This article looks at the 10 Largest Defense Stocks in 2025.
Several defense giants over the last few days raised their 2025 outlooks, citing higher demand despite tariffs and ongoing economic uncertainty. Wars in Ukraine and Gaza have spurred military spending worldwide, helping to draw investors towards defense stocks.
Another vital factor driving the momentum has been the rising defense budgets of European countries, especially after President Trump took office in January and prompted Europe to spend more on defense while stressing that Washington could no longer foot the bill.
In May, the United States agreed to sell Saudi Arabia an arms package worth $142 billion. The deal, deemed as the largest defense cooperation agreement ever made by Washington, is also contributing to the strong performance of American defense stocks.
The NYSE Arca Defense Index has surged 43.81% this year as of the close on October 23, and has comfortably outpaced the S&P 500 Index, which has returned 14.82% during the period.
While large defense stocks continue to benefit, smaller-cap contractors have also emerged as standout performers this year, amid surging demand for next-generation, low-cost military technology as nations modernize their militaries with AI-powered drones and unmanned vehicles that are cheap and cut dependence on ground forces.
Jon Siegmann, Managing Director at Stifel, who covers the aerospace and defense industry, was quoted as saying the following by Reuters last month about the shift towards agile and adaptable combat systems:
“The winners in this new market will be those companies leaning into the change and investing in low-cost, upgradable, and software-enabled weapon systems.”
With that said, let’s now head over to see the 10 Largest Defense Stocks in 2025.
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Our Methodology
We used screeners to compile a list of defense stocks and ranked them in ascending order of market capitalization as of the close of business on Monday, October 23, 2025. Additionally, we also included data on hedge fund holdings in these companies as of Q2 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. Curtiss-Wright Corporation (NYSE:CW)
Market Cap: $21.0 Billion
Number of Hedge Fund Holders: 60
Curtiss-Wright Corporation (NYSE:CW) is among the 10 Largest Defense Stocks in 2025. On October 20, Stifel lifted the stock’s price target to $502 from $457 while maintaining a Hold rating for its shares.
The analyst noted that, following uncertainty in global markets since April this year, the industrial companies he covers have been able to pass price increases to customers with little resistance. Moreover, the research firm believes that tariffs, on average, have been only slightly accretive to EPS for these companies.
Stifel cited Curtiss-Wright Corporation (NYSE:CW) an innovative company providing high-tech and critical-function offerings to structurally growing markets. It believes the company can outgrow markets through new product developments in stable to growing sectors.
The firm also highlighted CW’s strong free cash flow generation, which provides the company with the capacity to pursue inorganic growth opportunities. Stifel added that Curtiss-Wright Corporation (NYSE:CW)’s growth trajectory can be further enhanced by availing what it described as ‘multi-decade nuclear opportunities’.
Earlier this month, the company was selected by American Rheinmetall to provide the Turret Drive Stabilization System for the prototype phase of the U.S. Army’s XM30 Combat Vehicle program. Curtiss-Wright will also be supplying encrypted flight data recorder technology to Bell Textron for the Army’s MV-75 Long Range Assault Aircraft Program.
Curtiss-Wright Corporation (NYSE:CW) provides engineered products, solutions, and services for the aerospace and defense markets.
9. Rocket Lab Corporation (NASDAQ:RKLB)
Market Cap: $30.8 Billion
Number of Hedge Fund Holders: 46
Rocket Lab Corporation (NASDAQ:RKLB) is among the 10 Largest Defense Stocks in 2025. On October 17, KeyBanc lifted the price target on the stock to $75 from $50 while maintaining an Overweight rating on its shares following a meeting with the company’s CEO and CFO and a visit to its Long Beach, CA, headquarters.
The firm said that it had gained incremental visibility into the robust growth within Rocket Lab Corporation (NASDAQ:RKLB)’s Space Systems segment and the production of Archimedes engines. KeyBanc believes the company is positioning itself as a national security asset through its hypersonic initiatives and reliable space access.
The analyst also noted the company’s strong cash position, which is facilitating the ongoing growth investments, likely mergers and acquisitions, and future space endeavors.
Overall, Wall Street analysts have a bullish outlook for the stock with a consensus Buy rating. However, its one-year average share price target of $58.67 represents a near 8% downside from Wednesday’s close.
Rocket Lab Corporation (NASDAQ:RKLB) is an end-to-end space company with an established track record of delivering mission success. The stock is skyrocketing in 2025, with year-to-date returns of nearly 150%.
