In this article, we explore the 10 Best Defense Stocks That Will Skyrocket.
Global defense spending is on the rise as disputes such as the Russia-Ukraine war, Middle East conflicts, and U.S.-China tensions over Taiwan prompt nations to bolster their defenses. The US military spent $11.3 billion in the first six days of hostilities with Iran.
The US alone is poised to spend nearly $1 trillion on defense in 2026, with President Donald Trump requesting $1.5 trillion for defense in fiscal 2027.
“We view this unprecedented funding as a positive catalyst for the entire unmanned ecosystem, as expanding federal investment meaningfully increases the U.S. market opportunity not only for platform providers, but also across the broader value chain of critical subsystems and key components,” Needham analyst Austin Bohlig wrote.
Soaring geopolitical pressures are the latest tailwinds driving defense stocks higher. The stocks have been on a roll as investors look to capitalize on companies winning big defense government contracts. According to Bloomberg, individuals and families with significant stakes in defense arms have added more than $28 billion to their fortunes amid the escalating geopolitical tensions.
On the other hand, the Bloomberg index of global defense companies is up more than 15% in 2026, outperforming the broader stock market, while the S&P 500 Aerospace and defense industry is up by more than 3% year to date, affirming strong interest in defense stocks.
In the tense geopolitical climate, let’s take a look at some of the Best Defense Stocks That Will Skyrocket.
Our Methodology
To compile our list of the Best Defense Stocks That Will Skyrocket, we followed these steps: First, we screened companies operating within the defense sector. Next, we selected those with significant business operations and a track record of winning major defense contracts. We then narrowed the group to stocks with upside potential of more than 10% and favored by elite hedge funds in Q4 2025. Finally, we ranked the final list by each stock’s upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Best Defense Stocks That Will Skyrocket
10. GE Aerospace (NYSE:GE)
Stock Upside Potential: 13.72%
Number of Hedge Fund Holders: 117
GE Aerospace (NYSE:GE) is one of the best defense stocks that will skyrocket. On April 13, GE Aerospace inked an agreement with the Indian Air Force, paving the way for the establishment of an in-country depot facility.
The facility, tailored for the F404-IN20 engines that power the IAF’s Light Combat Aircraft Tejas fleet, will help enhance in-country repair and overhaul infrastructure. The facility will also help sustain and make available F404-IN20 engines that power the IAF’s Light Combat Aircraft.
Once fully operational, the facility will eliminate the need to depend on overseas repair centers, therefore improving turnaround times. It is to be owned, operated, and maintained by the Indian Air Force, with GE providing training support staff and necessary spares in addition to specialized equipment.
It marks the next step in the company’s four-decade-long term partnership with the Indian Air Force. GE Aerospace has also reiterated its commitment to developing India’s aerospace ecosystem, spanning design, development, and manufacturing.
GE Aerospace is now the primary entity under the GE ticker after General Electric completed its corporate restructuring. Other divisions, such as GE Vernova (energy) and GE HealthCare Technologies, trade under separate tickers (GEV and GEHC respectively). GE Aerospace remains focused on aviation, defense, and advanced manufacturing.
9. Booz Allen Hamilton Holding Corp (NYSE:BAH)
Stock Upside Potential: 17.13%
Number of Hedge Fund Holders: 38
Booz Allen Hamilton Holding Corp (NYSE:BAH) is one of the best defense stocks poised to skyrocket. On April 9, Booz Allen Hamilton confirmed that its venture capital arm has invested in Portal Space Systems. The investment in a space technology company developing maneuverable spacecraft for orbital operations is poised to strengthen the company’s prospects in mission integration, data, and cybersecurity.
Portal Space Systems is currently working on Starburst, an orbital maneuvering vehicle for operations within a destination orbit. It’s also working on Supernova, a trans-orbital spacecraft designed to enable movement across orbital regimes.
The investment aligns with Booz Allen’s growing portfolio of space-focused companies. The company is also increasingly advancing automation and operational resilience across various domains. It has already completed investments in Albedo, Quindar, and Starfish Space, affirming its push into growth opportunities in space capabilities.
Additionally, Booz Allen has completed the acquisition of Defy Security, which provides cybersecurity technology products and services to healthcare retail enterprises and financial services entities. Together, the companies plan to offer end-to-end tech-enabled cyber solutions.
Booz Allen Hamilton Holding Corp provides technology, consulting, and engineering services primarily to U.S. government defense, intelligence, and civil agencies, as well as global commercial clients. It also specializes in advanced AI, cybersecurity, software development, and systems engineering to solve complex mission-critical challenges.
8. General Dynamics Corporation (NYSE:GD)
Stock Upside Potential: 17.98%
Number of Hedge Fund Holders: 66
General Dynamics Corporation (NYSE:GD) is one of the best defense stocks that will skyrocket. On April 14, General Dynamics Corp secured three US Navy contracts worth $273.45 million. The company’s General Dynamics NASSCO-Norfolk secured a $183.23 million firm-fixed-price contract for the maintenance, modernization, and repair of USS Truxtun (DDG 103).
