Top 10 Defence Stocks to Watch in 2025

Discover these defence industry stocks to invest in

Data as of 7 January 2025. Source: Stake, Google.

*The list of defence stocks mentioned is ranked by market capitalisation. When deciding what stocks to feature, we analyse the company's financials, recent news, advancement in their timeline, and whether or not they are actively traded on Stake.

Decide which is the best military defence stocks to watch in 2025

1. RTX Corporation ($RTX)

• 2,548 Stake customers watching
• 4,414 orders executed on Stake

RTX Corporation (formerly known as Raytheon) is a Virginia-based firm that serves as America’s second-largest defence contractor, earning $40 billion from the U.S. government in 2023. RTX comprises three divisions: Collins Aerospace, Pratt & Whitney, and Raytheon.

Collins manufactures aircraft for commercial and military purposes. Currently, Collins is engaged in designing vertical lift solutions for the U.S. Army’s future aircraft. Pratt & Whitney is primarily focused on aircraft engines and other ancillary technology. Finally, Raytheon focuses on military technology, weapons manufacturing, and missile defence systems.

RTX’s sales are expected to climb to more than $89 billion by 2026, boosted by growing defence demand for advanced missiles. The company’s growth, however, could be affected by the U.S. government’s recent determination that RTX defrauded the Department of Defence to the tune of hundreds of millions of dollars since 2012.[1]

2. Boeing Co ($BA)

• 10,620 Stake customers watching
• 33,376 orders executed on Stake

While well-known to consumers as a commercial aircraft manufacturer, Boeing also performs significant defence contracting work for the U.S. government. In 2023, Boeing was the U.S. government’s 5th largest defence contractor, earning nearly $33 billion.

Boeing’s defence division specialises in military aircraft, notably including both the B52 bomber and Chinook transport helicopters.[2] However, Boeing only earns about a third of its revenue from its defence division. As a result, the company is not a pure-play defence stock, and investors will be exposed to Boeing’s well-publicised troubles in its commercial aircraft division.

3. Lockheed Martin Corporation ($LMT)

• 5,811 Stake customers watching
• 9,826 orders executed on Stake

Lockheed Martin is a global defence technology company based in Maryland whose operations span everything from weapons manufacturing to digital security. Lockheed is a world leader in aeronautics engineering and was selected as the primary contractor to design the next-generation F-35 Lighting II fighter jet for the U.S. government.

In 2023, Lockheed was the world’s leading defence contractor, earning nearly $65 billion from the U.S. government. Analysts expect Lockheed’s total sales to climb to nearly $77 billion by 2026, with the company recently securing notable long-term contracts for both aircraft and missile manufacturing.[3]

🆚 Compare stock performance of LMT vs RTX→

4. General Dynamics ($GD)

• 1,526 Stake customers watching
• 1,525 orders executed on Stake

General Dynamics is America’s 4th largest military contractor, earning just under $34 billion in contracts in 2023. The company also has a notable presence in the commercial business jet market, manufacturing the popular Gulfstream series.

In terms of defence work, General Dynamics has a strong association with marine projects. The company is responsible for producing America’s nuclear submarines, including the current Virginia class and the next-generation Columbia class subs. General Dynamics also manufactures destroyers for the U.S. Navy and the Abrams tank for the U.S. Army.

By 2026, analysts expect General Dynamics to grow sales to more than $52 billion, bolstered by the company’s recent expansion in providing IT infrastructure and services to the U.S. government.[4]

5. TransDigm Group Incorporated ($TDG)

• 368 Stake customers watching
• 463 orders executed on Stake

TransDigm is an Ohio-based company that designs and manufactures proprietary aircraft equipment. In 2023, TransDigm earned $2.5 billion from the U.S. government.

TransDigm primarily sells avionics, the electronic systems necessary for modern planes to fly. The company sells to both public and private buyers, with the government accounting for about 40% of sales.

Thanks to robust demand for such advanced equipment, analysts expect healthy sales growth, with total revenue forecast to climb to just under $10 billion by 2026. For investors looking to back a specialised defence contractor that retains significant commercial exposure, TransDigm could be a good fit. 

6. Northrop Grumman Corporation ($NOC)

• 1,725 Stake customers watching
• 1,743 orders executed on Stake

Like competitor Lockheed Martin, Northrop Grumman is a diversified defence contractor that serves as one of the leading military suppliers to the U.S. government. In 2023, Northrop Grumman was the U.S. government’s 3rd largest defence contractor, winning $35 billion in contracts.

Historically, Northrop Grumman has had a strong association with space, from manufacturing the original Apollo lunar module to recent contracts with the U.S. Space Force. Recently, the company’s focus on naval projects has been expanding, including a collaboration on a next-generation surveillance submersible with America’s secretive DARPA research group.[5] By 2026, analysts expect Northrop Grumman’s sales to grow to $45 billion, boosted by the deployment of the company’s B-21 stealth raider.

7. L3Harris Technologies Inc ($LHX)

• 607 Stake customers watching
• 747 orders executed on Stake

L3Harris is a Florida-based company that specialises in military software, especially command & control systems and autonomous weaponry. Earning $15.5 billion from the U.S. government in 2023, L3Harris is America’s sixth-largest defence contractor.

Although L3Harris does sell some of its products commercially, about three-fourths of the firm’s revenue stems from government contracting. Recently, the firm secured a $1 billion long-term contract with the U.S. Navy to provide next-generation communications equipment.[6]

8. Leidos Holdings, Inc. ($LDOS)

• 405 Stake customers watching
• 553 orders executed on Stake

Leidos is a specialised American defence contractor, earning $11 billion from the U.S. government in 2023 as the nation’s 8th largest contractor. Unlike previous companies on this list, Leidos primarily focuses on providing the government with technological and scientific expertise, rather than physical weapons systems.

