This article looks at the defense stocks that are gaining this week.
According to The International Institute for Strategic Studies (IISS), global defense spending soared to a record high of $2.46 trillion in 2024, amid major budget increases in Asia, Europe, the Middle East, and North Africa due to deteriorating security environments and threat perceptions. Easing inflation in different parts of the world also allowed countries to invest in and bolster national defense.
READ ALSO: 10 Best Performing Defense Stocks So Far in 2025 and 13 Best Defense Stocks to Buy According to Billionaires.
The world has been rocked with deadly conflicts over the last few years, with Ukraine and the Middle East being the most affected regions. While the human impact of these wars has been tragic, the defense industry has profited by luring investors into piling up their stocks, with several of the world’s top contractors seeing their shares book all-time highs in 2024.
Defense stocks across the world are continuing to witness an unprecedented bull run as European capitals 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.
In contrast, American defense stocks have been subdued this year and have failed to capitalize on the global rally due to concerns about budget cuts under the new administration. Last month, President Trump 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 the world may be heading toward a multi-polar order, he argued that it was no less dangerous to decrease the need for tools of deterrence.
Two recent developments are reinvigorating investor interest in US defense stocks. Trump has unveiled a new next-generation fighter jet, the F-47, to replace the F-22 Raptor. He has also announced to resurrect America’s military and commercial shipbuilding industry, which he sees as vital to national security, given the strategic competition with China.
With that said, 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 towering military warship off the shore, its hull representing the companies commitment to the defense sector.
Our 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 gains in share price during this period. All data is as of the close of business on Friday, March 28, 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. Hyperscale Data, Inc. (NYSEAMERICAN:GPUS)
Weekly Gains: 0.83%
Hyperscale Data, Inc. (NYSEAMERICAN:GPUS) is an advanced data center solutions provider. Its offerings include data center management, colocation, cloud hosting, and managed services solutions. The company also provides customized solutions for military markets.
On March 28, the company announced the successful installation of its first NVIDIA GPUs for a customer. This is a significant milestone after Hyperscale Data, Inc. (NYSEAMERICAN:GPUS)’s strategic transformation of its Michigan data center. The company also recently declared a monthly cash dividend of $0.2708333 per share of its outstanding 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock.
Hyperscale Data, Inc. (NYSEAMERICAN:GPUS) is among the defense stocks gaining this week, with returns of 0.83% during the week of March 24.
9. Hexcel Corporation (NYSE:HXL)
Weekly Gains: 0.99%
Hexcel Corporation (NYSE:HXL) is a leader in advanced lightweight composites technology. The company develops and markets carbon fiber, honeycomb structures, structural reinforcements, resins, and composite materials and parts for use in commercial aerospace, defense, space, and industrial applications.
The stock was down 3% on Friday to close at $56.31 after Truist Securities lowered Hexcel Corporation (NYSE:HXL)’s price target to $80 from $85, citing recent concerns regarding the production of the Airbus A350 as a potential challenge for the company in 2025.
Despite Friday’s dip, Hexcel Corporation (NYSE:HXL) had returns of 0.99% for the week, amid recent reports of a dramatic increase in insiders growing their holdings in the company over the past 12 months, reflecting their confidence in HXL’s trajectory.
8. SIFCO Industries, Inc. (NYSEAMERICAN:SIF)
Weekly Gains: 1.43%
SIFCO Industries, Inc. (NYSEAMERICAN:SIF) produces forgings and machined components for the aerospace, energy, defense, and commercial space markets.
On March 24, the company announced the appointment of Deloitte as its auditor, which marked the dismissal of RSM US LLP as its independent registered public accounting firm. 2025 has been a challenging year for SIFCO Industries, Inc. (NYSEAMERICAN:SIF), with a year-to-date decline of 20%. The announcement has come amid ongoing operational changes in the company and is expected to bring a fresh perspective to its financial reporting and auditing processes.
SIFCO Industries, Inc. (NYSEAMERICAN:SIF)’s share price has gained 1.43% since March 24, earning it a place in our list of the defense stocks that are gaining this week.
7. Loar Holdings Inc. (NYSE:LOAR)
Weekly Gains: 1.54%
Loar Holdings Inc. (NYSE:LOAR) designs and manufactures niche aerospace and defense components for aircraft and aerospace and defense systems. With returns of 1.54% since March 24, it is among the defense stocks gaining this week.
The company is scheduled to announce fourth-quarter and full year 2024 results on March 31. Based on one analyst’s forecast, Loar Holdings Inc. (NYSE:LOAR) is expected to report EPS of $0.04 for the quarter.
As per a recent report, Charles Schwab Investment Management Inc. lifted its stake in Loar Holdings Inc. (NYSE:LOAR) by 54% during the fourth quarter of 2024. According to Insider Monkey’s database for Q4, 32 hedge funds held a stake in the company, up from 18 at the end of the third quarter.
