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
31
Average momentum
0
Rated strong
Stock Momentum Score To target
Embraer S.AAverage 74 206 +29%
General Dynamics CorporationAverage 53 197 +20%
Lockheed Martin CorporationAverage 47 177 +13%
Northrop Grumman CorporationAverage 30 175 +19%
RTX CorporationAverage 51 172 +18%
BAE Systems plcAverage 52 171 +19%
L3Harris Technologies, IncAverage 27 169 +33%
Airbus SEAverage 60 168 +11%
TransDigm Group IncorporatedAverage 45 154 +27%
Norsk Titanium ASAverage 78 154 no target
Rolls-Royce Holdings plcAverage 60 152 +28%
Elbit Systems LtdWeak 43 144 +6%
HEICO CorporationWeak 50 143 +26%
Leonardo DRS Inc. Common StockWeak 33 140 +50%
GE AerospaceWeak 50 134 +25%
Howmet Aerospace IncWeak 35 131 +48%
Loar Holdings Inc.Weak 42 121 +44%
Astronics CorporationWeak 32 106 +59%
VSE CorporationWeak 27 103 +58%
BWX Technologies, IncWeak 21 100 +52%
MDA Space Ltd.Weak 29 93 +60%
FTAI AviationWeak 17 92 +121%
The Boeing CompanyWeak 37 89 +42%
Karman Holdings Inc.Weak 5 71 +140%
Axon Enterprise, IncWeak 21 69 +78%
AeroVironment, IncWeak 7 63 +78%
Space Exploration Technologies Corp. Class A Common StockWeak 43 63 +51%
Kratos Defense & Security Solutions, IncWeak 6 59 +146%
Virgin Galactic Holdings, IncWeak 8 43 +46%
DroneShield LimitedWeak 5 40 no target
Satellogic Inc. Class A Ordinary SharesWeak 10 40 +165%
Archer Aviation IncWeak 7 36 +170%
Voyager Technologies, Inc.Weak 19 35 +76%
Rocket Lab USA IncWeak 10 30 +106%
Intuitive Machines Inc. Weak 5 29 +173%
Red Cat Holdings, IncWeak 4 25 no target
Planet Labs PBCWeak 5 16 +133%

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.

← All themes