This article looks at the defense stocks that are gaining this week.
America’s defense sector has been shaky since Trump’s return to the White House, amid mixed statements on military expenditure in the early days of his second stint. Shares fell sharply last month after he hinted at cutting defense spending in the future. They wobbled again following his recent contentious spat with Zelensky at the Oval Office.
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According to a report in the Financial Times on February 24, shares of the six largest American defense companies have fallen 4% since the start of Trump’s second term. Whereas, Europe’s top defense groups have returned gains of around 40% during the same period. Several Korean companies have also benefited from Europe’s defense splurge.
European defense stocks have rallied this year as governments faced pressures to increase military spending. The momentum has further picked up after the conservative victory in Germany, and the European Summit in London, where leaders from the EU and NATO met to express their support for Ukraine.
While US defense stocks have missed the global rally, Citi analyst, Jason Gursky, is urging investors that this is the right time to buy them. Here is what he wrote in a note to clients on Wednesday:
“We recognize the world order is evolving under the current President, perhaps to a multi-polar one in which three countries control spheres of influence over the Americas, Europe and Asia. However, we don’t view that world to be any less dangerous or one that decreases the need to acquire the tools of deterrence.”
Trump’s recent statement on resurrecting American military and commercial shipbuilding has been well-received. Shares of a major naval defense contractor have surged over the past week, following the announcement. The US president has vowed to fix the industry, which he sees as vital to national security, given the strategic competition with China.
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.
Pixabay/Public Domain
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week (March 3-7). 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 Friday, March 7, 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. Sidus Space, Inc. (NASDAQ:SIDU)
Weekly Gains: 4.76%
Sidus Space, Inc. (NASDAQ:SIDU) is engaged in the design, manufacture, launch, and data collection of commercial satellites. The stock has struggled this year, with a year-to-date decline of nearly 60%, mainly driven by weak financial performance.
However, shares have risen by 4.76% over the past week, after Sidus Space, Inc. (NASDAQ:SIDU) announced the one-year orbital anniversary of LizzieSat (LS-1), a hybrid 3D printed satellite that has demonstrated exceptional capabilities to optimize performance, enhance mission adaptability, and reduce production timelines.
Sidus Space, Inc. (NASDAQ:SIDU) also stated that it was preparing for the launch of LizzieSat (LS-3) in March, which will mark the third satellite launch within a year.
9. Lockheed Martin Corporation (NYSE:LMT)
Weekly Gains: 5.17%
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.
The stock has gained 5.17% over the past week, following a March 3 report in Reuters about Lockheed Martin Corporation (NYSE:LMT) planning to unveil a new, low-cost cruise missile priced at $150,000 with a range of 800 kilometers, as the company works to counter Chinese ambitions in the Pacific by offering affordable weaponry.
Lockheed Martin Corporation (NYSE:LMT) was up by 2.63% on Friday after Matthew Akers from Wells Fargo raised the stock’s price target to $476 per share, up from $468 previously. However, the analyst maintained his Hold rating for LMT. According to analysts, the revision stemmed from a growing interest in American defense stocks from abroad.
8. Northrop Grumman Corporation (NYSE:NOC)
Weekly Gains: 5.37%
Northrop Grumman Corporation (NYSE:NOC) was up 5.37% over the past week, following reports of progress being made on ongoing programs and continued momentum around recent high-value defense contracts.
On March 5, the company announced that it was delivering strong performance in the test and production of the B-21 Raider. Northrop Grumman Corporation (NYSE:NOC) said it was awarded a LRIP Lot 2 award late in Q4 last year, which signalled the Air Force’s confidence in the program’s progress.
Northrop Grumman Corporation (NYSE:NOC) also recently signed a Memorandum of Understanding with Hanwha Systems to produce ALMDS hardware components for South Korea’s Mine Countermeasures Helicopter (KMCH) program.
On March 7, Wells Fargo raised its price target for NOC from $545 to $547 per share, while maintaining its Buy rating.
7. L3Harris Technologies, Inc. (NYSE:LHX)
Weekly Gains: 6.79%
L3Harris Technologies, Inc. (NYSE:LHX) is known for its wireless and night vision equipment, command and control systems, avionics, and terrestrial and spaceborne antennas. It is among the defense stocks that are gaining this week.
On February 20, the company announced it had begun construction of four solid rocket motor production facilities at its Camden site. The expansion is part of a $215.6 million agreement with the DoD under the Defense Production Act Title III program, which aims to increase domestic manufacturing capacity.
L3Harris Technologies, Inc. (NYSE:LHX)’s board of directors also recently approved a 24th successive annual dividend raise, reflecting the company’s commitment to strong shareholder returns. The company’s share price dipped after the Trump-Zelensky spat on February 28, but recovered in the following week with gains of 6.79%.
6. Embraer S.A. (NYSE:ERJ)
Weekly Gains: 7.07%
Embraer S.A. (NYSE:ERJ) is a Brazil-based jet manufacturer that produces aircraft for commercial and executive aviation and defense purposes.