Work on the contract is to be performed in Norfolk, Virginia, and is scheduled for completion by April 2028. It also includes the option to increase to $183.58 million. On the other hand, General Dynamics Electric Boat Corp. in Groton, Connecticut, secured a $55.55 million cost-plus-fixed-fee modification to continue New England Maintenance Manpower Initiative support for non-nuclear maintenance of submarines.
It also secured a $34.68 million cost-plus-fixed-fee modification contract to continue New England Maintenance Manpower Initiative support for non-nuclear maintenance of submarines. The $55.55 million and $34.68 million contracts are to receive $20 million in fiscal 2026 operations and maintenance Navy funds.
General Dynamics Corporation is a major global aerospace and defense company that provides products and services to military, government, and commercial customers. It operates in four main segments: business aviation (Gulfstream), marine systems (submarines), combat systems (armored vehicles), and technologies (IT/mission systems).
7. TransDigm Group Incorporated (NYSE:TDG)
Stock Upside Potential: 19.26%
Number of Hedge Fund Holders: 79
TransDigm Group Incorporated (NYSE:TDG) is one of the best defense stocks that will skyrocket. On April 14, TransDigm Group Incorporated reiterated it expects net sales of between $2.54 billion and $2.545 billion for the thirteen-week period ended March 28, 2026. The company also expects EBITDA of between $1.33 billion and $1.335 billion.
The preliminary financial results also coincide with plans for an incremental $1.25 billion debt offering. The company’s wholly owned subsidiary plans to issue $1.25 billion in new debt, consisting of $250 million in new 6.125% senior notes due 2034 and $1 billion in new term loans. The company plans to use net proceeds from the debt offering to fund the purchase of Stellant Systems. Part of the proceeds will also go towards covering $800 million in common share repurchases completed in March.
On the other hand, the company has completed the acquisition of Jet Parts Engineering and Victor Sierra Aviation Holdings for $2.2 billion. The companies TransDigm Group has generated $280 million in revenue in 2025.
TransDigm Group Incorporated designs and supplies proprietary aerospace components used on nearly all commercial and military aircraft.
6. HEICO Corporation (NYSE:HEI)
Stock Upside Potential: 20.10%
Number of Hedge Fund Holders: 73
HEICO Corporation (NYSE:HEI) is one of the best defense stocks that will skyrocket. On April 9, HEICO Corporation confirmed that its Electronic Technologies Group unit has acquired a 90% stake in Southwest Antennas.
With the acquisition, the company gains access to a company that designs and manufactures rugged antennas for ground-based defense and law enforcement applications. It also designs and manufactures RF and microwave antennas that operate at frequencies up to 8.5 GHz. Southwest Antennas’ products have found widespread use in mission-critical and combat applications.
According to Heico Corp, in a statement, the acquisition marks an important milestone in the continued expansion into the antenna market. The acquisition also comes on the heels of the company’s acquisition of an 80% stake in Sherwood Avionics and Accessories. With the acquisition, the company strengthens its prospects in the maintenance, repair, and overhaul of electro-mechanical components for defense and commercial aviation platforms.
HEICO Corporation is a leading American aerospace, defense, and electronics company, known as the largest independent manufacturer of FAA-approved jet engine and aircraft component replacement parts.
5. The Boeing Company (NYSE:BA)
Stock Upside Potential: 22.86%
Number of Hedge Fund Holders: 114
The Boeing Company (NYSE:BA) is one of the best defense stocks that will skyrocket. On April 14, The Boeing Company confirmed it delivered 143 commercial aircraft in the first quarter of the year. The deliveries included 114 Boeing 737 aircraft, 15 Boeing 787 aircraft, 8 Boeing 777 aircraft, and 6 Boeing 767 aircraft.
The company’s Defense Space and Security division also reported deliveries. The orders included 17 AH-64 Apache helicopters, made up of two new aircraft, and 15 remanufactured units. Boeing also delivered two CH-47 Chinook helicopters, one new and one renewed.
On the other hand, the US Army has awarded the company a $324 million contract to deliver 6 CH-47F Block II Chinook helicopters. The new contract brings the total number of CH-47F Block II aircraft under contract to 24. It builds on the company securing a $1.19 billion, three-year contract to maintain and support the Army’s Apache attack helicopters and Chinook heavy-lift helicopters operated by Britain’s Royal Air Force.
In February, the company received initial qualification for 777-9 training devices. Consequently, the company is one step closer to conducting regulator-approved training on the Federal Aviation Administration (FAA) and European Union Aviation Safety Agency (EASA) issuing simulator qualification certificates.
The Boeing Company manufactures combat and surveillance aircraft, cargo planes, satellites, weapons, and is advancing autonomous systems.
4. CACI International Inc (NYSE:CACI)
Stock Upside Potential: 31.26%
Number of Hedge Fund Holders: 42
CACI International Inc (NYSE:CACI) is one of the best defense stocks poised to skyrocket. On March 24, CACI International Inc secured a five-year expertise task order worth $85 million. Under the agreement, the company is to provide critical engineering and technical support for ships, submarines, and other naval vessels.
