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.
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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.
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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. 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.
8. Northrop Grumman Corporation (NYSE:NOC)
Weekly Gains: 2.52%
Northrop Grumman Corporation (NYSE:NOC) is one of the largest defense contractors in the world. While the company’s share price has dropped 4% this year, it has shown signs of resurgence over the past week following the announcement of critical high-value contracts.
On February 12, the company was awarded two contracts worth $1.4 billion to modernize the air and missile defense capabilities of the United States and Poland. Both contracts are focused on the Integrated Battle Command System (IBCS) to help Washington and its allies stay ahead of emerging threats.
Later on February 20, Northrop Grumman Corporation (NYSE:NOC) signed a Memorandum of Understanding with Hanwha Systems to produce ALMDS hardware components for South Korea’s Mine Countermeasures Helicopter (KMCH) program.
During its Q4 2024 earnings call on January 30, Northrop Grumman Corporation (NYSE:NOC) reported a 4% increase in net sales for the fiscal year to reach $41 billion. Net awards for the year totaled $50.6 billion, while it ended the year with a record backlog of $91.5 billion.
7. Lockheed Martin Corporation (NYSE:LMT)
Weekly Gains: 4.04%
Lockheed Martin Corporation (NYSE:LMT)’s share price has plummeted 10% this year, especially after Q4 2024 earnings call on January 28 in which the company shared a cautious profit outlook for fiscal 2025. However, the stock gained 4.04% over the past week amid recent contract awards.
Last week, the company clinched a $233 million contract to procure extra-long-lead-time materials to support the production of Lot 10 of the Marine Corps’ CH-53K helicopter. Lockheed Martin Corporation (NYSE:LMT) also secured a $28 million modification contract for the F-35 Joint Strike Fighter Jet Program.
Earlier this month, Lockheed Martin Corporation (NYSE:LMT) was awarded a $2.8 billion THAAD development contract by the Missile Defense Agency (MDA) for a period of five years.
Wall Street analysts are bullish on Lockheed Martin Corporation (NYSE:LMT), with a consensus Buy rating for the stock. They also anticipate an average share price upside potential of 25%.
6. HEICO Corporation (NYSE:HEI-A)
Weekly Gains: 4.29%
HEICO Corporation (NYSE:HEI-A) is an aerospace and technology company that manufactures jet engines and aircraft parts.
For the past several decades, it has supported the government through activities such as reverse engineering, manufacturing aircraft engines and parts, and repair and maintenance services.
The company is set to announce financial results for the first quarter of fiscal 2025 on February 26. Wall Street analysts expect HEICO Corporation (NYSE:HEI-A) to post quarterly earnings per share of $0.93, reflecting a 13.4% year-over-year increase. Revenues are also forecast to grow by 8.3% compared to the prior year’s quarter.
HEICO Corporation (NYSE:HEI-A)’s share price has gained more than 4% over the past week in the countdown to the earnings call. Wall Street analysts are bullish on the stock, with a consensus Buy rating.
5. Huntington Ingalls Industries, Inc. (NYSE:HII)
Weekly Gains: 4.68%
Huntington Ingalls Industries, Inc. (NYSE:HII) is an American defense company, with expertise in shipbuilding. It is among the defense stocks that are gaining this week.
The company’s shares are down 17% over the past month, with a major dip occurring after its Q4 2024 earnings call on February 6. It reported a revenue of $3 billion for the fourth quarter, down 5.4% from last year, due to lower volume across all segments. Huntington Ingalls Industries, Inc. (NYSE:HII)’s quarterly net earnings also declined by 55.1% year-over-year.
However, the stock has had a lift after Citigroup on February 19 lowered its price target for Huntington Ingalls Industries, Inc. (NYSE:HII), but maintained its Buy rating. While no further details were provided in the note, it has certainly helped the stock bounce back.
Huntington Ingalls Industries, Inc. (NYSE:HII) is a vital player in America’s defense sector, as it is spearheading the Gerald R. Ford Aircraft Carrier Program.
4. Hyperscale Data, Inc. (NYSE:GPUS)
Weekly Gains: 5.00%
Hyperscale Data, Inc. (NYSE:GPUS) is an advanced data center solutions provider. Its services include data center management, colocation, cloud hosting, and managed services solutions.
