The display of ultramodern weaponry in the war against Iraq has touched off a rush on Wall Street to buy high-technology defense stocks.

But many financial analysts remain skeptical that Operation Desert Storm will lead to a sustained bull market in war materiel, 1990s-style, or in the shares of the companies that produce it.Just about everyone who follows the fortunes of the aerospace and electronics industries agrees that the early course of the war has represented a victory for many defense contractors.

For all past and present controversies over the cost and usefulness of the equipment these companies make, a good many of the weapons and systems now are passing real-life battle tests in impressive style.

"The complex technologies and weapons now being used in combat for the first time appear to be working very well," said Byron Callan, an analyst at Prudential-Bache Securities.

Still, defense industry-watchers in the financial world say it is by no means clear that current use will create significant new future demand for military merchandise.

In fact, some suggest, the gulf war could serve to restrain future aerospace orders in any one of several ways - especially if U.S.-led forces prevail in a relatively short conflict.

For one thing, they cite a sort of "if it ain't broke don't fix it" effect: Any push to develop and build new equipment is likely to draw more impetus from systems that don't work than from those that do.

Also, said Callan, if Iraq were thoroughly subdued, "Saudi Arabia would lose its primary impetus for plans to double its armed forces. In addition, the long-term military threat to Israel might be reduced."

Greg Smith, Prudential-Bache's investment strategist, says the worldwide armaments business could be hurt no matter what the outcome of the war.

"At some later date," he says, "I expect a great deal of soul-searching about how low-tech dictators like Saddam Hussein acquired their high-tech weapons.

"I believe many nations will review their policies and will ultimately limit foreign sales of products and technology that might be used against them."

At home, the strained condition of the U.S. government budget - which stands to get worse as the bills from the gulf war come due - looms as a major obstacle to future defense spending.

"The overriding influence on the defense budget continues to be the rising domestic deficit, not strategic development," say Phil Friedman and Jennifer Pokrzywinski, analysts at Morgan Stanley & Co., in a current industry report.

"The national debt is only worsening in the current economic environment and should escalate if war drags on. We do not believe that long-term defense spending patterns will be driven by events in the gulf."

One of the apparent early casualties of the showdown in the Middle East was the big "peace dividend" economists had been talking up with the ending of the Cold War between the West and the Soviet bloc.

Since Iraq's invasion of Kuwait last Aug. 2, analysts say military spending worldwide promises to fall less sharply than was previously thought.

Nevertheless, says the Value Line Investment Survey, "U.S. defense expenditures seem likely to decline for years to come.

"Although the United States is spending heavily on its defense of the Persian Gulf area, long-term investment cases for the members of this industry should not be based on what we expect will be a transitory runup in spending."