We recently published a list of Why These Defense Stocks Are Gaining This Week. In this article, we are going to take a look at where Karman Holdings Inc. (NYSE:KRMN) stands against other defense stocks that are gaining this week.
European markets closed higher on Tuesday after Germany’s parliament voted in favor of a historic fiscal package, which includes reforms to long-standing debt policies to allow for higher defense spending. Investors across the world are also keeping a close eye on the situation in Ukraine, after Trump and Putin agreed to an immediate ceasefire for energy and infrastructure in the war that has been on since early 2022.
READ ALSO: 11 Best American Defense Stocks to Buy Now and 13 Best Defense Stocks to Buy According to Billionaires.
Trump’s pivot on Ukraine has fueled robust gains in defense stocks in Europe, where several armament contractors have seen double-digit growth this year, with some even reaching record highs, as European capitals faced pressures to raise defense spending. Korean defense companies have also benefited from the splurge, whereas American defense stocks have largely failed to capitalize on the global rally.
In contrast, America’s defense sector has struggled since Trump’s return to the White House due to mixed statements on future defense spending. The creation of DOGE has also reshaped investors’ views of the industry.
On March 3, the Pentagon, working with DOGE, found some $80 million in what it deemed wasteful funding, which included funds devoted to diversity, equity and inclusion programs, and climate change research. Press Secretary Sean Parnell made the following remarks in a statement posted on X while stating these actions were ‘just the start’:
“This stuff is not a core function of our military. This is a distraction. We believe that these initial findings will probably save $80 million in wasteful spending.”
Despite the downturn, Citi analyst, Jason Gursky, believes this is the right time to invest in American defense stocks. Here is what he wrote in a note to clients on March 5:
“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 further argued 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 multi-polar world order, defense spending is expected to remain robust, which would benefit stocks in the sector.
In a recent positive development, shares of a major naval defense contractor have surged over the past two weeks after President Trump announced to resurrect America’s military and commercial shipbuilding industry, which he sees as vital to national security, given the strategic competition with China.
With that said, let’s now head over to the list of defense stocks that are gaining this week. Please note that the stocks listed are based on one week’s performance. Our analysis does not reflect the prospects of the company. Their share price could go high or low in the future, depending on the external market conditions, industry-specific challenges, and the company’s capabilities. Additional research and caution are advised before making investment decisions.
Photo by SpaceX on Unsplash
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week (March 10-17). From there, we picked the top 10 stocks with the highest percentage gains in share price during this period. All data is as of the close of business on Monday, March 17, 2025.
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).
Karman Holdings Inc. (NYSE:KRMN)
Weekly Gains: 19.70%
Karman Holdings Inc. (NYSE:KRMN) specializes in the manufacturing and sale of mission-critical systems for missile, space, and defense programs.
The company’s share price has been all over the place since its debut on the NYSE in February. The stock has shown signs of volatility, going down for a few days before picking up again. Over the past week, Karman Holdings Inc. (NYSE:KRMN) returned gains of 19.70%, earning it a place in our list of the defense stocks that are gaining this week.
Karman Holdings Inc. (NYSE:KRMN)’s overall prospects look encouraging. Last month, President Trump signed an executive order to mandate the process of building an ‘American Iron Dome’, which presents an opportunity for the company to benefit, given its expertise in areas like hypersonic missile defense. Wall Street analysts are bullish on the stock with a consensus Strong Buy rating and an average share price upside potential of 12.61%.
Overall, KRMN ranks 4th among the defense stocks that are gaining this week. 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 KRMN 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.