6. HEICO Corporation (NYSE:HEI)
Weekly Gains: 1.74%
HEICO Corporation (NYSE:HEI) is an aerospace and technology company that manufactures jet engines and aircraft parts. It also supports the government through reverse engineering, manufacturing aircraft engines and parts, and providing repair and maintenance services.
The stock has had year-to-date returns of nearly 12% as of the close of business on March 28, driven by industry tailwinds in commercial aviation. The company’s financial position also remains strong. During its recent Q1 FY25 earnings call, HEICO Corporation (NYSE:HEI) reported a record quarterly net income of $168 million, up 46% year-over-year. Net sales were also up 15% from last year.
With returns of 1.74% since March 24, HEICO Corporation (NYSE:HEI) is among the defense stocks gaining this week.
5. Huntington Ingalls Industries, Inc. (NYSE:HII)
Weekly Gains: 1.91%
Huntington Ingalls Industries, Inc. (NYSE:HII) is an American defense company with expertise in shipbuilding. The stock has surged 17% in March after Trump announced plans to resurrect the shipbuilding sector.
The stock has continued its rally this week, with returns of 1.91%. On March 25, Huntington Ingalls Industries, Inc. (NYSE:HII)’s Mission Technologies division was awarded a contract to build an open architecture High-Energy Laser (HEL) weapon system for the Army’s Rapid Capabilities and Critical Technologies Office (RCCTO). The company will develop and test a prototype of unmanned aircraft systems used in multi-domain operations.
During the week, Huntington Ingalls Industries, Inc. (NYSE:HII) also launched the USS Jeremiah Denton (DDG 129), the third Flight III Arleigh Burke-class destroyer for the US Navy.
4. General Dynamics Corporation (NYSE:GD)
Weekly Gains: 2.15%
General Dynamics Corporation (NYSE:GD) is a leading global aerospace and defense company, operating through its Aerospace, Marine Systems, Combat Systems, and Technologies segments.
On March 25, the company announced that it was awarded a $1 billion contract modification, allowing its Electric Boat business unit to purchase long-lead-time materials for the Virginia-class submarines. Here is what Mark Rayha, President of General Dynamics Corporation (NYSE:GD) Electric Boat, stated on the deal:
“This contract modification drives continuation of the crucial demand signal that the submarine industrial base needs to invest in the capacity and materials required to increase production volume. Consistent funding for the supply base is essential to achieve the high-rate production the Navy requires of the entire submarine enterprise.”
General Dynamics Corporation (NYSE:GD)’s shares are up 2.15% since Monday, primarily driven by the recent contract award. It is among the defense stocks that are gaining this week.
3. TransDigm Group Incorporated (NYSE:TDG)
Weekly Gains: 2.31%
TransDigm Group Incorporated (NYSE:TDG) is an aerospace company that manufactures engineered aircraft components for commercial and military aircraft.
With returns of 2.31% since March 24, it is among the defense stocks gaining this week. On March 25, Wells Fargo raised TransDigm Group Incorporated (NYSE:TDG)’s price target from $1,500 to $1,580 per share, while maintaining the Overweight rating for the stock.
The company is also in the news for being among the final bidders for Boeing’s navigation unit. According to a report on Reuters this Friday, TransDigm Group Incorporated (NYSE:TDG) is competing with several private equity firms to buy the Jeppesen unit for more than $8 billion.
2. Northrop Grumman Corporation (NYSE:NOC)
Weekly Gains: 4.38%
Northrop Grumman Corporation (NYSE:NOC) is one of the largest defense contractors in the world. It is manufacturing the B-21 Raider for the United States Air Force (USAF).
On March 18, the company clinched a follow-on contract from the USAF to connect airborne platforms with faster and secure communications. Under the contract, Northrop Grumman Corporation (NYSE:NOC) will deliver the NG InSight processor, which will keep warfighters connected and adaptable in complex mission environments.
This week, RBC Capital upgraded the stock’s rating from Sector Perform to Outperform and also raised its price target from $500 to $575 per share. With returns of 4.38% since Monday, Northrop Grumman Corporation (NYSE:NOC) is among the defense stocks gaining this week.
1. TAT Technologies Ltd. (NASDAQ:TATT)
Weekly Gains: 12.80%
TAT Technologies Ltd. (NASDAQ:TATT) provides services and products for the commercial and military aerospace and ground defense sectors.
The company declared strong results for fiscal 2024 on March 26. TAT Technologies Ltd. (NASDAQ:TATT)’s annual revenue surged 34% from last year to $152.1 million. Gross profit stood at $33 million, up 47% year-over-year. Net income increased by 139% to $11.2 million.
TAT Technologies Ltd. (NASDAQ:TATT)’s shares soared 12.80% this week, with a major spike following the earnings call. It tops the chart for defense stocks that are gaining this week.
Overall, TAT Technologies Ltd. (NASDAQ:TATT) 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 TATT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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