10 Best American Defense Stocks To Buy According to Hedge Funds

5. Northrop Grumman Corporation (NYSE:NOC)

Number of Hedge Fund Holders: 49

Northrop Grumman Corporation (NYSE:NOC) is a prominent defense contractor, recognized for its advanced aircraft systems and pivotal role in national security. With 95,000 employees and annual revenues exceeding $30 billion, it ranks among the world’s leading producers of military technology and weaponry.

The company has made significant progress in defense partnerships and contracts, including an expanded collaboration with Denmark’s Terma to focus on uncrewed aerial systems, electronic warfare, and missile defense. It also secured a $161 million contract from the U.S. Navy to produce and deliver JCREW/DRAKE 2.0 systems, a cutting-edge electronic countermeasure technology.

In addition, the defense contractor has made significant strides with AI, having included the tech’s capabilities to its Forward Area Air Defense (FAAD) Advanced Battle Manager (ABM) system, enhancing real-time decision-making for U.S. military forces, allies, and coalition partners.

On October 25, Susquehanna reaffirmed its Positive rating on Northrop Grumman Corporation (NYSE:NOC) and raised its price target from $560 to $625. The upgrade followed Northrop Grumman’s third-quarter earnings beat, driven by higher operating margins and stronger financial performance. The company reported $730 million in free cash flow for the quarter, signaling solid progress toward its full-year 2024 free cash flow target of $2.5 billion.