The company also provides customized solutions for military markets in different parts of the world. In December last year, its subsidiary, TurnOnGreen, was awarded a $3.9 million defense contract related to tactical power switching and charging systems, defense-grade power conversion modules, and proprietary power distribution solutions.
Hyperscale Data, Inc. (NYSE:GPUS)’s share price has gained 5% over the past week after the company announced on February 19 that it had reached an agreement with Key Utility to expand the data center in Michigan from 30 MW to 300 MW. This is expected to allow the company to significantly advance its artificial intelligence infrastructure.
On February 18, Hyperscale Data, Inc. (NYSE:GPUS) also declared a monthly cash dividend of $0.2708333 per share of its 13% Series D Cumulative Redeemable Perpetual Preferred Stock.
3. Astronics Corporation (NASDAQ:ATRO)
Weekly Gains: 8.05%
Astronics Corporation (NASDAQ:ATRO) provides advanced technologies to global aerospace, defense, and electronics clients. Some of its offerings include lighting and safety systems, aircraft electronics integration, automated test systems, and distribution and motion systems, among other products and services.
The company’s share price has surged by 28% since it announced preliminary results for fiscal 2024 and initiated its revenue guidance for 2025 on January 10. Astronics Corporation (NASDAQ:ATRO) reported a preliminary unaudited revenue of $796 million, up 15.5% from last year. Bookings for the full year totaled approximately $811 million.
For 2025, Astronics Corporation (NASDAQ:ATRO) anticipates revenue to be in the range of $820 million to $860 million, representing an increase of 6% compared to 2024 at the mid-point of the range.
Astronics Corporation (NASDAQ:ATRO) is among the defense stocks that are gaining this week, with its share price up by more than 8% over the past week. On February 24, the company announced to release fourth-quarter and full-year results for fiscal 2024 on Tuesday, March 4, 2025.
2. Sturm, Ruger & Company, Inc. (NYSE:RGR)
Weekly Gains: 11.82%
Sturm, Ruger & Company, Inc. (NYSE:RGR) is an American firearms company with a diverse portfolio of products, mainly serving three product lines – pistols, rifles, and revolvers.
The stock went up significantly over the last week after the company released financial results for the fourth quarter and full year 2024 on February 19. While profitability declined in 2024 compared to 2023 due to unfavorable deleveraging of fixed costs, Sturm, Ruger & Company, Inc. (NYSE:RGR)’s performance during the fourth quarter was encouraging.
Q4 2024 results were drastically better sequentially, with production increasing 10%, sales up 19%, and profit more than doubling compared to Q3. The results were also better year-over-year. Sturm, Ruger & Company, Inc. (NYSE:RGR) reported quarterly net sales of $145.8 million and diluted EPS of $0.62, improving from net sales of $130.6 million and diluted EPS of $0.58 in Q4 2023.
Investors have also been encouraged by Sturm, Ruger & Company, Inc. (NYSE:RGR)’s balance sheet position, as it enters fiscal 2025 debt-free, with reduced inventories, and a robust pipeline of new products.
1. KWESST Micro Systems Inc. (NASDAQ:KWE)
Weekly Gains: 13.70%
KWESST Micro Systems Inc. (NASDAQ:KWE) is engaged in the development of tactical systems and ammunition for military and security forces. It tops the charts for defense stocks that are gaining this week.
The company’s share price was up 13.70% over the past week after positive recent developments. On February 18, KWESST Micro Systems Inc. (NASDAQ:KWE) reported strong results for the first quarter of fiscal 2025, with a revenue growth of 588% and a gross margin of 45%. The robust performance was driven by DSEF and Land C4ISR government contracts, growth in ARWEN business, and a pilot of the company’s Lightning SaaS product.
On February 21, KWESST Micro Systems Inc. (NASDAQ:KWE) announced the closing of the first tranche of its CAD$3.5 million private placement. The company issued 903,700 common shares and 2,884,179 pre-funded warrants as part of the first tranche.
Overall, KWESST Micro Systems Inc. (NASDAQ:KWE) ranks first 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 timeframe. If you are looking for an AI stock that is more promising than KWE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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