This article looks at the defense stocks that are declining this week. We also discuss how American defense stocks have failed to capitalize on the global rally and analysts’ future outlook for the sector.
Defense stocks across the world are witnessing an unprecedented bull run and soaring to new heights as European governments unlock billions to supercharge their militaries. Stocks in Europe have rallied this year, with several companies in the sector registering double-digit returns. Asian contractors in South Korea and India are also benefiting from the splurge.
READ ALSO: 10 Best Performing Defense Stocks So Far in 2025 and 13 Best Defense Stocks to Buy According to Billionaires.
However, defense stocks in the US have struggled this year due to concerns about government budget cuts. President Trump has 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.
Despite a shaky start to 2025, analysts at UBS are optimistic about the sector as they believe the downside is shrinking. 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, in a note to clients on March 5, also urged investors about this being the right time to buy American defense stocks. While the analyst acknowledged that the world may be moving toward a multi-polar order, he argued that it was not any less dangerous to decrease the need to acquire tools of deterrence.
Gursky also stated 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.
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 companies. Their share prices could go high or low in the future, depending on external market conditions, industry-specific challenges, and the company’s capabilities. Additional research and caution are advised before making investment decisions.
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Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week (March 24-28). 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 28, 2025.
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10. Coda Octopus Group, Inc. (NASDAQ:CODA)
Weekly Decline: -8.52%
Coda Octopus Group, Inc. (NASDAQ:CODA) is an established supplier to the Underwater/Subsea market. The company sells technologies and equipment for 3D imaging, mapping, defense, and survey applications.
During its Q1 2025 earnings call on March 17, Coda Octopus Group, Inc. (NASDAQ:CODA) reported a total revenue of $5.2 million, up 16.8% from last year. Gross margin stood at 65.8%, compared to 69.2% during the prior year’s period. Net income after taxes grew 44.9% year-over-year to $0.91 million. Diluted EPS was logged at 8 cents, falling short of the $0.10 forecast.
Coda Octopus Group, Inc. (NASDAQ:CODA) expects Q2 to be quiet for business but anticipates robust performance from Q3 and onwards. Following the results, Alliance Global Partners lowered the stock’s price target to $8 from $10. It is among the defense stocks that are declining this week, with an 8.52% dip during the period.
9. Planet Labs PBC (NYSE:PL)
Weekly Decline: -8.71%
Planet Labs PBC (NYSE:PL) provides global daily satellite imagery and geospatial solutions.
With an 8.71% dip since March 24, it is among the defense stocks that are declining this week. Shares have fallen since the company announced financial results for the fourth quarter of the fiscal year 2025 on March 20 and missed analysts’ estimates for both revenue and earnings.
For the full year, revenue increased 11% from last year to $244.4 million, with a GAAP net loss per share of $0.42 and a non-GAAP net loss per share of $0.20. Following the results, Cantor Fitzgerald reiterated Planet Labs PBC (NYSE:PL)’s Overweight rating and maintained the stock’s price target at $6.3 per share.