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.
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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.
8. The Boeing Company (NYSE:BA)
Price Target Upside: 13.59%
Number of Hedge Fund Holders: 106
The Boeing Company (NYSE:BA) is among the 10 best American defense stocks to buy according to Wall Street analysts.
On February 2, Jefferies raised its price target on the stock to $295 from $290, while reiterating a Buy rating. The firm said it had revised the company’s model following the announcement of fourth-quarter fiscal 2025 results on January 27.
The planemaker’s quarterly revenue grew 57% year over year to $23.95 billion, exceeding estimates of $22.6 billion. Diluted earnings per share stood at $10.23, compared to a loss of $5.46 per share in the prior year.
The return to profitability was primarily driven by the completion of Jeppesen’s $10.6 billion sale during the quarter, coupled with strong aircraft production and deliveries. Another highlight of the quarter that has buoyed investors is the company’s generation of positive free cash flow.
Without the Jeppesen sale, The Boeing Company (NYSE:BA)’s loss per share would have far exceeded the 39 cents loss forecasted by analysts, since the aircraft maker reported heavy losses in two major divisions, of $632 million in Commercial Airplanes and $507 million in Defense, Space & Security, which reflect the complications still facing the business.
In other news, on January 29, the company was awarded a contract to build an additional four MH-139A helicopters for the U.S. Air Force. This builds on a $173 million win in September for 8 aircraft, lifting the total value of the award to over $262 million.
The Boeing Company (NYSE:BA) is a leading aerospace company that manufactures commercial airplanes, space systems, and defense equipment for customers in more than 150 countries.
7. General Dynamics Corporation (NYSE:GD)
Price Target Upside: 13.83%
Number of Hedge Fund Holders: 58
General Dynamics Corporation (NYSE:GD) is among the 10 best American defense stocks to buy according to Wall Street analysts.
On February 2, Jefferies analyst Sheila Kahyaoglu lifted the price target on the stock to $385 from $360. The firm described the defense contractor’s outlook for 2026 as conservative and maintained a Hold rating.
This follows BofA Securities’ reiteration of a Buy rating on the stock with a price target of $400 on January 30. The firm acknowledged strength across the company’s defense business, while noting that the outlook for Gulfstream had failed to impress investors.
Moreover, while BofA Securities anticipates an improvement in profit margins ahead, it does not expect them to exceed the 15-17% range until 2028.
Based on the recommendations of 14 analysts, General Dynamics Corporation (NYSE: GD) is rated a Moderate Buy, with a 13.83% share price upside as of the close on February 5.
On January 28, the company reported strong fourth-quarter fiscal 2025 results, with growth in the combat and marine systems segments helping it beat estimates for both earnings and revenue.
However, the aerospace and defense giant’s forecast for earnings in 2026 fell shy of analysts’ estimates. The company has projected annual EPS to be between $16.10 and $16.20, below expectations of $17.29 per share, citing a bigger impact from tariffs compared to what it absorbed in 2025.
General Dynamics Corporation (NYSE:GD) is a leading global aerospace and defense company, operating through its Aerospace, Marine Systems, Combat Systems, and Technologies segments.
6. GE Aerospace (NYSE:GE)
Price Target Upside: 16.96%
Number of Hedge Fund Holders: 102
GE Aerospace (NYSE:GE) is among the 10 best American defense stocks to buy according to Wall Street analysts.
The stock has been on analysts’ radar and currently carries a Strong Buy rating, with a one-year average share price target of $358.33, representing 16.96% upside as of February 5.
Recent updates include JPMorgan’s January 26 lift of its price target on GE Aerospace (NYSE:GE) to $335 from $325, following the company’s fourth-quarter 2025 earnings beat.
According to TipRanks, the firm noted that the stock had underperformed lately due to higher expectations. However, JPMorgan remains optimistic about the company’s fundamentals and capabilities, which is why it reiterated an Overweight rating.
The jet-engine maker reported adjusted EPS of $1.57 for Q4, beating estimates by 14 cents and up 19% year-over-year. The company’s quarterly adjusted revenue also increased 20% year over year to $11.87 billion.
During the earnings call, GE Aerospace (NYSE:GE) shared its 2026 profit forecast, which exceeded Wall Street estimates. Due to aircraft supply constraints, airlines are spending more on maintenance, leading to an increase in demand for aftermarket parts and services.
In other news, on February 3, the company announced to invest up to $300 million over the next five years to expand its engine repair capabilities in Singapore.
GE Aerospace (NYSE:GE) is a global aerospace propulsion, services, and systems company with an installed base of around 25,000 military and 45,000 commercial aircraft engines.
5. Leonardo DRS, Inc. (NASDAQ:DRS)
Price Target Upside: 26.99%
Number of Hedge Fund Holders: 29
Leonardo DRS, Inc. (NASDAQ:DRS) is among the 10 best American defense stocks to buy according to Wall Street analysts.
The company was recently awarded a contract to support the Space Development Agency’s Tracking Layer Tranche 3 (TRKT3) with Infrared Mission Payloads.
Leonardo will work on the design, development, and integration of advanced infrared mission payloads for the advanced missile defense program, enhancing its capability to detect and track ballistic and hypersonic missiles.
In a press release dated January 27, Leonardo DRS, Inc. (NASDAQ:DRS)’s CEO John Baylouny said the award was a testament to the company’s expertise in advanced space-based technologies in support of national security priorities.
Following the announcement of the contract win, BTIG analyst Andre Madrid maintained a Buy rating on the stock, with a $50 price target. The firm believes the contract could open up opportunities for further lucrative awards ahead for the company.
As of the close on February 5, DRS is a Moderate Buy with a one-year average share price target of $47.33, representing an upside of 26.99%.
