There is carnage in the US stock market as the major indices continue to shed points after last week’s aggressive selloff. The Dow was down over 2% with the S&P losing nearly 3% of its value. Nasdaq continued to be the worst of the three, down 4% by market close.
As tariffs continue to spook markets, we look at sectors that are either a safer bet amid the volatility, or provide near-term growth opportunities. In the Aerospace and Defense Industries, such an opportunity is currently presenting itself.
The US is signaling to the rest of the world that it needs to spend more on its own defense rather than relying on the US for military aid. This is making major economies of the world rethink their defense budget allocations.
Since most of the Western world buys its military equipment from the US, the money is eventually going to flow into US companies. This simple bullish thesis is what’s driving the industry and we believe it is time for investors to take positions in these stocks to benefit from this.
To come up with the list of 10 buy and forget Aerospace and Defense stocks for Trump’s Presidency, we only considered stocks with a market cap of at least $2 billion that are the best performers so far in 2025.
An aerial view of a commercial jetliner in flight, its airframe glinting in the sun.
10. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Kratos Defense & Security Solutions, Inc. is a technology company that serves national security, commercial, and defense markets. It operates in Unmanned Systems and Kratos Government Solutions segments. The stock is up 10% for the year despite an 18% correction from its February highs.
The company’s hypersonic missiles are exciting investors. These are unmanned missiles that are so new that there is very limited technology to intercept or counteract them. This has helped the company win a contract with the US defense forces for improving the country’s hypersonic missile capabilities, a necessity after Russia successfully used the technology in Ukraine.
The 5-year contract is important for multiple reasons. It is the largest in the company’s history, so the financial aspect will boost the stock’s performance. However, long-term investors have their eyes on another prize.
By collaborating with the government at the testing stage, KTOS is setting itself up to be a critical part of the United States’ hypersonic capabilities, something both China and Russia actively seek to neutralize to protect their own nuclear weapons.
This means the demand for these weapons isn’t going anywhere and if KTOS can cement its position and perfect the technology, the dollars will eventually flow and trickle down to the investors.
9. Northrop Grumman Corporation (NYSE:NOC)
Northrop Grumman Corporation is a defense and aerospace technology company. The company operates through Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems segments.
NOC is expected to generate significant additional revenue from Europe’s increasing focus on defense spending. Donald Trump has already called out for Europe to get its act together and reduce its reliance on the US for defense. French President Emmanuel Macron has asked Europe to up its defense budget with some of the eastern European countries expected to significantly boost their spending.
NOC’s diverse customer base means it is protected from any negative impact on local defense spending while making full use of Europe’s increased spending in the wake of geopolitical issues.
The stock has a highest price target of $600 according to one analyst, with the median forecast at $547 according to ratings from 26 different analysts.