This article looks at the 13 best defense stocks to buy according to billionaires. We also discuss how the sector has performed this year in the United States and Europe as countries step up to end the war in Ukraine.
Defense stocks wobbled over the past week after a contentious meeting at the Oval Office between President Trump and the visiting Ukrainian leader, Volodymyr Zelensky as investors hoped for the US-Ukraine minerals deal to be signed.
The sector has struggled since Trump’s return to the White House, amid mixed statements on military expenditure throughout his campaign and the early days of his second stint. Shares fell sharply on February 13 after the President hinted at cutting defense spending in the future. The creation of DOGE is also reshaping investors’ views of the industry.
READ ALSO: 10 Best Large Cap Defense Stocks to Buy Now and Why These 15 Defense Stocks Are Skyrocketing So Far In 2025.
In contrast, European defense stocks have rallied this year as governments faced pressures to increase military expenditure. Several stocks registered double-digit growth during the week of March 3, with some even reaching record highs. Investor sentiment picked up after the European Summit in London, where leaders from the EU and NATO met to express their support for Ukraine, following the recent Zelensky-Trump spat.
Washington has repeatedly called for European countries to spend more on defense, while stressing that the US could no longer foot the bill. EU leaders met in Brussels this Thursday to discuss the ‘ReArm Europe Plan’, which will allow the bloc to mobilize funds up to $860 million through bonds and relaxed rules on borrowing and spending.
European countries are also ramping up defense on an individual-level. A conservative victory in Germany, signaling the shift to the right in Berlin, is also adding to the momentum. According to a Reuters report, parties in talks to form the nation’s next government are already considering setting up a defense fund. Friedrich Merz, Germany’s next chancellor-in-waiting, has also vowed to relax the country’s strict borrowing rules.
Peter Schaffrik, Global Macro Strategist, at RBC Capital Markets stated the following on the ongoing situation:
It is an inflection point and Europe realises it needs to do the heavy lifting. The German elections have opened the door for more spending. The whole Zelensky-Trump meltdown has fast forwarded everything.
With that said, let’s head over to the list of the best defense stocks to buy.
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Methodology
For this article, we scanned Insider Monkey’s Q4 2024 proprietary database of billionaires’ stock holdings and identified defense stocks from the list. From there, we picked the top 13 stocks with the highest number of billionaires having a stake in them. Where two or more stocks were tied on billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker between them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13 Best Defense Stocks to Buy According to Billionaires
13. TransDigm Group Incorporated (NYSE:TDG)
Number of Billionaires: 9
Billionaire Holdings: $465,048,265
TransDigm Group Incorporated (NYSE:TDG) is an aerospace company that manufactures engineered aircraft components for commercial and military aircraft.
On February 4, TransDigm Group Incorporated (NYSE:TDG) reported a net income of $493 million for the first quarter of fiscal 2025. This represented a 29% increase from last year and was driven by a 12% year-over-year surge in net sales. Adjusted EPS stood at $7.83, growing 9% from the prior year’s quarter.
The strong financial results have led to a bullish sentiment around the stock. Wall Street analysts have a consensus Buy rating for TransDigm Group Incorporated (NYSE:TDG) and anticipate a 7.45% uptick, on average, in its share price. On February 24, UBS upgraded the stock’s rating to Buy from Neutral, citing stabilised aftermarket growth, increased capital deployment, and margin expansion.
The company has also made notable strategic acquisitions over the past year, which are likely to add significant future revenue and further solidify TransDigm Group Incorporated (NYSE:TDG)’s position in the aerospace and defense markets. In June, it acquired Communications & Power Industries’ Electron Device business for $1.385 billion. Later, in July, it completed the $655 million acquisition of Raptor Scientific.
According to Insider Monkey’s database for Q4 2024, 9 billionaires have investments in TransDigm Group Incorporated (NYSE:TDG), with combined holdings of over $465 million, making it one of the best defense stocks to buy according to billionaires.
12. Curtiss-Wright Corporation (NYSE:CW)
Number of Billionaires: 11
Billionaire Holdings: $271,850,814
Curtiss-Wright Corporation (NYSE:CW) provides engineered products, solutions and services for the aerospace and defense markets. It operates through three segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. On January 21, the company was awarded a $27 million contract by the Canadian Commercial Corporation (CCC) to supply Aircraft Ship Integrated Securing and Traversing (ASIST) systems and support for the US Navy’s constellation class frigates. It is part of a five-year IDIQ contract, valued at potentially $100 million.
Earlier in the year, Curtiss-Wright Corporation (NYSE:CW) completed the $200 million acquisition of Ultra Nuclear Limited and Weed Instrument Co., Inc., a manufacturer of reactor protection systems, radiation and neutron monitoring systems, and temperature and pressure sensors to ensure the safe operation of nuclear reactors and other power generation plants.
During its Q4 2024 earnings call on February 12, Curtiss-Wright Corporation (NYSE:CW) reported sales of $3.1 billion for the full year, up 10% from last year. Operating income stood at $529 million, with an operating margin of 16.9%. Adjusted diluted EPS was logged at $10.90, increasing 16% compared to the prior year. Adjusted free cash flow reached a record $483 million during the year. The company is heading into fiscal 2025 with an impressive order backlog of $3.4 billion.
Wall Street analysts are bullish on Curtiss-Wright Corporation (NYSE:CW) with a consensus Buy rating for the stock and an average share price upside potential of 20%. With 11 billionaires holding a stake in the company, it is among the best defense stocks to buy now.