We recently published a list of 13 Best Defense Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Northrop Grumman Corporation (NYSE:NOC) stands against other best defense stocks to buy according to billionaires.
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.
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).
An aeronautics engineer inspecting a model aircraft engine in a factory setting.
Northrop Grumman Corporation (NYSE:NOC)
Number of Billionaires: 14
Billionaire Holdings: $1,635,472,404
Northrop Grumman Corporation (NYSE:NOC) is one of the largest defense contractors in the world. The stock has made steady gains over the past week on the back of recent high-value contracts. It is one of the best defense stocks to buy now.
On February 14, Northrop Grumman Corporation (NYSE:NOC) announced receiving two contracts, both focused on Integrated Battle Command System, with a total value of $1.4 billion, to modernize the air and missile defense capabilities of the United States and Poland.
Later in the month on February 20, the company signed a Memorandum of Understanding with Hanwha Systems to produce ALMDS hardware components for South Korea’s Mine Countermeasures Helicopter program.
Northrop Grumman Corporation (NYSE:NOC) is also a major player in the autonomous aerial systems sector. It is the maker of the MQ-4C Triton – one of the most advanced maritime ISR UAVs deployed today. It is reported that the company recently completed testing of the third MQ-4C Triton ordered by Australia, with delivery set to take place later this year.
Northrop Grumman Corporation (NYSE:NOC)’s financial performance remains robust. Sales climbed 4% in fiscal 2024 to reach $41 billion, driven by continued demand for weapons. Net awards for the year totaled $50.6 billion, enabling the company to end the year with a record backlog of $91.5 billion.
Wall Street analysts are bullish on the stock, with a consensus Buy rating and an average share price upside potential of 14%. According to Insider Monkey’s database for Q4 2024, 14 billionaires held a stake in the company.
Overall, NOC ranks 3rd on our list of best defense stocks to buy according to billionaires. While we acknowledge the potential of NOC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NOC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
