Rapid iteration meets export-scale growth
Israel’s defense sector is built around a tight lab-to-field loop. Real operational demand accelerates prototyping, testing, and deployment, and successful systems often become export products. That dynamic has helped drive Israel’s defense exports to record levels in 2024, and while 2025 figures haven’t been released yet, they’re expected to set a new high.
Directed energy goes mainstream
One of the most closely watched emerging technologies is directed-energy air defense. In late 2025, Israel’s Ministry of Defense and Rafael announced delivery of the first operational Iron Beam high-power laser system to the IDF, aimed at intercepting rockets, mortars, drones, and other aerial threats at lower marginal cost than traditional interceptors. This is critical since air defense is often a contest of economics. Inexpensive threats can force defenders to spend expensive interceptors, and lasers are designed to flip that equation.
Connecting the dots to the MarketVector Israel Defense Industries Index (MVIDI)
The MarketVector™ Israel Defense Industries Index (MVIDI) is explicitly designed to track Israeli companies that are involved in serving national defense industries. To ensure broad coverage of the sector, the index methodology includes a minimum market capitalization threshold for new constituents of $15 million USD.
As themes like directed energy, layered air defense, and counter-UAS autonomy move from demonstrations into fielded systems and export contracts, MVIDI offers a clean framework for following how Israel’s defense-technology edge translates into public-market performance.
Spotlight on Elbit, NextVision Stabilized Systems, and Aryt
As of the Q4 2025 review, the three largest constituents of the MarketVector Israel Defense Industries Index were NextVision Stabilized Systems (15% weight), Elbit Systems (12%), and Aryt Industries (12%). Elbit is Israel’s scaled defense prime spanning segments such as aerospace, land, and cyber, while NextVision is known for micro stabilized cameras used on drones and UAVs; Aryt is a specialized supplier of detonators/electronic fuzes for military ammunition- illustrating how the index blends a major systems integrator with critical niche component manufacturers.
The MVIDITR index has delivered outstanding results, with 1 and 3 year returns of 126% and 524%, respectively.
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