Small Contractors, Big Defense DollarsBy Joel Litman, chief investment officer, Altimetry
 The Army needed a vehicle unlike anything ever created before...
So it gave a struggling automaker 49 days to make it. When the vehicle drove off the lot on September 23, 1940, American Bantam hadn't even tested its prototype. Executives climbed into the strange-looking vehicle and headed to Camp Holabird, an Army testing facility outside Baltimore. They were cutting it close... By the time they arrived from their Pennsylvania factory, only 30 minutes remained before the deadline. There was no time to waste. World War II was raging across Europe. France had fallen to Germany just months earlier. And even though the U.S. hadn't yet entered the war, military leaders were preparing for the possibility. The Army needed a new kind of reconnaissance vehicle. It wanted something small and light enough to move quickly. The Army also needed it to be powerful enough to travel across rough terrain while carrying soldiers and weapons. So the government asked American automakers to submit proposals. Bantam stepped up because it had to. A few months earlier, the automaker hardly looked like the company that would help transform the U.S. military...It was in serious financial trouble after years of losing ground to Detroit's giants.
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But Bantam had experience making small cars. And management believed the Army contract would give it new life. The company brought in Detroit engineer Karl Probst to work with Bantam's factory manager Harold Crist. Together, they raced to turn the Army's unusual list of requirements into a working vehicle. To get things done on time, the company relied on other American manufacturers. Once it gathered all the pieces, Bantam assembled a lightweight, four-wheel-drive vehicle... the first jeep prototype. Then, the Army tried to break it... It drove the prototype around a test course... through mud... and up extremely steep slopes. If the vehicle broke down for a full 24 hours at any point, the test would be a failure. The Army managed to crack the vehicle's chassis. But the jeep survived the rigorous testing period... and earned Bantam an initial contract. Suddenly, the little automaker had a different problem...The Army was preparing for a war on a scale few U.S. businesses had ever experienced. It would eventually need far more vehicles than Bantam's small factory could produce. So automakers Ford and Willys-Overland entered the program and built their own prototypes. After extensive testing and design changes, the Army standardized Willys' model. And when demand grew faster than Willys could handle, Ford began production, too. American industry took over from there... Hundreds of thousands of jeeps rolled off production lines during World War II. It became one of the most recognizable machines of the war. While American Bantam played a small role in the production run, its story highlights a key detail of the U.S. defense industry... The biggest military breakthroughs often depend on an entire network of companies. Ford had the largest factories, but the jeep couldn't have happened without Bantam. Today, America is gearing up for another massive defense build-out...President Donald Trump has proposed a record $1.5 trillion defense budget for fiscal year 2027 – a more than 40% bump from this year's budget. The government wants more submarines and ships. It's investing heavily in satellites and missile defense through the Golden Dome program. And it's allocating $55 billion to the Defense Autonomous Warfare Group, an initiative focused on autonomous weapons systems. That's up 24,000% in a single fiscal year. Retired general and former CIA Director David Petraeus calls it the "largest single commitment to autonomous warfare in history." Then there's the piece most investors are overlooking... drones. The U.S. military is following in Ukraine's footsteps with a massive drone build-out. Last year, Defense Secretary Pete Hegseth promised to "deliver tens of thousands of small drones to our force in 2026, and hundreds of thousands of them by 2027." The Pentagon has already ordered 20,000 drones in 2026... and plans to order 200,000 more by 2027. But the majority of companies receiving these contracts are privately owned. That means venture capitalists are making a fortune while everyday investors miss out. Rising geopolitical tensions are putting a fresh premium on secure navigation and communications. Most investors respond by focusing on the giant defense contractors – companies like Boeing (BA), Lockheed Martin (LMT), RTX (RTX), Northrop Grumman (NOC), and General Dynamics (GD). They're the ones that build headline-grabbing aircraft, missiles, and ships. Yet those systems still depend on thousands of smaller pieces. And the companies supplying those technologies can be tiny compared with the programs they support. We just aired an exclusive video presentation highlighting a big opportunity in small contractors, suppliers, and defense-technology companies today. One obscure supplier, for example, soared 4,021% after the company it was working with landed a major government deal. This effect could become even more powerful as Washington reduces its reliance on the traditional "Big Five" and starts directing more money toward smaller, faster companies developing the next generation of military technology. Billions of dollars are already flowing into this technology. And that means the investing opportunity isn't likely to last for long. If you'd like to learn more about this massive shift in the defense industry, including how you can profit from it, click here. Regards, Joel Litman
September 25, 2026
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