Lockheed Martin Surges 4.09% on Trump's $1.5T Defense Budget Hype: Is This the Start of a New Bull Run?

Summary
• Lockheed Martin (LMT) rockets 4.09% intraday to $517.21, hitting its 52-week high of $542.87
• Trump's $1.5 trillion 2027 defense budget proposal sparks sector-wide frenzy, with Northrop Grumman (NOC) up 2.22%
• Options chain sees explosive volume in $515–$520 strike calls, with $515 call options surging 179.88%

Lockheed Martin’s stock is surging on the back of President Trump’s bold $1.5 trillion defense budget proposal, which has ignited a firestorm across the aerospace sector. The stock’s 4.09% intraday gain—pushing it to $517.21—reflects a perfect storm of political tailwinds, contract momentum, and technical strength. With the 52-week high of $542.87 within striking distance, investors are scrambling to position for a potential breakout.

Trump’s 'Dream Military' Ignites Defense Sector Rally
President Trump’s Truth Social post calling for a $1.5 trillion 2027 defense budget has triggered a sector-wide buying frenzy. Lockheed Martin, as a prime beneficiary of defense spending, surged 8% premarket after the announcement. The move aligns with recent contract momentum, including the delivery of 191 F-35s in 2025 and AI integration breakthroughs like STAR.OS™. Technical indicators reinforce the bullish case: a bullish Kline pattern, MACD above signal line, and RSI at 59.72 suggest strong momentum. The stock’s 4.09% gain—its largest intraday move in over a year—reflects both immediate political tailwinds and long-term demand for advanced defense systems.

Defense Sector Unites Behind Trump’s 'Dream Military'
The defense sector is rallying in unison behind Trump’s budget proposal. Northrop Grumman (NOC) surged 2.22% intraday, while General Dynamics (GD) gained 1.70%. This synchronized move underscores the sector’s alignment with Trump’s military expansion agenda. LMT’s 4.09% gain outpaces peers like RTX (+0.55%) and Boeing (-0.72%), highlighting its dominant position in next-gen defense contracts. The sector’s collective response signals a paradigm shift in defense spending priorities, with AI integration and hypersonic capabilities driving long-term growth.

Options Playbook: Capitalizing on LMT’s Breakout Momentum
• 200-day MA: 466.84 (below) • RSI: 59.72 (neutral) • MACD: 9.82 (bullish) • Bollinger Bands: 512.40 (upper) • Gamma: 0.0184 (high sensitivity)

Lockheed Martin’s technicals and options activity point to a high-conviction breakout trade. The stock is trading above its 200-day MA with RSI in neutral territory, suggesting room for further gains. The $515–$520 call options chain is the most liquid, with LMT20260116C520 (strike $520) and LMT20260116C515 (strike $515) standing out. These contracts offer a balance of leverage, liquidity, and time decay resistance, making them ideal for capitalizing on the Trump-driven rally.

• LMT20260116C520
- Code: LMT20260116C520
- Type: Call
- Strike: $520
- Expiry: 2026-01-16
- IV: 26.56% (moderate)
- Leverage: 71.49% (high)
- Delta: 0.4539 (moderate sensitivity)
- Theta: -0.8251 (rapid time decay)
- Gamma: 0.0184 (high sensitivity)
- Turnover: 984,434 (extremely liquid)
- Payoff at 5% upside: $14.01 (max(0, 542.57 - 520))
- Why it stands out: High leverage and liquidity make this ideal for a 5% upside scenario, with gamma amplifying gains as the stock rises.

• LMT20260116C515
- Code: LMT20260116C515
- Type: Call
- Strike: $515
- Expiry: 2026-0116
- IV: 26.42% (moderate)
- Leverage: 53.84% (high)
- Delta: 0.5463 (moderate sensitivity)
- Theta: -0.8897 (rapid time decay)
- Gamma: 0.0185 (high sensitivity)
- Turnover: 410,889 (very liquid)
- Payoff at 5% upside: $27.57 (max(0, 542.57 - 515))
- Why it stands out: Lower strike price offers higher intrinsic value, with gamma amplifying gains as the stock approaches $515. Ideal for a conservative breakout play.

Action Alert: Aggressive bulls should prioritize LMT20260116C515 into a break above $515. Conservative traders may scale into LMT20260116C520 as the stock tests its 52-week high. Both contracts benefit from high gamma and liquidity, making them ideal for a Trump-driven rally.

Backtest Lockheed Martin Stock Performance
The backtest of Lockheed Martin (LMT) after a 4% intraday surge from 2022 to the present shows favorable performance metrics. The 3-day win rate is 51.98%, the 10-day win rate is 55.16%, and the 30-day win rate is 52.58%, indicating that the stock tends to experience positive returns in the short term following the surge. The maximum return during the backtest period was 1.55%, which occurred on day 59 after the surge, suggesting that while the returns were generally modest, there were opportunities for gains.

LMT’s Trump-Driven Surge: Time to Ride the Wave or Cash In?
Lockheed Martin’s 4.09% surge is a textbook case of political tailwinds meeting technical momentum. With Trump’s $1.5 trillion budget proposal and recent contract wins, the stock is primed for a breakout above $542.87. The options chain’s liquidity and leverage ratios suggest a high-conviction trade, particularly in the $515–$520 strike range. Sector leader Northrop Grumman (NOC) is up 2.22%, reinforcing the sector’s alignment with Trump’s agenda. Act now: Buy LMT20260116C515 for a conservative breakout play or LMT20260116C520 for aggressive upside potential. Watch for a close above $515 to confirm the trend.