This article looks at the 10 Best Aerospace and Defense Stocks to Buy According to Billionaires.
The world has been marred with geopolitical conflicts since the turn of the decade. The ongoing tensions between Iran and the US-Israel have further aggravated the situation, with many experts describing the war as the worst humanitarian and energy crisis since the COVID-19 pandemic.
However, the turmoil has been a boon for defense stocks. The Gabelli Commercial Aerospace & Defense ETF (GCAD) has gained 7.51% year-to-date, as of the close on March 20, comfortably outpacing the broad market index, which is down 5.13% during the period. Over the past year, returns have compared 43% against 13%.
Earlier this month, Tony Bancroft, Portfolio Manager at Gabelli Funds, talked to CNBC and acknowledged that the Iran war is driving up shares of aerospace and defense companies, and said he expects industry production and spending to increase in the near future, given the volatile situation.
Media reports on Wednesday said that the Pentagon was preparing to seek an additional $200 billion from Congress to fund the war in Iran. During a press briefing, Pete Hegseth, the Secretary of Defense, said that the government might even require more since ‘it takes money to kill bad guys’.
The reported figures have also led to speculation on where the money would be spent. Capital Alpha Partners analyst Byron Callan was quoted as saying the following by Barron’s:
“Middle East War-related costs had been reported to total $50 billion. There are open questions about where the other $150 billion came from and what this all may mean for the fiscal year 2027 request.”
With that said, let’s now shift focus and see which are the best aerospace and defense stocks that billionaires are investing in.
Jordan Tan / Shutterstock.com
Methodology
For this article, we scanned Insider Monkey’s Q4 2025 proprietary database of billionaires’ stock holdings and identified aerospace and defense stocks from the list. From there, we picked the top 10 stocks with the highest number of billionaires having a stake in them. When two or more stocks were tied in billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker. Additionally, we have included data on hedge fund holdings in these companies, sourced from Insider Monkey’s database as of Q4 2025, to provide further insight into investor interest.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10 Best Aerospace and Defense Stocks to Buy According to Billionaires:
10. Rocket Lab Corporation (NASDAQ:RKLB)
Number of Billionaire Investors: 16
Rocket Lab Corporation (NASDAQ:RKLB) is among the 10 Best Aerospace and Defense Stocks to Buy According to Billionaires. On March 19, Clear Street initiated coverage of the stock with a Buy rating and announced a share price target of $88.
According to a report on TipRanks, the firm’s analyst Greg Pandy highlighted Neutron, the company’s leadership in small-lift orbital launch, and its Space Systems as major drivers of revenue growth for the company and in reinforcing its status as a ‘leading integrated space operator’.
This follows Deutsche Bank’s adjustment earlier in the month on March 2, when analyst Edison Yu raised the price target on Rocket Lab Corporation (NASDAQ:RKLB) to $73 from $55 and maintained a Buy rating. As of the close of business on March 20, the stock is a Moderate Buy with an average upside of 33%.
In other news, on Wednesday, the company announced it had secured a $190 million contract for 20 hypersonic test flights with its HASTE launch vehicle under the U.S. Department of War’s MACH-TB 2.0 program. This is the largest launch contract in the space firm’s history, taking its backlog for launch and space systems to over $2 billion.
Rocket Lab Corporation (NASDAQ:RKLB) is a global leader in launch services and space systems with an established record of delivery success. The company designs and manufactures spacecraft and related components, rockets, and on-orbit management solutions required for the space economy.
9. Archer Aviation Inc. (NYSE:ACHR)
Number of Billionaire Investors: 18
Archer Aviation Inc. (NYSE:ACHR) is among the 10 Best Aerospace and Defense Stocks to Buy According to Billionaires. As of the close on March 20, the stock is a Strong Buy based on the recommendations of six analysts, with an average upside potential of 129%.
According to TipRanks, Canaccord Genuity analyst Austin Moeller on March 12 reiterated the firm’s Buy rating with a share price target of $13. This followed Needham’s revision on March 3, following the company’s Q4 2025 results, when it lowered the price target to $9 from $10, and maintained a Buy rating.
In a research note to investors, Needham said there were several bullish scenarios for Archer Aviation Inc. (NYSE:ACHR) in 2026, with the company now flying the new version of the Midnight aircraft and its participation in eVTOL Integration Pilot Program (eIPP) being the key catalysts to drive growth.
