article highlights that ongoing geopolitical tensions involving Iran could drive short-term gains for defense sector stocks. However, long-term profitability for these companies will depend on a massive backlog of maintenance and software contracts, which will generate recurring revenue. Investors should focus on firms with strong contract pipelines rather than just geopolitical event-driven speculation. This analysis suggests defense stocks with sustainable contracts may outperform volatile event-based trading strategies in the medium to long term.
