Is It Time to Mobilize Your Investing Strategy With Defense Stocks?

Defense spending is on the rise at home and abroad. Should you fall in line?

Many top defense companies have long track records of steady revenue and dividend payments. Andrew Angelov/Shutterstock

As war continues to wage in Ukraine and the Middle East, many investors—including Ark Invest CEO Cathy Wood—are turning to defense stocks. In fact, the notable investor has purchased shares of defense contractor AeroVironment totaling $1.36 million.

So what exactly are defense stocks?

They’re shares of companies that produce military equipment, services, and technology. Many also engage in the aerospace and cybersecurity sectors.

Why Invest in Defense Stocks?

Defense stocks are often considered safe investments, because spending on national security tends to keep pace even during economic downturns. It could offer a reliable stream of revenue as well as dividend payments for investors.

Many top defense companies also hold long-term contracts with the Department of Defense, providing a reliable inflow of ongoing income.

In addition, investing in defense companies allows investors to take part in advancements in cutting-edge technology in sectors like cybersecurity and space exploration—with many of these developments having applications beyond defense.

Stocks to Watch

With ongoing conflicts around the world—and as countries race to modernize their armies and defenses to combat new threats in the digital age—it’s no surprise many defense stocks are heating up.

Here are some of the top defense stocks today.

Lockheed Martin (LMT): Lockheed Martin is a leading American defense and aerospace manufacturer, with highlights like advanced fighter jets and hypersonic weapons. The company pulled $64.7 billion in defense revenue in 2024, according to an analysis by fund manager U.S. Global Investors.

Leidos (LDOS): Leidos is a leading defense, aviation, information technology, and biomedical research company based in Virginia. It has secured $11.1 billion in defense revenue.

Northrop Grumman (NOC): This aerospace manufacturer is a leader in cyber warfare. It is known for the B-21 Raider stealth bomber and space systems. And the company has earned $35.2 billion in defense revenue.

Curtiss-Wright (CW): Tracing its history back to the 1920s, this aviation company provides planes and related technology to the defense sector.

RTX (RTX): Formerly Raytheon Technologies Corporation, RTX specializes in aerospace technology and defense. It’s known for missile defense systems, advanced air defense systems, and hypersonic weapons.

General Dynamics (GD): Based in Virginia, this global company provides aerospace and defense products and services for security. Among its list of products is nuclear-armed submarines and combat vehicles. And its shipbuilding division earned a $188 million contract from the government.

Defense Spending at Home and Abroad

As ongoing conflicts continue to dominate headlines, the U.S. Space Force’s top-secret, Boeing-made X-37B space plane returned to Earth on March 7 after spending more than 400 days in orbit. The mission “broke new ground,” Gen. Chance Saltzman, Space Force chief of space operations, said in a statement.

Moreover, President Donald Trump in his speech to Congress March 4 announced plans to modernize the commercial and naval ship manufacturing industries. He also mentioned tax incentives for these sectors and vowed to “bring this industry home.”

And although Trump has moved to suspend military aid to Ukraine, many European countries have voiced a mission to heavily arm themselves.

Taken together, this could mean a rally for defense stocks. But it’s always important to do your research when analyzing these stocks. And keep an eye out for companies with strong earnings track records.

How to Buy Defense Stocks

You can purchase shares of defense stocks through virtually any brokerage account. Many of these companies are in the S&P 500, an index containing some of the country’s biggest companies.

But you should carefully analyze these companies. Check for strong revenue growth and diversified companies with a long range of products and services.

Defense Stock ETFs

You can also purchase shares of defense exchange-traded funds (ETFs). These are professionally managed packages of defense stocks. Purchase defense ETFs could add a layer of ease and diversification to your investment strategy. Here are some of the top defense ETFs:

• iShares U.S. Aerospace & Defense ETF
• Invesco Aerospace & Defense ETF
• SPDR S&P Aerospace & Defense ETF
• ARK Space Exploration & Innovation ETF

The Bottom Line

As the world’s militaries adapt to a rapidly changing digital world and respond to new threats, defense products and services will remain in demand. And you can bet Uncle Sam will always be a top customer.

So it could make sense to begin investing in defense stocks. Many top defense companies have long track records of steady revenue and dividend payments.

Before you jump in, however, make sure you understand defense companies thoroughly. While the defense industry may be booming, not all defense companies are created equal.

The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.