Leonardo DRS, Inc. (NASDAQ:DRS) provides advanced defense technologies to the U.S. government and its allies. The stock is up 9.33% year-to-date.
4. TransDigm Group Incorporated (NYSE:TDG)
Price Target Upside: 27.66%
Number of Hedge Fund Holders: 68
TransDigm Group Incorporated (NYSE:TDG) is among the 10 best American defense stocks to buy according to Wall Street analysts.
On February 4, UBS cut its price target on the stock to $1,800 from $1,804, while maintaining a Buy rating. The revision comes amid rising concerns over a deceleration in aftermarket growth.
However, according to TipRanks, the firm told investors in a research note that a high single-digit growth can be attained through pricing power, increased flight activity, and content gains. Moreover, UBS anticipates profit per share to grow in the high teens.
The firm also noted TransDigm Group Incorporated (NYSE:TDG)’s ‘bolt-on’ mergers and acquisitions strategy, reflected by the recent takeovers of Jet Parts Engineering, Victor Sierra Aviation Holdings, and Stellant Systems, Inc., for a combined value of approximately $3.2 billion.
In other news, on Tuesday, the company announced results for the first quarter of fiscal 2026. Net sales rose 14% year-over-year to $2.29 billion. Adjusted EPS came in at $8.23, up from $7.83 last year. However, reported net income fell 9.7% from the prior year’s period to $445 million, due to increased interest expenses.
Looking ahead, the aircraft parts maker’s projected profit for fiscal 2026 came in below Wall Street’s estimates, resulting in shares slumping 5% in premarket trading. Rising raw material costs and higher interest expense from recent acquisitions have been squeezing the company’s margins.
TransDigm Group Incorporated (NYSE:TDG) manufactures engineered aircraft components for commercial and military aircraft.
3. Loar Holdings Inc. (NYSE:LOAR)
Price Target Upside: 33.27%
Number of Hedge Fund Holders: 29
Loar Holdings Inc. (NYSE:LOAR) is among the 10 best American defense stocks to buy according to Wall Street analysts.
As of the close of business on February 5, the stock is a Strong Buy, with a one-year average share price target of $86.65, representing an upside of 33.27%.
Recent updates include Citigroup analyst John Godyn cutting the stock price target to $81 from $87 on Thursday while maintaining a Buy rating. This is an adjustment to the firm’s January revision to LOAR, when it raised the price target to $87 from $83, citing strong momentum in the aerospace and defense sector.
In other news, on January 22, Loar Holdings Inc. (NYSE:LOAR) announced it had completed its acquisition of Harper Engineering for $250 million. The company produces mechanical components for aircraft interiors. The transaction is expected to result in tax benefits of around $30 million for Loar.
This follows Loar’s acquisition of LMB Fans & Motors in December for €367 million plus assumed debt. The takeover is projected to add $60 million in revenue and $30 in adjusted EBITDA for 2026.
Loar Holdings Inc. (NYSE:LOAR) designs and manufactures niche aerospace and defense components for aircraft and aerospace and defense systems.
2. Firefly Aerospace Inc. (NASDAQ:FLY)
Price Target Upside: 62.22%
Number of Hedge Fund Holders: 22
Firefly Aerospace Inc. (NASDAQ:FLY) is among the 10 best American defense stocks to buy according to Wall Street analysts.
On January 20, Goldman Sachs lifted its price target on the stock to $32 from $29, while maintaining a Neutral rating. The firm’s adjustment came as part of its broader analysis of the aerospace and defense sector.
In a research note to investors, analyst Anthony Valentini noted favorable conditions for aerospace OEMs, with demand outpacing supply. He also highlighted the growth in defense hardware, while warning that margins could be squeezed from shifting contracts.
Earlier on January 16, Morgan Stanley’s Kristine Liwag raised the firm’s price target on Firefly Aerospace Inc. (NASDAQ:FLY) to $33 from $27 as it adjusted the valuation multiple for the stock ahead of the Flight 7 mission. The firm reiterated an Equal Weight rating on the shares.
As of the close of business on February 5, FLY is a Moderate Buy, with Wall Street analysts anticipating an upside of 62.22% to its share price.
The company, which only recently had its IPO in August last year, is attracting investor attention, with 22 hedge funds holding a stake in it, according to Insider Monkey’s database for Q3 2025.
Firefly Aerospace Inc. (NASDAQ:FLY) is a space and defense technology company, providing mission solutions for government and commercial customers.
1. AeroVironment, Inc. (NASDAQ:AVAV)
Price Target Upside: 64.96%
Number of Hedge Fund Holders: 37
AeroVironment, Inc. (NASDAQ:AVAV) is among the 10 best American defense stocks to buy according to Wall Street analysts.
Based on the recommendation from 13 analysts, the stock is a Strong Buy with a one-year average share price target of $390.75, representing an upside of nearly 65% as of February 5.
On January 30, Needham analyst Austin Bohlig maintained a Buy rating on the stock with a price target of $450. This is a reaffirmation of the firm’s earlier update in December.
This follows KeyBanc’s adjustment on AeroVironment, Inc. (NASDAQ:AVAV) earlier in the week on January 28, when the firm lifted its price target on the stock to $330 from $285, while keeping an Overweight rating.
KeyBanc anticipates a promising macro environment for space and defense stocks with potential for substantial growth in 2026. According to TipRanks, the firm also hinted at the possibility of re-rating several stocks in the sector ahead.
In other news, on January 28, the company announced it had secured a $75 million task order from the U.S. Air Force to develop next-generation biotechnology and materials science. The award highlights AVAV’s growing role in defense modernization.
AeroVironment, Inc. (NASDAQ:AVAV) designs and manufactures unmanned aerial vehicles, ground robot systems, and loitering munition systems.
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