The American Heritage Dictionary defines a ray gun as a device that fires a beam of energy, especially one depicted as a destructive weapon in science fiction.  Writers like Jules Verne and H.G. Wells have taught us that science fiction has the potential to become reality. The recent test of the U.S. Navy’s Laser Weapon System (LaWS), which used a solid-state laser, mounted on a warship, to shoot down unmanned aerial vehicles (UAV) proved this point once again.

Guided by Raytheon’s (RTN) Phalanx Close-In Weapon System sensors, the LaWS was able to detect, track, engage, and shoot down UAV. While this is not the first time that the military has used lasers to destroy drones, it was a milestone to perform this feat over the ocean. Indeed, the movement of the ships and the effect of salty, moist, maritime atmosphere on a laser’s performance were obstacles that needed to be overcome.

There are a number of advantages of a laser-based weapons system over traditional artillery-based platforms. First, there is the greater range of the lasers (possibly at least double that of current weapons). Second, the laser beams are more precise. They are also faster since they travel at the speed of light. Furthermore, because lasers vaporize the target, there is a reduced risk of U.S. troops being injured or killed by shrapnel or other collateral damage. Lastly, given that the systems are powered electrically, they will not run out of ammunition as long as there is a sustained source of energy. The fact that the laser systems need a significant amount of electricity to operate, though, likely makes a nuclear power source a necessity.

Not to be outdone by the competition, defense contractor Northrop Grumman (NOC) has been testing its Maritime Laser Demonstration System, which is designed for deployment on U.S. Navy vessels, as well. This system is expected to be used to defend Navy ships against a fleet of smaller enemy boats. Meanwhile, Boeing’s (BA – Free Analyst Report) laser system, which would be mounted on a military truck, is being developed for the U.S. Army.  This weapon would have the capability to destroy oncoming rocket, artillery, and mortar projectiles.

With so many large defense companies focusing their energy on laser-based weapons systems, it should come as no surprise that we expect these technologies to find their place on the battlefield within the near future. The increasing use of UAV by other global military forces is making it essential for our government to develop newer weapons to attack and counter the opposition. The resurgence of a space-based nuclear ballistic missile defense system, initially proposed under the Reagan Administration’s Strategic Defense Initiative, may well be in the works especially given the technological strides that have been made using lasers over the past few decades.  This is merely speculation, but if defense contractors are able to develop such systems, we think it would lead to the procurement of substantial government contracts.

The creation of high-energy laser weapons systems is opening the door to the next generation of military technology. Still, we believe that successful integration of the LaWS or similar platforms would probably not be the final nail in the coffin for ammunition-based weapons. The weapons that are currently in operation would, at the very least, be used as a backup for laser systems.

At the end of the day, we think the defense companies that are able to find a balance of power, effectiveness, and cost for laser-based systems will win the government contracts and profit the most. The intense competitive nature of large companies, such as Raytheon, Boeing, Northrop Grumman, and Lockheed Martin (LMT) and the emergence of smaller players into the laser weapons systems race should spur even greater advances in the years ahead. Within the upcoming decades, the next idea originally conceived in the works of science fiction may well make its way from the pages and movie screens, onto the drawing boards.