The stock has surged 40% year-to-date. It continues to generate solid returns, with another gain of 7.07% over the past week. Investor sentiment has been bolstered by the recent announcement of financial results for the fourth quarter and full year 2024 on February 27.
Embraer S.A. (NYSE:ERJ) generated a revenue of $2.3 billion in Q4, up 17% from last year. Full year revenue stood at $6.4 billion, the highest ever in the company’s history. It ended Q4 with a record order backlog of $26.3 billion, which is also the largest ever in its history and 40% higher year-over-year.
Embraer S.A. (NYSE:ERJ) continues to receive high-value contracts. Last month, it signed a $7 billion agreement with Flexjet to supply 182 aircraft and 30 options, and another contract with Japan’s ANA for 15 E190-E2 planes to support domestic operations.
5. General Dynamics Corporation (NYSE:GD)
Weekly Gains: 7.51%
General Dynamics Corporation (NYSE:GD) is a leading global aerospace and defense company, operating through its Aerospace, Marine Systems, Combat Systems, and Technologies segments. It is among the defense stocks that are gaining this week.
On March 5, General Dynamics Corporation (NYSE:GD) declared a quarterly dividend of $1.50 per share. This is a 5.6% hike over last year’s dividend, and marks the 28th consecutive annual dividend raise authorized by the company, reflecting its commitment to shareholder returns.
General Dynamics Corporation (NYSE:GD) has had impressive returns over the past month, following the Q4 2024 earnings call in which it reported revenue and earnings growth across segments. The company’s shares have risen by 7.51% over the past week.
4. Nauticus Robotics, Inc. (NASDAQ:KITT)
Weekly Gains: 10.07%
Nauticus Robotics, Inc. (NASDAQ:KITT) develops autonomous robots for the ocean industry. The stock is down 32% year-to-date, as it faces pressures to comply with NASDAQ compliance requirements.
However, shares have surged by over 10% in the past week, after Nauticus Robotics, Inc. (NASDAQ:KITT) announced that it had signed a definitive agreement to acquire SeaTrepid International, LLC – a company that provides subsea robotic services. The strategic acquisition is likely to result in significant revenue growth for KITT in fiscal 2025.
Nauticus Robotics, Inc. (NASDAQ:KITT) is also an important player in the defense sector. In January this year, the company forged a strategic alliance with Leidos to advance subsea autonomy solutions.
3. Huntington Ingalls Industries, Inc. (NYSE:HII)
Weekly Gains: 11.61%
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 have surged 11.61% over the past week after Trump announced plans to resurrect the shipbuilding sector and establish an Office of Shipbuilding in the White House. Here is what the US President stated to the Congress on Tuesday, March 4:
“We used to make so many ships. We’re going to make them very fast, very soon.”
Investor sentiment in Huntington Ingalls Industries, Inc. (NYSE:HII) has also been strengthened by a recent $70 million, five-year task order award to protect the US Air Force’s systems and software, and implement government-mandated information security requirements.
2. Elbit Systems Ltd. (NASDAQ:ESLT)
Weekly Gains: 14.80%
Elbit Systems Ltd. (NASDAQ:ESLT) is an Israel-based defense technology company. It is among the defense stocks that are gaining this week.
The company’s share price is up 38% year-to-date, with gains of nearly 15% over the past week. As of the close of business on March 7, the stock was valued at a record-high of $357.03 per share. Elbit Systems Ltd. (NASDAQ:ESLT) has been awarded several high-value contracts in recent months, which has raised investor interest in its upcoming Q4 2024 earnings call scheduled for March 18.
In November 2024, Elbit Systems Ltd. (NASDAQ:ESLT) was awarded contracts worth $335 million to supply defense systems, including rocket launchers and unmanned aircraft, to a European country. The company also received a $60 million contract in January this year to provide Counter Unmanned Aerial Systems to a NATO member state. According to reports, ESLT was recently picked by the Moroccan military as well for the purchase of self-propelled artillery.
1. Astronics Corporation (NASDAQ:ATRO)
Weekly Gains: 22.19%
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 stock has soared in the past week after Astronics Corporation (NASDAQ:ATRO) announced results for the fourth quarter of fiscal 2024. The company reported sales of $208.5 million for the quarter, growing 6.8% from last year. Adjusted operating income stood at 11.4%, expanding 550 basis points year-over-year.
Adjusted EBITDA was $31.5 million or 15.1% of sales. The positive margins resulted in cash from operations of $26.4 million. Chairman, President and CEO, Peter Gundermann, stated this was the ‘first seriously positive cash quarter since before the pandemic’.
Following the results, Truist Securities raised Astronics Corporation (NASDAQ:ATRO)’s price target from $17 per share to $23, while maintaining the hold rating.
Overall, Astronics Corporation (NASDAQ:ATRO) 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 time frame. If you are looking for an AI stock that is more promising than ATRO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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