Leidos has four separate divisions, with individual focuses on national security, health, defence, and commercial solutions. The first three of these segments primarily contract with the U.S. government, providing digital infrastructure to organisations like the Department of Homeland Security and Department of Defence.

In 2023, Leidos earned 87% of its revenue from the U.S. government. The company’s sales are expected to grow slightly slower than competitors, climbing to $17 billion by 2026.

9. Curtiss-Wright Corp ($CW)

• 48 Stake customers watching
• 53 orders executed on Stake

Like TransDigm, Curtiss-Wright is a specialised manufacturer of advanced aircraft equipment, serving both civilian and government markets. Based in North Carolina, Curtiss-Wright earned $1.5 billion from the U.S. government in 2023, accounting for about 70% of total sales.

In addition to avionics and flight control systems, Curtiss-Wright also provides networking and computing devices, and advanced sensors. Notably, the company secured significant contracts with both the U.S. Navy and the Belgian Air Force this year. By 2026, analysts expect the firm’s total sales to grow to nearly $3.5 billion.  

10. Kratos Defence & Security Solutions Inc ($KTOS)

• 712 Stake customers watching
• 1,726 orders executed on Stake

Kratos Defence & Security Solutions is a California-based military electronics company. As of 2023, the firm is a relatively niche contractor, earning $715 million from the U.S. government.

While Kratos is relatively smaller than many of the major defence contractors we’ve discussed, their product suite could make them well-suited for the future of warfare. The company’s solutions include surveillance drones, autonomous fighter jet systems, and mixed-reality training modules.[7] Analysts are expecting healthy sales growth, with revenue forecast to hit $1.4 billion by 2026.

Which military stock has seen the best growth in 2024?

Of the stocks on this list, Curtiss-Wright has seen the best growth over the last year, climbing 61.69% as of 7 January 2025. While some defence contractors like Lockheed Martin or RTX seem to do a bit of everything, Curtiss-Wright takes the opposite approach, specialising deeply in niche aircraft equipment. As global turmoil has increased the need for advanced military aircraft, Curtiss-Wright has reaped the rewards, posting continual quarterly earnings growth this year.

List of defence ETFs to watch

Here are three defence ETFs worth considering today:

• Invesco Aerospace & Defence ETF ($PPA): The Invesco Aerospace & Defense ETF boasts a total expense ratio of 0.57% and YTD growth of 29.4%. This ETF focuses on diversified exposure within the defence industry, with top holdings including Boeing, RTX, and GE Aerospace.  
• iShares U.S. Aerospace & Defence ETF ($ITA): The iShares U.S. Aerospace & Defence ETF has an expense ratio of just 0.40% and a YTD return of 18.9%. Like PPA, ITA seeks diversified defence exposure, although the two funds track different indexes. This ETF’s top holdings include GE Aerospace, RTX, and Lockheed Martin.
• SPDR® S&P Kensho Future Security ETF ($FITE): As the name suggests, the S&P Kensho Future Security ETF focuses on those companies that are innovating next-generation warfare and security technology. The ETF has an expense ratio of 0.45% and YTD growth of 26.2%. The fund’s top holdings are Rocket Lab, Fortinet, and F5.

Defence ETFs on the ASX

• Betashares Global Defence ETF ($ARMR): This ETF offers broad exposure to the global defence sector, investing in companies involved in activities like aerospace, defence technology, and military equipment manufacturing. Some of it's top holdings include companies from this list, such as RTX Corp ($RTX), General Dynamics ($GD) and Northrop Grumman ($NOC).
• VanEck Global Defence ETF ($DFND): The VanEck Global Defence ETF provides exposure to companies involved in emerging and disruptive technologies crucial to the future of defence, including cybersecurity, space technology, and advanced materials. Two of DFND's top holdings include Palantir ($PLTR) and Leidos ($LDOS).
• Global X Defence Tech ETF ($DTEC): Focused on the future of defence, DTEC invests in companies developing technologies like artificial intelligence, drones, and cybersecurity for military applications. The top holdings is Palantir ($PLTR), followed by RTX Corp ($RTX).

Are defence stocks a good buy?

Whether defence stocks are a good buy depends on your specific investment goals and risk tolerance. Because the performance of defence stocks tends to be correlated to factors like geopolitical tensions, they can potentially offer strong portfolio diversification. However, abrupt changes to government budgets can also have a strong influence on the industry. If the trend toward increased global warfare continues, defence contractors could be strongly situated to benefit.

Disclaimer

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. When you invest, your capital is at risk. You should consider your own investment objectives, financial situation, particular needs. The value of your investments can go down as well as up and you may receive back less than your original investment. As always, do your own research and consider seeking appropriate financial advice before investing.

Any advice provided by Stake is of general nature only and does not take into account your specific circumstances. Trading and volume data from the Stake investing platform for reference purposes only, the investment choices of others may not be appropriate for your needs and is not a reliable indicator of performance.

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Article sources

[1] Raytheon Company to Pay Over $950M in Connection with Defective Pricing, Foreign Bribery, and Export Control Schemes

[2] Defense | Boeing

[3] Lockheed Martin secures $870M contract for F-35 Lot 20 production

[4] General Dynamics wins $5.6B info sharing support contract

[5] Manta Ray | Northrop Grumman

[6] US Navy Awards L3Harris Nearly $1 Billion IDIQ Contract

[7] Technologies | Kratos