The company was selected for its robust cybersecurity measures and innovative software-defined solutions that can enhance the Navy’s operational capabilities and set new efficiency standards. CACI is to offer data analysis software development and control system enhancement to improve the design and operation of naval assets.
CACI International has already secured a $287 million contract to spearhead the modernization of the US Army’s Integrated Personnel and Pay System – Army (IPPS-A). The company is tasked with providing advanced software-defined solutions that enhance quality, boost flexibility and adaptability, and strengthen confidence. It has also been awarded a five-year expertise task order valued at up to $306 million to provide software development and sustainment to the Defense Agencies Initiative (DAI).
CACI International Inc provides specialized technology, expertise, and services primarily to the U.S. federal government, including defense, intelligence, and civilian agencies. They focus on national security and modernization by delivering solutions in cybersecurity, data analytics, enterprise IT, and agile software development.
3. Parsons Corporation (NYSE:PSN)
Stock Upside Potential: 37.70%
Number of Hedge Fund Holders: 30
Parsons Corporation (NYSE:PSN) is one of the best defense stocks that will skyrocket. On April 14, Parsons Corporation confirmed it has been selected to provide construction management services for the Newtown Creek Combined Sewer Overflow Storage Tunnel project in New York City.
According to the New York City Department of Environmental Protection (DEP), the company is tasked with delivering a major underground infrastructure program to eliminate untreated sewer discharges into local waterways. It will provide construction management services for a large-diameter storage tunnel, tunnel dewatering pump station, and other structures. It was selected after working on more than 250 tunnels and ocean outfalls globally.
In addition, the company’s joint venture with GSI Americas has secured a $25 million contract with the United States Coast Guard (USCG). The joint venture is tasked with providing program management services to advance the USCG’s Execution Plan. The ultimate goal is to deliver transformational upgrades across Coast Guard assets, technology, and shore infrastructure.
Parsons Corporation is a leading technology-driven firm providing integrated solutions for the global defense, intelligence, and critical infrastructure markets. They specialize in cybersecurity, missile defense, space, geospatial intelligence, and infrastructure engineering, helping clients secure, manage, and modernize physical and digital assets. The program is crucial to improving water quality and protecting public health.
2. Palantir Technologies Inc. (NASDAQ:PLTR)
Stock Upside Potential: 43.01%
Number of Hedge Fund Holders: 89
Palantir Technologies Inc. (NASDAQ:PLTR) is one of the best defense stocks that will skyrocket. On March 30, Palantir Technologies Inc. reached an agreement to renew and expand its strategic partnership with Stellantis. The new five-year agreement is to support Stellantis’ efforts in industrialization and to secure the use of data and artificial intelligence.
Stellantis has also agreed to broaden its use of Palantir Foundry. Consequently, it will start leveraging Palantir Artificial Intelligence Platform (AIP) in select business functions. The integration should allow Stellantis teams to consolidate fragmented datasets, improve transparency, and enable faster decision-making.
On the other hand, Wedbush has touted Palantir’s commitment to accelerating its US commercial and government businesses. Its US commercial grew 137% year over year, while US government business grew 66%, enabling revenue growth of 56% last year. Consequently, the research firm has reiterated an Outperform rating on the stock with a $230 price target.
Palantir Technologies Inc. provides AI-enabled data analytics and software platforms (Gotham, Foundry, AIP) to defense and intelligence agencies, enabling them to integrate massive, siloed datasets for real-time decision-making. It powers multi-domain operations by connecting sensors to shooters, AI-driven targeting, threat detection, and battlefield intelligence.
1. AeroVironment, Inc. (NASDAQ:AVAV)
Stock Upside Potential: 55.87%
Number of Hedge Fund Holders: 40
AeroVironment, Inc. (NASDAQ:AVAV) is one of the best defense stocks that will skyrocket. On April 7, AeroVironment, Inc. received a $25 million contract from the US Air Force. Under the terms of the contract, the company is tasked with transitioning human health and performance technologies from research to field deployment.
The company is to mature mid-stage sensor, diagnostic, and material technologies to accelerate the delivery of deployable solutions that enhance warfighter readiness and survivability. AeroVironment was selected because it has the tools, track record, and technical expertise to tackle unique challenges with health-focused devices that have prevented them from reaching operational use. AeroVironment is to test at scale and advance health-focused technologies and devices.
Earlier, AeroVironment was selected by the United States Navy to provide Contractor-Owned, Contractor-Operated (COCO) Intelligence, Surveillance, and Reconnaissance (ISR) services. The company is competing for delivery orders to provide turnkey, persistent ISR support using autonomous platforms as part of a new initiative to expand and modernize ISR capabilities.
AeroVironment, Inc. is a defense technology company specializing in the design, development, and manufacture of autonomous robotic systems, including small unmanned aircraft systems (UAS), loitering munitions (such as the Switchblade kamikaze drones), counter-UAS systems, and tactical missile systems for global defense, government, and commercial customers.
READ NEXT: 12 Best Data Center Stocks to Buy Right Now and Top 10 Growth Stocks in Billionaire Philippe Laffont’s Portfolio.
Hedge Fund Resource Center