BAE Systems Wins $473M Deal to Produce 40 M109A7 Paladin Howitzer

BAE Systems plc BAESY recently stated that it has clinched a $473 million deal for the production of 40 additional M109A7 Paladin Self-Propelled Howitzer sets, which includes the M992A3 Carrier Ammunition Tracked vehicle. 

The deal also includes enhanced support services, such as technical support packages, post-production refurbishment and welding compliance activities.

BAESY Boosts US Army Firepower With M109A7 Paladin

BAESY’s M109A7 Paladin represents the latest and most advanced howitzer in BAE Systems’ long-running M109 family of vehicles. The platform enhances survivability, lowers lifecycle and sustainment costs and ensures long-term combat readiness while delivering critical indirect fire support to the U.S. Army’s Armored Brigade Combat Teams (ABCTs).

Built on a foundation of American innovation and domestic manufacturing, the M109A7 has earned its reputation as the King of Battle. Designed for future warfare, it features cutting-edge technology and a modern digital backbone that enable greater responsiveness and integration on the battlefield. With improved robustness, survivability and precision firepower, the M109A7 is backed by the U.S. Army as a vital modernization program aimed at preserving and enhancing the combat effectiveness of its ABCTs.

Growth Outlook: BAESY and Other Defense Stocks

Rising global security threats are prompting nations to enhance their military capabilities, with armored vehicles attracting significant investment due to their versatility and critical role in ground operations.

Per the reports from the Mordor Intelligence firm, the armored vehicle market is likely to register a CAGR of 5.6% during 2026-2031. These strong growth trends highlight substantial opportunities for BAE Systems, which holds a prominent position in the armored vehicle segment.

In January 2026, U.S. President Trump proposed boosting U.S. defense spending to roughly $1.5 trillion in 2027, up from $901 billion in 2026. The proposed increase is expected to support fresh contract awards for BAE Systems and other defense companies, driving demand for combat platforms, munitions, upgrades and long-term sustainment, while strengthening industry-wide backlogs.

Other defense industry leaders poised to benefit from the expanding armored vehicle market are discussed below:

General Dynamics Corp. GD: The company’s Land Systems division develops combat vehicles and integrated technologies that provide soldiers with a decisive battlefield advantage. It designs, engineers, and sustains advanced tracked and wheeled platforms, incorporating modern electronic architectures, AI-enabled capabilities and autonomy-ready technology. Its AJAX next-generation Armored Fighting Vehicle delivers best-in-class protection, survivability, reliability and mobility, along with all-weather intelligence, surveillance, target acquisition and reconnaissance capabilities.

Textron Inc. TXT: The company designs, manufactures, and supports next-generation armored combat vehicles for the U.S. military, allied forces, special operations units, law enforcement and civilian organizations worldwide. Its COMMANDO family of armored vehicles delivers a blend of superior protection, exceptional on- and off-road mobility, survivability, lethality, versatility, reliability and sustainability, enabling a wide range of multi-mission capabilities.

RTX Corporation RTX: The company’s Raytheon business unit, operating as part of Team Lynx, is focused on meeting the U.S. Army’s requirements for the next-generation XM30 combat vehicle. The XM30 is a modern, tracked armored fighting vehicle designed to tackle the challenges of future battlefields. It delivers enhanced troop protection while integrating advanced technologies to keep soldiers ahead of evolving threats.

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