In related news, on March 9, Archer Aviation Inc. (NYSE:ACHR) announced that the U.S. government had taken a major step towards introducing electric air taxis in the country with the selection of partners in Florida, New York, and Texas to participate in the eIPP. The company said it will work on these locations to prepare for Midnight aircraft flights under the program.
Archer Aviation Inc. (NYSE:ACHR) is an aerospace company engaged in the development of innovative technologies to power the future of aviation in both the commercial and defense space. It is actively involved in the development of electric vertical takeoff and landing aircraft for air taxi operations, and is aiming for passenger flights in the UAE and the US later this year.
8. L3Harris Technologies, Inc. (NYSE:LHX)
Number of Billionaire Investors: 18
L3Harris Technologies, Inc. (NYSE:LHX) is among the 10 Best Aerospace and Defense Stocks to Buy According to Billionaires. As of the close of business on March 20, the stock is a Strong Buy with an average share price upside potential of 12.40%.
Recent updates include a February 27 update from JP Morgan analyst Seth Seifman, who reiterated an Overweight rating on the stock with a price target of $410, according to a report on TipRanks.
This followed Baird’s adjustment a day earlier when the firm lifted its price target on L3Harris Technologies, Inc. (NYSE:LHX) to $420 from $385, while maintaining an Outperform rating. The firm said it had revised its stock model after the defense contractor shared 2028 targets during a recent investor day that exceeded Wall Street’s expectations.
The stock has already returned nearly 16% this year and is gaining traction among investors as the Middle East conflict intensifies, with experts widely noting the company’s missiles and missile protection systems playing a key role in the ongoing Iran-US-Israeli war.
L3Harris Technologies, Inc. (NYSE:LHX) provides advanced national security solutions in the air, land, space, sea, and cyber domains. It operates through four segments: Communication Systems, Integrated Mission Systems, Space & Airborne Systems, and Aerojet Rocketdyne.
7. Lockheed Martin Corporation (NYSE:LMT)
Number of Billionaire Investors: 19
Lockheed Martin Corporation (NYSE:LMT) is among the 10 Best Aerospace and Defense Stocks to Buy According to Billionaires. On March 18, Susquehanna analyst Charles Minervino lifted the price target on the stock to $740 from $725, while maintaining a Positive rating.
The firm said it had adjusted the defense contractor’s model, factoring in its industry positioning as global geopolitical conflicts intensify. Susquehanna remains optimistic about the company’s growth potential in the medium-term, given its strong backlog of orders and programs to enhance production capacity.
As of the close of business on March 20, Wall Street analysts have a Hold rating on Lockheed Martin Corporation (NYSE:LMT), with an average share price upside potential of 7%.
In other news, the company recently marked a significant milestone in advancing the U.S. military’s capabilities to tackle moving maritime targets with the Precision Strike Missile (PrSM) Increment 2, achieving key test objectives on its first test flight. The missile was launched from a HIMARS and covered a distance of 350 kilometers.
Lockheed Martin Corporation (NYSE:LMT) is one of the world’s largest defense contractors. It specializes in the research, design, and development of advanced technology systems, products, and services. The company has produced several iconic military aircraft for the past several decades, including the world’s most dominant fifth-generation fighter jet, the F-35.
6. Northrop Grumman Corporation (NYSE:NOC)
Number of Billionaire Investors: 20
Northrop Grumman Corporation (NYSE:NOC) is among the 10 Best Aerospace and Defense Stocks to Buy According to Billionaires. According to TipRanks, BofA analyst Ronald Epstein maintained the firm’s Buy rating on the stock on March 17.
The update reiterates the bank’s earlier adjustment on January 28, following the company’s fourth-quarter earnings call. Then, BofA raised its price target to $750 from $685, with a Buy rating, while noting that NOC was embracing opportunities to become more commercial and agile without losing its status as a leading defense contractor.
As of the close of business on March 20, Northrop Grumman Corporation (NYSE:NOC) is a Moderate Buy, with an average share price upside potential of 6%.
On Thursday, the company announced that Talon IQ, its autonomous testbed ecosystem, had successfully performed its first flight with Shield AI’s Hivemind software, marking a significant milestone in mission autonomy, which is seen as an acceleration towards combat capabilities driven by artificial intelligence.
Northrop Grumman Corporation (NYSE:NOC) is one of the world’s largest defense contractors. It is engaged in the design, development, integration, and maintenance of advanced systems across aeronautics, space, defense electronics, and mission solutions.
While we acknowledge the potential of NOC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NOC and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 Best Aerospace and Defense Stocks to Buy According to Billionaires.
Disclosure: None. Follow Insider Monkey on Google News.
