BAE systems (LSE: BA.) shares jumped about 3% on November 28. In one day, the company increased its market capitalization by around £1.5 billion. Reason? A huge contract for fighter jets was signed by a certain Sir Keir Starmer.

The order from Türkiye, worth a total of billions of pounds, is just the latest good news for Europe’s largest defense manufacturer. This is another reason why I think this stock is worth considering today.

Twofold

The reason why this deal is such a powerful leader for FTSE100 wrestling is double. Both reasons are part of a long-term trend in which the company’s shares have increased almost fivefold over the last five years.

The first reason is geopolitics. The world has changed in the last few years, and not for the better. The war in Ukraine is a clear (though not the only) reminder of this.

Second, BAE Systems creates high-quality products that are in demand. Türkiye’s order was for 20 Eurofighter Typhoons. These are state-of-the-art fighters produced, as the name suggests, in several European countries (Great Britain, Spain, Italy and Germany).

However, in addition to those involved in design and production, these aircraft received orders from several countries. BAE Systems is responsible for a significant portion of the work, estimated at around one-third per one.

Will these trends continue? I think so. Defense spending looks set to be a major pillar in the coming years. I’ve even heard some people describe defense stocks as “new technology stocks.” Barriers to entry into this industry make it less likely that competitors will emerge.

Risk

There is a risk here. Since governments are customers, orders are huge but infrequent. The 20 up-to-date fighter jets have arrived at a very good time for the FTSE 100-listed company as jobs at its Lancashire manufacturing plant were at risk. On a brighter note, BAE Systems has a record order book, currently standing at £80 billion.

Another aspect to consider is the constantly evolving nature of warfare. As we have seen around the world, countries are increasingly turning to drones and other unmanned devices to protect themselves. If a company can’t innovate and keep pace, it’s in trouble.

Finally, it is worth paying attention to an captivating detail about the company’s valuation. Most British companies trade at lower rates than American ones. It is no different in the case of BAE Systems. Its forward P/E ratio of 24 is broadly comparable to its US peers, which may suggest it is trading at a premium.

Taking all this into account, I think there is much more good than bad here. Are defense stocks really up-to-date technology stocks? I’m not so sure about that. However, both sectors are likely to remain in demand in the future.