Stock themes

Best defence stocks

Defence stocks are shares in companies that build weapons, ammunition, military vehicles, aircraft, drones and defence electronics. After years of cuts, Europe is rearming and NATO spending targets have filled order books years ahead. It is one of the few sectors where politics matters more than the economic cycle. Below, our model ranks every defence stock on the US market by score and momentum, updated after each close.

37
Stocks
30
Average momentum
0
Rated strong
Stock Momentum Score To target
General Dynamics CorporationAverage 62 205 +16%
Embraer S.AAverage 70 201 +33%
Lockheed Martin CorporationAverage 72 199 +2%
Northrop Grumman CorporationAverage 43 185 +12%
L3Harris Technologies, IncAverage 34 176 +24%
RTX CorporationAverage 59 174 +20%
BAE Systems plcAverage 55 170 +22%
Airbus SEAverage 60 168 +15%
TransDigm Group IncorporatedAverage 45 152 +28%
Elbit Systems LtdWeak 45 143 +9%
HEICO CorporationWeak 49 142 +31%
Leonardo DRS Inc. Common StockWeak 33 141 +54%
Rolls-Royce Holdings plcWeak 38 130 +47%
GE AerospaceWeak 40 124 +36%
Howmet Aerospace IncWeak 25 122 +74%
Loar Holdings Inc.Weak 43 122 +40%
Norsk Titanium ASWeak 38 107 no target
Astronics CorporationWeak 29 105 +69%
VSE CorporationWeak 21 99 +80%
BWX Technologies, IncWeak 19 97 +64%
The Boeing CompanyWeak 39 91 +41%
FTAI AviationWeak 16 91 +124%
MDA Space Ltd.Weak 29 91 +68%
Karman Holdings Inc.Weak 7 73 +123%
Axon Enterprise, IncWeak 24 72 +62%
Space Exploration Technologies Corp. Class A Common StockWeak 43 67 +72%
AeroVironment, IncWeak 8 66 +73%
Kratos Defense & Security Solutions, IncWeak 7 60 +148%
Virgin Galactic Holdings, IncWeak 8 44 +42%
DroneShield LimitedWeak 6 43 no target
Satellogic Inc. Class A Ordinary SharesWeak 9 39 +166%
Voyager Technologies, Inc.Weak 18 37 +77%
Intuitive Machines Inc. Weak 4 31 +175%
Red Cat Holdings, IncWeak 4 29 no target
Rocket Lab USA IncWeak 10 26 +94%
Archer Aviation IncWeak 9 25 +178%
Planet Labs PBCWeak 5 19 +125%

What counts as a defence stock?

The theme covers companies that earn their money from governments rather than consumers. The large US primes — Lockheed Martin, RTX and General Dynamics — are the steadiest, growing slower but from a far larger base. European names reach the US market as depositary receipts: BAE Systems, Airbus and Rolls-Royce. Several are only partly defence — Embraer and Airbus sell mostly civil aircraft, so they do not behave like pure defence names.

What moves defence stocks?

Government budgets, not customer demand. A defence budget is voted on by politicians and can be delayed, cut or brought forward without warning. That is the fundamental difference between this sector and almost every other.

The order book, not the quarter. Contracts run over many years, so a single quarter says little. What the market reacts to is new orders and the size of the total backlog.

The ability to deliver. Several companies have held orders they could not produce fast enough — ammunition and propellant have been bottlenecks. Capacity costs money before it earns any.

Peace talks hit sentiment first. Prices react to negotiation headlines long before an order book actually changes.

Questions and answers

Which defence stocks are the largest?

Lockheed Martin, RTX and General Dynamics are the largest US-listed pure defence names, with BAE Systems, Airbus and Rolls-Royce reaching the market as depositary receipts. The list above ranks them by our model — quality, value and momentum — not by size.

Are defence stocks a good investment?

We cannot predict the market. The model shows which companies stand strongest right now and when a trend turns. But the sector is driven by political decisions rather than consumer demand, so it can change direction faster than most industries.

What happens to defence stocks in a ceasefire?

Prices usually react immediately, even though order books run years ahead and are not changed by a single headline. That difference is worth knowing: a price reaction to news is not the same as a change in earnings.

Why is Embraer on the list?

Embraer builds both commercial and military aircraft, so it belongs to the theme. But civil aviation carries most of the revenue, so the stock does not behave like a pure defence name. The same is true of several companies here — check the individual stock page for what each one actually lives on.

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