Elbit Surges While Chipmakers Slide as Tel Aviv TA-35 Closes October Down 3.5%
Tel Aviv's TA-35 index fell 3.5% in October, driven by a stark split between Elbit Systems surging 19.3% on defense contracts and chipmakers Tower and Camtek dropping over 20%.
Tel Aviv's TA-35 index closed October down 3.5%, yet the monthly performance exposed a sharp divergence between defense contractor Elbit Systems and local chipmakers. Elbit surged 19.3% to lead the benchmark index, whereas Tower Semiconductor plummeted 22.8% and Camtek lost 21.9%, marking the steepest declines on the board.
The widening gap became particularly pronounced toward the end of the month. On the final trading session of October, chip stocks suffered steep losses, with Nova, Camtek, and Tower each dropping over 7% amid broader tech weakness on Wall Street and a reassessment of growth expectations surrounding artificial intelligence and data centers.
Defense Contracts Fuel Elbit's Rise
In stark contrast, Elbit Systems is perceived as benefiting from long-term defense budget cycles and robust international demand. The company announced several major agreements over recent months, reinforcing investor confidence during a volatile market period. Demonstrating this domestic momentum, the Israeli Ministry of Defense and the IDF signed a 15-year agreement with Elbit to establish a comprehensive training center for the military's next-generation artillery and rocket launchers.
The agreement encompasses the development and supply of training infrastructure, simulation systems, instructional services, and ongoing logistical support. The facility will cater to the artillery corps' primary combat platforms, including the Roem (SIGMA) autonomous howitzer and the PULS rocket launcher system. According to the Ministry of Defense, the new setup will incorporate advanced driving and mission trainers to shorten qualification periods and optimize combat readiness.
Global Expansion and Major Orders
This domestic contract adds to a prolific string of international deals secured by Elbit Systems throughout the year. Approximately two weeks prior, the company announced a $235 million contract to supply EXTRA-MR rockets, PULS launchers, and logistical support to an unnamed European nation. This followed a $200 million agreement in the Asia-Pacific region for aerial ISTAR systems and training solutions.
Additional milestones this year include a $270 million contract for intelligence and surveillance systems in September, a $370 million order secured by its US subsidiary from Customs and Border Protection in July, a $1.4 billion modernization program for a European client, and a $350 million tank upgrade agreement.
