This paper explores the effect of investment in intangible assets (INTI) on the non-financial performance of non-financial firms listed on the Palestine Exchange (PEX), considering the moderating effect of the political instability (PI) of the Gaza War. The study employs the panel data approach for a sample of 23 companies listed on the PEX between 2017 and 2023. Genderized Method of Moments (GMM) regression is utilized to investigate the effect of INTI on non-financial performance and the moderating effect of PI. The findings reveal that INTI is positively and significantly related to customer (CUS) and internal business processes (IBP). The research also finds that intangible to total assets and market capitalization are not related to learning and growth (LG). Among the non-financial perspectives, IBP is found to be the most affected by the Gaza war as it is negatively and significantly associated with INTI. Accordingly, PI of the Gaza war weakens the positive relationship between INTI and IBP. This research is one of the very limited studies examining the effect of INTI on non-financial performance, particularly in the Palestinian context. This study has important practical implications for managers and stakeholders to consider the role of INTI in non-financial performance to enhance firms’ competitive advantage.