This article looks at the defense stocks that are gaining this week.
The Ukraine crisis has taken an unexpected turn following a heated exchange at the Oval Office between Ukrainian President Volodymyr Zelensky and US Vice President J.D. Vance on Friday, which ended with President Trump berating the visiting leader. Defense stocks wobbled after the contentious meeting as investors anticipated the US-Ukraine minerals deal to be signed.
READ ALSO: 10 Best Large Cap Defense Stocks to Buy Now and Why These 15 Defense Stocks Are Skyrocketing So Far In 2025.
The defense sector in the US has so far struggled under Trump’s second term as president, amid mixed statements on military expenditure throughout his campaign and the early days of the new stint. Shares fell sharply on February 13 after the US president suggested the country could rapidly cut military spending in the future.
The creation of DOGE is also reshaping investors’ views of the sector. According to a Financial Times report on February 24, shares of the six largest American defense companies have fallen 4% since Trump’s return to the White House. In contrast, Europe’s top defense stocks have risen by nearly 40% over the same period.
European defense stocks have rallied over the past two weeks as governments faced pressures to increase military expenditure. Several stocks recorded double-digit growth on Monday, March 3, a day after the European Summit in London where leaders from the EU and NATO met to express their support for Ukraine, following the recent Zelenskyy-Trump spat.
The momentum has further picked up after a conservative victory in Germany, signaling the shift to the right in Berlin. A Reuters report on Sunday stated that parties in talks to form the country’s next government are already considering setting up a defense fund.
Peter Schaffrik, Global Macro Strategist, at RBC Capital Markets stated the following on the ongoing situation:
“It is an inflection point and Europe realises it needs to do the heavy lifting. The German elections have opened the door for more spending. The whole Zelenskiy-Trump meltdown has fast forwarded everything.”
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.
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, March 3, 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. TransDigm Group Incorporated (NYSE:TDG)
Weekly Gains: 4.40%
TransDigm Group Incorporated (NYSE:TDG) is an aerospace company that manufactures engineered aircraft components for commercial and military aircraft. It is among the defense stocks that are gaining this week.
On February 24, UBS upgraded the stock’s rating to Buy from Neutral, citing stabilised aftermarket growth, increased capital deployment, and margin expansion. Since then, the company’s shares have risen by 4.40%.
TransDigm Group Incorporated (NYSE:TDG) made notable strategic acquisitions last year, which included Raptor Scientific, and Communications & Power Industries’ Electron Device business. These are expected to add significant future revenue for the company.
TransDigm Group Incorporated (NYSE:TDG)’s financial position remains robust. During Q1 2025, it reported a net income of $493 million, up 29% year-over-year. This was driven by a 12% increase in net sales from last year. Adjusted EPS stood at $7.83, growing 9% from the prior year’s quarter.
9. Axon Enterprise, Inc. (NASDAQ:AXON)
Weekly Gains: 5.21%
Axon Enterprise, Inc. (NASDAQ:AXON) manufactures weapons and technology for law enforcement agencies, military, and civilian use. The company integrates cloud software solutions and hardware devices to help enable modern policing, defense, and security.
The stock surged last week after the company reported higher-than-expected earnings for the fourth quarter of fiscal 2024 on February 25. Axon Enterprise, Inc. (NASDAQ:AXON)’s quarterly revenue was $575 million, up 34% from the prior year’s period. This marked the company’s 12th successive quarter of 25%+ revenue growth.
For the full year, Axon Enterprise, Inc. (NASDAQ:AXON)’s revenue grew 33% to $2.1 billion. This is nearly double the figure reported two years ago. Following the results, several analysts reiterated their Buy and Strong Buy ratings for the stock, while raising their price targets, which reflected the bullish sentiment around the company.
