TLDR
- Blackstone is investing $1 billion to launch a new defense technology company called Falcata.
- Falcata will combine two firms Blackstone already owns: Technology Service Corporation and Applied Systems Engineering.
- BX stock is down 25% year-to-date despite the announcement.
- Wall Street has a Moderate Buy rating on BX with a price target of $145.50, implying 30% upside.
- Blackstone has invested $20 billion in defense and aerospace over the past five years.
Blackstone (BX) stock slipped in pre-market trading today even after the firm revealed a $1 billion plan to launch a new defense technology company. The asset manager is calling the new venture Falcata, named after a sword used in pre-Roman Iberia.
The news didn’t do much for the stock price. BX is down 25% so far this year, and today’s announcement failed to change that trend.
Falcata will be built by combining two companies Blackstone already owns. Those are Technology Service Corporation and Applied Systems Engineering.
Together, they make radar systems, electronic warfare tech, precision weapons, and drones. Blackstone plans to keep buying more companies to add to the platform.
What Falcata Will Focus On
David Kaden, who leads Blackstone’s defense investments, told Bloomberg that Falcata will target interceptor technology. This covers systems that defend against missiles, drones, and other airborne threats.
Kaden pointed to a specific problem in the defense industry. He said one of the biggest bottlenecks has been the supply of interceptors, especially the navigation and guidance parts that make them work.
He added that combining the two companies lets Blackstone offer cheaper navigation and guidance systems. That’s a key piece of making interceptors more affordable and available at scale.
Recent conflicts have pushed this issue into focus. Drones have played a major role in fighting between Ukraine and Russia, as well as in the Gulf region.
Blackstone said in a statement that these conflicts have shown a need for defensive systems that work well and can be produced in large numbers. The firm wants Falcata to meet that demand.
Blackstone’s Broader Defense Push
This isn’t Blackstone’s first move into defense. The firm has put $20 billion into defense and aerospace deals over the last five years.
That list includes a stake in Anduril, a defense-tech company known for autonomy and AI systems used by the military. Blackstone President Jon Gray said in July that the pace of these investments is set to pick up.
Gray made the comments at the Pennsylvania Defense & Innovation Summit. He said national security is a strong place to put investor capital right now, partly because it lines up with U.S. interests too.
Blackstone isn’t alone in chasing defense deals either. Carlyle Group (CG) launched its own dedicated aerospace, defense, and industrials unit earlier this year.
That move was aimed at targeting deals across the U.S. and Europe. Governments on both sides of the Atlantic have been ramping up defense budgets amid pressure from Russia and from President Trump over NATO spending levels.
Back to Blackstone’s stock performance. Despite the steep pullback this year, analysts remain fairly upbeat on BX.
On TipRanks, the stock carries a Moderate Buy consensus, based on 10 Buy ratings and 6 Hold ratings. The average price target sits at $145.50.
That target implies a 30% upside from current levels. The highest price target on the stock is $184.
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