It’s a gloomy truth that wars in Ukraine and the Middle East – as well as a general enhance in global insecurity – have helped to revive BAE systemsshares (LSE:BA.).

How do I know this? Well, now (April 16) they are changing hands for 274% more than in February 2022, just before Russia’s first attack on Kiev.

And for those who feel comfortable investing in the defense sector, I believe there are many reasons why now may be a good time to consider taking up shares. Let me explain.

Inoperable

For understandable reasons, the operational status of Royal Navy ships is not made public. However, according to recent news reports, five of the six Type 45 destroyers are currently out of action.

At the beginning of the Iran War, repair work on HMS Dragon was hastily completed before the ship belatedly headed for the Mediterranean. It is currently in Cyprus and undergoing further work. Last week I heard the MP’s statement: BBC complaining that four of its six Type 23 frigates and HMS Elizabeth, one of the country’s two aircraft carriers, were also inoperable.

If true, this means that 10 of the Navy’s 15 gigantic ships are currently unserviceable. Do you remember the opening line of the chorus of this notable song? “Rule, Britannia! Britannia rules the waves“.

I’m not so sure about that.

Underwater

It appears to be a similar story for the country’s submarines. At the end of 2025 it was claimed that only two of the 10 British fleet were ready to put to sea.

This week, Lord Robertson, former NATO Secretary General, warned about the state of the country’s military. He said: “We are ill-prepared… The national security and security of the UK are at risk.”

An opportunity to consider

But one of the beneficiaries of this could be BAE Systems. It is already the largest supplier to the Ministry of Defense and is at the stage of implementing the Type 26 frigate program for the Navy. He is also heavily involved in the Trident update.

However, if the UK government decides to accelerate its plans to meet NATO’s 3.5% of GDP spending target, the country’s largest defense group is likely to be a huge winner.

BAE Systems is also a major supplier to the US military. Here, President Trump wants a 50% enhance in defense spending in 2027.

Possible problems

However, there are risks. The group’s shares are trading at almost 32 times historical earnings. The five-year average is 18.7.

I suspect this high valuation reflects investor optimism about the group’s growth prospects, but even so, any signs of a slowdown could trigger a piercing correction in the share price.

Defense programs also pose logistical challenges. If you get it wrong, cost overruns can be significant.

Final thoughts

Despite these risks, BAE Systems appears to be doing well. In 2025, it recorded an 8.2% year-on-year sales enhance. Basic earnings per share increased 9.8%. It also received modern orders worth £36.8 billion during the year, taking its order backlog to £83.6 billion. This is almost three times revenue.

Unfortunately, we live in a perilous world. Therefore, I think that people familiar with the industry could consider taking a position at BAE Systems.