This is no longer about isolated tensions in the Middle East or the quagmire in Ukraine. What is unfolding is a far broader and deeper process: an unprecedented wave of global rearmament. Europe is rearming, China is accelerating its military buildup, and Russia is issuing open threats. The common denominator is a renewed reliance on power, deterrence, and hard military capability.
Into this volatile environment comes a decisive catalyst. On February 5, 2026, the New START treaty between the United States and Russia officially expires, removing the last remaining framework limiting the world’s largest nuclear arsenals. At the same time, Washington and Tehran are preparing to resume talks over Iran’s nuclear program. Together, these parallel developments signal a clear shift away from nuclear restraint and toward a renewed dependence on strategic power and deterrence. This marks the formal starting point of an accelerated phase of global militarization.
From arms control to strategic uncertainty
To grasp the significance of this moment, it is necessary to return to the Cold War. The START framework emerged from a shared understanding in Washington and Moscow that unchecked nuclear expansion posed an existential threat to humanity itself.
The process began in 1972 under then-US president Richard Nixon and culminated in the final agreement signed in 2010 by then-US president Barack Obama and then-Russian president Dmitry Medvedev. Its logic was straightforward: mutual limits on warheads and delivery systems in order to preserve strategic stability for a defined period.
That restraint has now disappeared.
Today, Russia holds a numerical advantage with roughly 4,309 nuclear warheads, while the United States maintains about 3,700. Together, the two countries account for approximately 87 percent of the global nuclear arsenal. Yet the most consequential developments are no longer centered solely in Washington or Moscow. They are increasingly shaped in Beijing.
China, once a secondary nuclear power with an estimated 600 warheads, is rapidly expanding its arsenal. US defense assessments indicate that by 2030, China could surpass 1,000 nuclear warheads. What was once a bilateral standoff is becoming a three-way arms race, fundamentally altering global strategic calculations and forcing the United States to rethink its deterrence posture.
Nuclear energy as a strategic asset
In a military context, nuclear power differs fundamentally from other energy sources.
Nuclear energy is based on atomic fission, a process that releases enormous power from an extremely compact mass. By contrast, solar energy depends on external conditions, requires vast physical space, and produces variable output. Nuclear energy, whether in civilian reactors or military warheads, stores immense power internally and releases it instantaneously, with unmatched intensity and reliability.
This distinction explains why the United States plans to invest nearly one trillion dollars by 2034 in modernizing its nuclear forces. The objective is not electricity generation but strategic deterrence: power that is compact, precise, and overwhelmingly destructive.
To illustrate the scale, generating the explosive force of the Hiroshima bomb using conventional explosives would require roughly 15 million kilograms of TNT. Nuclear weapons achieve the same effect with less than one kilogram of fissile material.
Israel’s position in a shifting global order
Israel is directly affected by these developments. Although it is not formally listed among the declared nuclear powers, the consequences of the renewed arms race extend to the Middle East.
Nuclear escalation among the superpowers creates strategic space for threshold states such as Iran. For Washington, Iran is one component of a broader confrontation with China and Russia. For Israel, Iran represents the core strategic challenge.
There is also a significant economic and security dimension. As the global environment grows more dangerous, particularly in Europe and the Indo-Pacific, demand for advanced defense solutions is accelerating.
Israel’s defense industry, especially in missile defense, intelligence, and electronic warfare, is uniquely positioned. After two years of proven operational performance, Israeli systems are entering this new era with demonstrated capability and growing international credibility.
Who benefits from the arms race?
Every shift in the global order produces beneficiaries. The current rearmament cycle is centered on the nuclear triad: land-based missiles, strategic submarines, and long-range bombers. Several companies sit at the heart of this transformation.
In the United States, Northrop Grumman plays a central role in replacing aging intercontinental ballistic missiles and manufacturing the B-21 stealth bomber. General Dynamics dominates the naval leg of the triad through construction of Columbia-class nuclear submarines, a cornerstone of US strategy in the Pacific. Lockheed Martin and RTX Corporation anchor the missile and radar ecosystem, supplying critical delivery systems, propulsion, and detection technologies.
Israeli defense firms are also positioned to benefit. Elbit Systems is experiencing a rising demand for electronic warfare and intelligence solutions essential for countering advanced threats.
Exposure through the Tel Aviv Defense Index provides diversified access to Israel’s security sector, which is expected to see expanding order backlogs through strategic cooperation with US defense contractors on systems such as Arrow 3 and David’s Sling.
A new strategic reality for investors
The expiration of the New START treaty marks a clear turning point. The world is entering a nuclear era that is less stable, more competitive, and defined by a three-way arms race between the United States, Russia, and China.
For investors, the implications are clear. Defense budgets are likely to grow significantly over the coming decade, with strategic weapons, missile systems, and nuclear capabilities returning to the center of military planning.
Any forward-looking investment strategy in 2026 must account for this geopolitical reality. The new global order is already taking shape, driven by deterrence, technology, and power.
The writer is CEO of the hedge fund Valley.