Defense Stocks: A Buy Now?

Defense spending is increasing in the US and EU, prompting investors to consider buying defense stocks. In a recent survey, 51.4% of participants agreed that now is a good time to buy defense stocks. With a growing market, investors are looking for the best defense stocks to invest in, including Boeing, Lockheed Martin, Raytheon Technologies, and General Dynamics.

Defense spending is on the rise in the United States and Europe, driving significant demand for defense stocks. A recent survey of SA readers found that 51.4% of respondents believe now is a good time to invest in defense stocks, with companies like Lockheed Martin, Raytheon Technologies, and General Dynamics being considered potential investment options [1].

The increase in defense spending is evident in various initiatives. For instance, the United States and NATO allies have unveiled the Prioritized Ukraine Requirements List (PURL), a new mechanism designed to streamline and finance the delivery of American weapons to Ukraine. Under this initiative, nearly $1 billion has already been allocated by European countries, with a focus on advanced air defense systems like the Patriot [1]. This initiative signals a long-term commitment to Ukraine’s security, with NATO officials expecting it to raise up to $10 billion in its initial phase.

Meanwhile, India has reportedly paused plans to procure U.S. defense equipment, including arms and aircraft from Lockheed Martin, Boeing Co., and General Dynamics, due to diplomatic fallout from President Donald Trump's tariffs [2]. This pause has affected talks on purchasing U.S. weapons, including combat vehicles and reconnaissance aircraft.

Despite these challenges, the broader defense sector is experiencing robust growth. The second-quarter 2025 reporting cycle for defense stocks has started, with prominent defense primes like Lockheed Martin, Northrop Grumman, Textron, and General Dynamics delivering better-than-expected earnings numbers [3]. Escalating geopolitical tensions worldwide continue to fuel demand for defense products and related services, boosting order growth and revenue expansion, which should be reflected in the defense stocks’ upcoming operating results.

Lockheed Martin and Raytheon are also competing for the US Army’s Common Autonomous Multi-Domain Launcher (CAML) program. This initiative highlights the growing interest in autonomous and mobile defense systems, which could further boost demand for defense stocks [2].

In conclusion, the rising defense spending in the US and EU presents a compelling opportunity for investors to consider defense stocks. However, it is essential to stay informed about geopolitical developments and company-specific news to make well-informed investment decisions.

References:
[1] https://www.ainvest.com/news/defense-stocks-buy-avoid-2508/
[2] https://thedefensepost.com/2025/08/06/lockheed-raytheon-compete-caml/
[3] https://finance.yahoo.com/news/2-defense-stocks-poised-surpass-123000108.html