This article looks at the defense stocks that are declining this week.
European defense stocks have rallied this year as governments faced pressures to increase military spending. During the week of March 3, several stocks registered double-digit growth, with some even recording all-time 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.
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The United States has repeatedly called for Europe to spend more on defense, stressing it could no longer foot the bill. EU leaders met in Brussels on 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.
Countries are also ramping up defense expenditure on an individual-level. A conservative victory in Germany is also adding to the momentum. 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.
In contrast, the defense sector in the US has been shaky 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. The creation of DOGE is also reshaping investors’ views of the industry.
Defense stocks wobbled over the past week after a contentious meeting at the Oval Office between Trump and Ukrainian leader, Volodymyr Zelensky, as investors hoped for the US-Ukraine minerals deal to be signed. Shares also fell sharply in February after the US President suggested the country could rapidly cut military spending in the future.
Byron Callan, managing partner at Capital Alpha Partners, believes there is a high level of uncertainty in the U.S. defense sector related to current and future programs and the likelihood of severe cuts to government workforces.
According to a report in the Financial Times on February 24, shares of the six largest American defense companies have fallen 4% under Trump’s second term. Whereas, Europe’s top defense groups have returned gains of around 40% during the same period.
Several Korean companies have also emerged as winners as they tapped into Europe’s defense expenditure surge. While the performance of the U.S. defense sector was lagging behind Europe and Asia well before the presidential elections, the gap has widened after Trump’s victory.
Let’s now head over to the list of defense stocks that are declining 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.
A security guard patrolling a defense facility, protecting critical technologies.
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week (March 3-7). From there, we picked the top 10 stocks with the highest percentage decline in share price during this period. All data is as of the close of business on Friday, March 7, 2025.
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10. The Boeing Company (NYSE:BA)
Weekly Decline: -11.71%
The Boeing Company (NYSE:BA) is a leading aerospace company that manufactures commercial airplanes, space systems, and defense equipment for customers in over 150 countries.
The company’s challenges have been aggravated this year by new tariffs imposed by the Trump administration. The Boeing Company (NYSE:BA) has slumped 11.71% over the past week after CEO Kelly Ortberg told employees the tariffs could drive up costs and cause disruptions in the supply chain.
Investor sentiment was further dented on Friday after a federal judge ruled that The Boeing Company (NYSE:BA) must face shareholder class action for the 737 MAX 9 blowout incident in January 2024. The judge also accused the company of prioritizing profit over passenger and aircraft safety.
9. AMMO, Inc. (NASDAQ:POWW)
Weekly Decline: -12.50%
AMMO, Inc. (NASDAQ:POWW) designs, produces and markets ammunition for law enforcement and military agencies, recreational shooters, hunters, and individuals requiring self-defense. It owns GunBroker.com, which is one of the world’s largest online marketplaces for firearms and shooting accessories.
On February 25, the company announced it had received an additional deficiency notification from NASDAQ for its failure to timely file its quarterly results for the period ended December 31, 2024. The notice stated that AMMO, Inc. (NASDAQ:POWW) was not in compliance with NASDAQ’s listing rules, and had until March 6 to submit an updated plan to regain compliance.
AMMO, Inc. (NASDAQ:POWW)’s share price has been sliding since receiving the notice. The stock slumped 12.50% during the past week, with a 4.11% dip on Friday.