This article looks at the defense stocks that are declining this week.
European defense stocks have rallied this year, with several companies in the sector registering double-digit returns, and some even reaching record highs, as regional capitals unlock billions to supercharge their militaries.
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The United States has repeatedly called for Europe to spend more on defense while stressing that Washington could no longer foot the bill. EU leaders met in Brussels earlier this month 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.
A conservative victory in Germany has further added to the momentum. Last week, the country’s parliament voted in favor of a historic fiscal package, which includes reforms to long-standing debt policies to allow for higher defense spending.
Several Asian contractors are also benefiting from Europe’s defense splurge. A leading aerospace and defense company in South Korea has gained over 92% year-to-date, driven by demand for weapons from NATO countries like Poland and Romania. On March 20, The Economic Times reported a 20% increase in India’s defense and shipbuilding stocks, in response to Germany’s big military plans.
In contrast, America’s defense sector has wobbled this year, due to uncertainty around the country’s future military expenditure. The creation of DOGE has also reshaped investors’ views of the industry. While Trump’s pivot on Ukraine has helped fuel the defense industry elsewhere, American stocks in the sector have lagged behind and failed to capitalize on the global rally.
According to a Financial Times report on February 24, shares of the six largest American defense companies had fallen 4% under Trump’s second term. Whereas, Europe’s top defense groups returned gains of around 40% during the same period.
Despite a grim outlook, Citi analyst, Jason Gursky, is urging investors that this is the right time to buy American defense stocks. He 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 multi-polar world order, defense spending is expected to remain robust, which would benefit stocks in the sector.
With that said, 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.
Jordan Tan / Shutterstock.com
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week (March 17-21). From there, we picked the top 10 defense stocks with the highest percentage decline in share price during this period. All data is as of the close of business on Friday, March 21, 2025.
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10. TAT Technologies Ltd. (NASDAQ:TATT)
Weekly Decline: -3.06%
TAT Technologies Ltd. (NASDAQ:TATT) provides services and products for the commercial and military aerospace, and ground defense sectors.
According to a recent report, TAT Technologies Ltd. (NASDAQ:TATT) experienced a significant drop in short interest in February. The company is expected to announce its next earnings on March 26. Shares fell by a little over 3% during the week of March 17.
Despite the dip, TAT Technologies Ltd. (NASDAQ:TATT)’s performance remains impressive. Its shares have climbed 37% in the last 6 months, amid solid financial results and high-value contract awards.
9. AeroVironment, Inc. (NASDAQ:AVAV)
Weekly Decline: -3.43%
AeroVironment, Inc. (NASDAQ:AVAV) designs and manufactures unmanned aerial vehicles, ground robot systems, and loitering munition systems. It is among the defense stocks that are declining this week, with a dip of 3.43% during the period.
The stock has slumped by 19.24% over the past month, with a major fall after the announcement of third-quarter results for fiscal 2025 on March 4. AeroVironment, Inc. (NASDAQ:AVAV) reported a net revenue of $167.6 million, down 10% from last year. It also recorded a net loss of $1.8 million for the quarter, compared to a net income of $13.9 million in the prior year’s period.
Following the earnings call, Baird lowered AeroVironment, Inc. (NASDAQ:AVAV)’s price target to $146 per share from $210. Jefferies also revised the stock’s price target from $230 to $190.
8. Smith & Wesson Brands, Inc. (NASDAQ:SWBI)
Weekly Decline: -5.28%
Smith & Wesson Brands, Inc. (NASDAQ:SWBI) is a firearm manufacturing company. It is one of the leading makers of long guns, handguns, rifles, and other shooting equipment. The company has been operating since 1852 and sells its products to various customers, including competitive shooters, firearm enthusiasts, security agencies, individuals desiring personal protection, sportsmen, and hunters.
On March 6, Smith & Wesson Brands, Inc. (NASDAQ:SWBI) announced financial results for the third quarter of fiscal 2025. Net sales fell 15.7% year-over-year, coming in slightly below the company’s target range. Gross margin was also 4.6% below the comparable quarter last year. Due to softer demand across the industry, the company expects annual revenue for 2025 to be 5% to 10% lower than in fiscal 2024.
Smith & Wesson Brands, Inc. (NASDAQ:SWBI)’s shares fell by over 5% during the week of March 17. It is among the defense stocks that are declining this week.
7. Lockheed Martin Corporation (NYSE:LMT)
Weekly Decline: -5.68%
Lockheed Martin Corporation (NYSE:LMT) is one of the largest defense contractors in the world. The company specializes in the research, design, and development of advanced technology systems, products, and services.
It is among the defense stocks that are declining this week. Shares crashed on Friday after Trump picked Boeing over Lockheed Martin Corporation (NYSE:LMT) to build the Pentagon’s next-generation fighter, the F-47, to replace the stealthy F-22 Raptor.
Lockheed Martin Corporation (NYSE:LMT) shared the following in a press release on March 21, to express disappointment with the outcome:
“We are committed to advancing the state of the art in air dominance to ensure America has the most revolutionary systems to counter the rapidly evolving threat environment. While disappointed with this outcome, we are confident we delivered a competitive solution. We will await further discussions with the U.S. Air Force.”
