This article looks at the 10 Best American Defense Stocks to Buy According to Wall Street Analysts.
The NYSE Arca Defense Index has returned 7.35% year-to-date (YTD) as of February 5, outpacing the broad market index, which has gained less than 1% over the period.
Ray Wing, the founder and chairman of Constellation Research, told Fox Business last week that he expects the rally in defense stocks to continue, given ongoing geopolitical tensions and anticipated increases in military spending by NATO member states.
The Silicon Valley-based analyst noted that while traditional contractors still held most government contracts, several private defense firms were attracting attention by delivering innovative technology at much lower costs.
President Trump’s call last month to raise the U.S. military budget to $1.5 trillion for 2027 has also contributed to the gains. The amount is substantially higher compared to Congress’s approval of $901 billion for 2026. Trump believes the increased spending will help in keeping the country well protected from threats, considering the current security challenges.
In a Reuters interview last month, Neil Wilson, UK investor strategist at Saxo Bank, highlighted the impact of geopolitics on 2026 so far and cited defense stocks and rare earth materials as major buying opportunities this year.
With that said, let’s now head over and explore some of the best American defense stocks to buy according to Wall Street analysts.
Philip Pilosian / Shutterstock.com
Our Methodology
We used screeners to identify U.S. defense stocks with a market capitalization of $2 billion or more and favorable recommendations from Wall Street analysts. From there, we selected the 10 stocks with the highest average share-price upside and ranked them in ascending order. All data is as of the close of business on February 5, 2026. Additionally, we also included data on hedge fund holdings in these companies as of Q3 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. RTX Corporation (NYSE:RTX)
Price Target Upside: 11.20%
Number of Hedge Fund Holders: 76
RTX Corporation (NYSE:RTX) is among the 10 best American defense stocks to buy according to Wall Street analysts.
On February 5, Citigroup lifted its price target on the stock to $238 from $227, while reiterating a Buy rating, representing an upside of over 21% from Thursday’s close.
The adjustment comes a day after the company announced it had reached a seven-year agreement with the Department of War to increase the production and delivery of Tomahawks, AMRAAM missiles, along with other missiles and interceptors.
The deal comes amid soaring demand for precision munitions worldwide due to ongoing geopolitical conflicts, and Washington’s subsequent quest to replenish depleted stockpiles.
According to RTX Corporation’s (NYSE:RTX) press release, production of Tomahawk cruise missiles will increase to more than 1,000 units per annum, up from about 60 currently. The production capacity of AMRAAM air-to-air missiles is also planned to expand to at least 1,900 units.
In other news, the aerospace and defense giant reported strong results for the fourth quarter of fiscal 2025, led by increased sales of engines and rising demand for aircraft maintenance and repair services. Total sales grew 12% year-over-year to $24.2 billion, while adjusted EPS stood at $1.55, beating estimates by 8 cents and up 1% from the prior year.
The company also shared its outlook for 2026, with sales anticipated between $92 billion and $93 billion, with the midpoint above analysts’ forecasts. Adjusted EPS for the year is projected to be in the range of $6.60 to $6.80.
RTX Corporation (NYSE:RTX) is a giant in the global aerospace and defense industry, providing systems and services to commercial, military, and government clients. It operates through three main businesses: Collins Aerospace, Pratt & Whitney, and Raytheon.
9. L3Harris Technologies, Inc. (NYSE:LHX)
Price Target Upside: 11.24%
Number of Hedge Fund Holders: 59
L3Harris Technologies, Inc. (NYSE:LHX) is among the 10 best American defense stocks to buy according to Wall Street analysts.
On February 5, JPMorgan raised its price target on the stock to $395 from $340 while reiterating an Overweight rating. The firm noted that the company was in the midst of a transformation. On the same day, Citigroup also raised its price target to $418 from $389 and kept a Buy rating.
These updates come after Morgan Stanley’s adjustment on LHX earlier in the week on February 2, following the company’s earnings beat in Q4. The firm noted an attractive risk-to-reward scenario for the stock and raised its price target to $390 from $367, maintaining an Overweight rating.
As of the close of business on February 5, L3Harris Technologies, Inc. (NYSE:LHX) is a Strong Buy with an average share price upside potential of 11.24%.
While the defense contractor missed revenue estimates for the fourth quarter due to a prolonged government shutdown, its non-GAAP diluted EPS stood at $2.86, up 10% from a year ago and beating Wall Street’s expectations by 10 cents.
L3Harris Technologies, Inc. (NYSE:LHX) is heading into 2026 with a record backlog of over $38 billion and a book-to-bill of 1.3. The company anticipates revenue between 23 billion and $23.5 billion, which is largely in line with analysts’ expectations.
However, the outlook for 2026 includes figures for its space propulsion and power systems business, in which it divested a 60% stake earlier this year. The deal could squeeze the company’s revenue after it closes in the second half of 2026.
L3Harris Technologies, Inc. (NYSE:LHX) provides end-to-end technology solutions that connect the air, land, space, sea, and cyber domains for national security.
