We recently published a list of the 10 Worst Performing Defense Stocks So Far in 2025. In this article, we will take a look at where Safe Pro Group Inc. (NASDAQ:SPAI) stands against other worst performing stocks this year.
US defense stocks have wobbled this year, amid concerns about government budget cuts. In February, President Trump hinted at significantly reducing future military spending if things settle down with China and Russia. The creation of DOGE has also reshaped investors’ views of the industry.
READ ALSO: 10 Best Performing Defense Stocks So Far in 2025 and 13 Best Defense Stocks to Buy According to Billionaires.
Elsewhere, particularly in Europe, stocks have soared this year, with governments unlocking billions to supercharge their militaries. EU leaders met in Brussels in March 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.
Despite a shaky start to 2025, analysts at UBS are hopeful about America’s defense sector and believe the downside is shrinking and the FY26 budget request would present a better visibility into long-term expenditure plans. Here is what the firm recently stated:
“Consensus estimates have moved higher since the election despite the 40% sell-off. The downside potential seems increasingly smaller. We believe that the current environment is markedly different from Sequestration and do not believe a similar outcome is likely.”
Citi analyst Jason Gursky is also urging investors that this is the right time to buy American defense stocks.
“We recognize the world order is evolving under the current President, perhaps to a multi-polar one in which three countries control spheres of influence over the Americas, Europe and Asia. However, we don’t view that world to be any less dangerous or one that decreases the need to acquire the tools of deterrence.”
Gursky argues that as long as the global threat environment remains and the United States maintains its leadership role, regardless of whether it is as a sole superpower or as a power in a multipolar world order, defense spending is expected to remain robust, which would benefit stocks in the sector.
Gursky argues that as long as the global threat environment remains and the United States maintains its leadership role, regardless of whether it is as a sole superpower or as a power in a multipolar world order, defense spending is expected to remain robust, which would benefit stocks in the sector.
An experienced investor staring at a wall of monitors displaying stocks and mortgaged securities.
Methodology
For this article, we went through screeners to identify stocks in the aerospace and defense industry. From there, we picked the top 10 stocks with the worst year-to-date negative returns in share price, as of the close of business on March 26, 2025. Pure-play aerospace stocks that do not deal in defense contracts have been excluded from the list. The stocks are ranked according to their share price decline.
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).
Safe Pro Group Inc. (NASDAQ:SPAI)
YTD Decline in Share Price: -24.07%
Safe Pro Group Inc. (NASDAQ:SPAI) is a leading provider of security and protection solutions, with expertise in advanced AI/ML software technology for small object threat detection.
On March 3, the company appointed Young J. Bang, former Principal Deputy Assistant Secretary of the Army, as Chairman of the Strategic Advisory Board. The decision is in line with Safe Pro Group Inc. (NASDAQ:SPAI)’s commitment to spearhead advanced AI technology into US military systems.
In February, Safe Pro Group Inc. (NASDAQ:SPAI) signed a multi-year agreement with a leading technical university in Ukraine, under which the two organizations will collaborate on utilizing SPAI’s AI-powered drone image processing technology to develop training programs and build enhanced demining methodologies.
Despite these positive developments, shares are down by over 24% year-to-date, landing it a place among the worst performing stocks this year. Safe Pro Group Inc. (NASDAQ:SPAI) has had volatile returns since its IPO in August 2024, likely due to sharp market reactions to news related to the stock.
Another reason behind the stock’s volatility could be a lack of analyst coverage, which is resulting in low investor recognition. The general uncertainty in the aerospace and defense industry is also adversely impacting the returns of several companies in the sector.
Overall, SPAI ranks 9th among the worst performing defense stocks so far in 2025. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPAI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.