6. Cadre Holdings, Inc. (NYSE:CDRE)
Weekly Decline: -7.56%
Cadre Holdings, Inc. (NYSE:CDRE) manufactures safety equipment and other related products for protection during hazardous and life-threatening situations. Its offerings include body armor, duty gear, and explosive ordnance disposal equipment, among other products.
On March 11, Cadre Holdings, Inc. (NYSE:CDRE) announced mixed financial results for the fourth quarter of fiscal 2024, beating revenue estimates while missing EPS forecasts. Shares are down 8% since the earnings call, and fell by 7.56% over the past week, amid pessimism among investors.
Cadre Holdings, Inc. (NYSE:CDRE)’s CEO, Warren B. Kanders, sold the company’s shares worth approximately $4.78 million, which may have further contributed toward the dip.
5. Planet Labs PBC (NYSE:PL)
Weekly Decline: -8.89%
Planet Labs PBC (NYSE:PL) provides global daily satellite imagery and geospatial solutions. It is among the defense stocks that are declining this week.
Shares crashed after the company reported financial results for the fourth quarter and full year 2025 on March 20. Heading into the earnings call, analysts expected a $0.02 loss per share on $61.9 million in revenue for Q4. However, Planet Labs PBC (NYSE:PL) reported a quarterly loss of $0.08 per share, with revenue also falling short of estimates, at $61.6 million, with a growth of just 5% from last year.
For the full year, revenue stood at $244.4 million, up 11% year-over-year, with a GAAP net loss per share of $0.42 and a non-GAAP net loss per share of $0.20.
4. Safe Pro Group Inc. (NASDAQ:SPAI)
Weekly Decline: -9.88%
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 February 25, the company announced the signing of a multi-year agreement with a leading technical university in Ukraine, under which the two organizations will collaborate on utilizing Safe Pro Group Inc. (NASDAQ:SPAI)’s AI-powered drone image processing technology to develop training programs and build enhanced demining methodologies.
Since then, Safe Pro Group Inc. (NASDAQ:SPAI) has shown high levels of share price volatility, going up one week, and down the other, despite no positive or negative news coming out from the company. The ongoing fluctuation is likely a result of the general uncertainty in the aerospace and defense industry as a whole.
3. Byrna Technologies Inc. (NASDAQ:BYRN)
Weekly Decline: -12.66%
Byrna Technologies Inc. (NASDAQ:BYRN) manufactures less-lethal equipment and munitions for personal security, private security firms, military, and law enforcement agencies.
The company’s share price has plunged 37% year-to-date, likely due to its high P/E ratio resulting in overvaluation concerns among investors. With a dip of 12.66% over the past week, Byrna Technologies Inc. (NASDAQ:BYRN) is among the defense stocks that are declining this week.
However, in a positive development, Roth MKM, on March 20, maintained its price target of $33 for Byrna Technologies Inc. (NASDAQ:BYRN), while reiterating a Buy rating for the stock. The company also recently announced that its first ammunition production facility in the United States was now operational in Fort Wayne, Indiana, with a capacity to produce 8 million rounds of its proprietary less-lethal ammunition per annum.
2. KWESST Micro Systems Inc. (NASDAQ:KWE)
Weekly Decline: -14.10%
KWESST Micro Systems Inc. (NASDAQ:KWE) is engaged in the development of tactical systems and ammunition for military and security forces. It is among the defense stocks that are declining this week.
Last week, the company shared a press release, providing context on the special shareholder meeting convened on March 31. KWESST Micro Systems Inc. (NASDAQ:KWE) stated that the purpose of the meeting is to seek shareholder approval of a resolution related to a proposed share consolidation.
KWESST Micro Systems Inc. (NASDAQ:KWE)’s share price has crashed by 57% so far this year, as the company faces pressures to regain compliance with NASDAQ’s minimum $1 bid price per share requirement by May 12. As of the close of business on Friday, March 21, the stock was trading at $0.3102 per share.
1. Sidus Space, Inc. (NASDAQ:SIDU)
Weekly Decline: -19.80%
Sidus Space, Inc. (NASDAQ:SIDU) is engaged in the design, manufacture, launch, and data collection of satellites. It serves aerospace, commercial space, and defense industries.
The stock surged 12% last week, following the announcement of the successful launch and deployment of LizzieSat (LS-3) into Low Earth Orbit. However, shares have fallen this week, in what is being seen as a sign of market correction.
From a broader perspective, 2025 has been a difficult year for Sidus Space, Inc. (NASDAQ:SIDU), with its share price declining 68% year-to-date, with the weak financial position being one of the major drivers of the stock’s poor performance. The company has made losses during the first three quarters of fiscal 2024. Its gross profit margin stood at just 2% during Q3 2024 – the most recent declared results.
Overall, Sidus Space, Inc. (NASDAQ:SIDU) ranks first among the defense stocks that are declining 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 SIDU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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