This article looks at defense stocks that are gaining this week.
The world has been rocked by conflict over the last three years, with Ukraine and the Middle East being the most intense theatres of war. While the human impact of these conflicts has been tragic, the defense industry has profited by luring investors into piling up their stocks. Several of the world’s top contractors have seen their shares book all-time highs.
READ ALSO: 10 Best Large Cap Defense Stocks to Buy Now and 8 Best Military Drone Stocks To Buy According to Analysts.
Defense stocks have been volatile this month, with shares falling sharply on February 13 after Trump suggested the country could rapidly cut military spending in the future. He made these comments in the context of a potential future conference with China and Russia to discuss cutting defense expenditure to spend the money in other areas:
“When we straighten it all out, then one of the first meetings I want to have is with President Xi of China and President Putin of Russia, and I want to say let’s cut our military budget in half. And we can do that, and I think we’ll be able to do that.”
The US president has shared mixed statements on defense spending throughout his campaign and the early days of his second stint. Trump has appointed Elon Musk to lead the Department of Government Efficiency (DOGE), which will work outside the federal stream and aims to improve governance by reducing wasteful spending, cutting unnecessary regulations, and restructuring federal agencies.
However, stocks have picked up over the past week as European governments faced pressure to increase military spending following a meeting between American and Russian officials in Saudi Arabia over Ukraine. British Prime Minister Keir Starmer has said that it is crucial for Europe to spend more on defense. Here are some other comments from Mr. Starmer:
“We’re facing a generational challenge when it comes to national security. I think there’s a bigger piece here as well, which is that this isn’t just about the front line in Ukraine. It’s the front line of Europe and of the United Kingdom. It’s about our national security and I think that we need to do more.”
Defense stocks continue to rally this week after a conservative victory in Germany, signaling the shift to the right in Berlin. According to a Bloomberg report, Friedrich Merz, the country’s chancellor-in-waiting, has already opened talks between the Christian Democrats and Social Democrats over a $210 billion emergency defense fund.
Officials from the two parties are working to find ways to come around Germany’s strict restrictions on government borrowing. Merz has promised to ramp up military expenditure, but his plans were upset by fringe parties winning a blocking minority in the parliamentary elections.
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.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week. 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, February 24, 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).
10. General Dynamics Corporation (NYSE:GD)
Weekly Gains: 1.79%
General Dynamics Corporation (NYSE:GD) is a leading global aerospace and defense company, operating through its Aerospace, Marine Systems, Combat Systems, and Technologies segments.
The company’s share price fell sharply on February 13 after Trump suggested he would cut defense spending in the future. However, over the past week, General Dynamics Corporation (NYSE:GD) has gained nearly 2% after European leaders met in response to recent developments between Russia and the United States to end the war in Ukraine.
On January 29, the company reported strong results for the full year 2024, with steady growth in revenue and earnings across all business segments. Net earnings were posted at $3.8 billion, up 14.1% year-over-year, while revenue surged 12.9% from 2023, to reach $47.7 billion.
General Dynamics Corporation (NYSE:GD) was recently awarded a five-year, $5.6 billion Mission Partner Environments (MPEs) contract, under which it would modernize, integrate, operate, and sustain the DoD’s MPE to ensure that the military and its partners can have secure communication and share real-time information at all levels to make rapid decisions to adapt to changing mission dynamics.
9. RTX Corporation (NYSE:RTX)
Weekly Gains: 2.47%
RTX Corporation (NYSE:RTX) is an aerospace and defense company that provides advanced systems and services to commercial, military, and government clients. It is among the defense stocks that are gaining this week, having risen 2.47% during the period.
On February 20, the U.S. Air Force awarded RTX Corporation (NYSE:RTX) a $1.5 billion sustainment contract for the F119 engines, that power the F-22 fighter jets. The contract will run for three years and will help improve the readiness of the fleet.
This week, RTX Corporation (NYSE:RTX) announced the successful flight testing completion of the first-ever AI/ML-powered Radar Warning Receiver for a fourth-generation aircraft. The new technology will enhance aircrew survivability and facilitate the deployment of AI/ML capabilities.
On February 24, UBS upgraded RTX Corporation (NYSE:RTX)’s rating from Neutral to Buy and raised its price target to $147 from $142. The bank cited international defense growth, improvements in the engine program, and margin recovery, as key earnings drivers.
