Zelenskyy: Russia is preparing for new large-scale attack on Ukraine

The immediate market read is not just “more war risk,” but a higher probability of repeated air-defense consumption and accelerated replacement demand. That tends to favor layered beneficiaries: Western missile-defense primes, interceptor suppliers, and the logistics/infrastructure names tied to hardening critical assets in Europe, while pressuring any Europe-exposed industrials with margin sensitivity to energy and freight disruptions. The bigger second-order effect is on inventory cycles: once a theater enters a high-attrition missile/drone regime, procurement shifts from episodic to replenishment-driven, which extends order visibility for months rather than weeks.

Sanctions talk is the other catalyst, and it matters most where enforcement is improving rather than where headlines are loudest. The incremental winners are firms with compliance tools, screening, customs, and dual-use monitoring exposure; the losers are niche industrial exporters with indirect Russia/CIS routing and any businesses relying on gray-market transshipment through third countries. If Europe tightens secondary enforcement, the spread widens between clean supply chains and “cheap but messy” sourcing, creating a real margin penalty for violators even if top-line exposure looks small.

The contrarian risk is that the market has become desensitized to geopolitical escalation, so the first-order move may be modest unless there is a visible step-up in NATO involvement or a concrete sanctions package with extraterritorial teeth. That makes timing key: the trade is better expressed through optionality into the next 2-6 weeks than through crowded outright longs. A further nuance is that defense outperformance could be capped if investors assume replenishment orders are already priced in; the cleaner alpha may be in the second-derivative suppliers and enablers, not the headline primes.