This article looks at the 11 Best Large Cap Defense Stocks to Buy According to Analysts.
The S&P Composite 1500 Aerospace & Defense Index is rebounding from the tariff-driven lows of April. Much of the surge has been driven by aerospace companies, while several major defense contractors have lagged.
American defense stocks have had a subdued 2025 so far amid concerns about U.S. military spending and tariffs. However, Wall Street analysts recommend buying any dips in shares as they anticipate an improvement in prospects for the sector in the year ahead.
Richard Safran, an analyst at Seaport Research, was quoted as saying the following by Bloomberg last month:
“If you see weakness, use these stocks as a buying opportunity… I think the market is underestimating defense spending growth. It’s just not being priced in.”
There are also hopes that the recent announcement by the U.S. and NATO to rearm Ukraine in its fight against Russia could turn things around. Under the agreement, Washington will supply the weapons to be paid for by NATO allies.
Moreover, NATO leaders have also pledged to increase their defense spending to 5% of the GDP by 2035. This is a significant jump from the current target of 2% of GDP and is being seen as a major positive for the defense sector.
With that said, let’s now discuss the best large-cap defense stocks to buy according to analysts.
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Our Methodology
For this article, we sifted through screeners to identify defense stocks that have a market cap of over $10 billion. From there, we selected 11 stocks with the highest positive share price upside potential and ranked them in ascending order. All data is as of the close of business on Monday, August 4, 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Best Large Cap Defense Stocks to Buy According to Analysts:
11. Embraer S.A. (NYSE:ERJ)
Share Price on August 4: $57.81
Average Upside Potential: 4.15%
Embraer S.A. (NYSE:ERJ) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On July 31, Wolfe Research upgraded the stock’s rating from Peer Perform to Outperform, citing improved fundamentals and exemption from steep U.S. tariffs.
Late last month, the planemaker came away unscathed when President Trump imposed a 50% tariff on most goods imported from Brazil. Embraer S.A. (NYSE:ERJ) was spared at 10%, avoiding a potential pandemic-like hit to its financials.
Wolfe Research analyst Myles Walton said the effective impact of the tariff was now closer to 5%, considering the high proportion of American-sourced content on Embraer S.A. (NYSE:ERJ)’s aircraft. He wrote the following in a client note on July 30:
“When we downgraded shares of Embraer (ERJ) in March, we were wary of an unpriced tariff risk (and a stock that had doubled in the prior 12 months). That risk has now come and gone, but the stock is at the same level.”
The analyst also noted Embraer S.A. (NYSE:ERJ)’s robust commercial aviation orders, fueled by strong demand at the Paris Air Show. Walton added that recent discussions with the management have further raised expectations that the momentum will continue.
Embraer S.A. (NYSE:ERJ) is a Brazilian jet manufacturer that produces aircraft for commercial, executive, and defense purposes.
10. GE Aerospace (NYSE:GE)
Share Price on August 4: $276.23
Average Upside Potential: 5.71%
GE Aerospace (NYSE:GE) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 6, the company announced that Cathay Pacific has signed an agreement to purchase more GE9X engines to power the 777-9 aircraft.
The deal has raised the airline’s total commitment to 35 GE9X-powered 777-9s. It also includes a service agreement for the maintenance, repair, and overhaul of the engines.
Mahendra Nair, Group Vice President for Commercial Programs at GE Aerospace (NYSE:GE), stated the following on the recent deal:
“Cathay Pacific was the first customer in the Asia-Pacific region to select the new GE9X engine and we’re honored they continue to place their confidence in our products and services. Combining the world’s largest twin-engine commercial passenger jet and the most powerful commercial aircraft engine will enable Cathay to reach destinations across the globe.”
The GE9X engine is the most powerful commercial aircraft engine in the world. It is also the most fuel-efficient in its class. Moreover, like all other commercial engines offered by the company, it can operate on Sustainable Aviation Fuel (SAF) blends.
In other related news, the Turkish Aerospace Industries (TAI) recently announced the signing of an agreement with GE Aerospace (NYSE:GE) to strengthen the F404 turbofan engines and any potential future collaborations related to Türkiye’s HURJET jet trainer.
9. General Dynamics Corporation (NYSE:GD)
Share Price on August 4: $312.78
Average Upside Potential: 6.60%
General Dynamics Corporation (NYSE:GD) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 1, the company’s Bath Iron Works business unit announced that the U.S. Navy was adding another DDG 51 destroyer to a multi-year contract awarded in 2023.
Bath Iron Works’ president Charles F. Krugh thanked the Congressional delegation for adding the ship to the FY25 Defense Appropriations Bill. He said the company was proud to be selected to build the ship and praised the efforts of his team for improving the construction process. Krugh further added that the unit was clawing back to schedule to deliver more ships to the Navy.
General Dynamics Corporation (NYSE:GD)’s Bath Iron Works unit currently has several naval ships under construction. These include the Flight IIA Arleigh Burke-class destroyers Harvey C. Barnum Jr. (DDG 124) and Patrick Gallagher (DDG 127). The shipbuilding team is also working on Flight III configuration destroyers DDG 126, DDG 130, DDG 132, DDG 134, and DDG 136.
General Dynamics Corporation (NYSE:GD) is a leading defense contractor, operating through its Aerospace, Marine Systems, Combat Systems, and Technologies segments.
8. L3Harris Technologies, Inc. (NYSE:LHX)
Share Price on August 4: $278.06
Average Upside Potential: 7.30%
L3Harris Technologies, Inc. (NYSE:LHX) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 4, the company showcased its newest Solid Rocket Motor (SRM) production facility in Huntsville, Alabama, in a ceremony that was attended by local and state leaders and customers.
The facility, known as Advanced Manufacturing Facility – South (AMF-South), is larger than the size of six football fields and has been designed to support surging defense production demands, including President Trump’s Golden Dome project.
The AMF-South specializes in producing inert parts for solid rocket motors, such as nozzles, aft closures, and exit cones. L3Harris Technologies, Inc. (NYSE:LHX) has invested over $20 million in renovations to support the facility. The firm’s Title III Defense Production Act cooperative agreement with the DoD has also helped to fund additional expenses.
The facility is designed to be scalable and flexible. It is currently supporting programs such as the Standard Missile, Javelin, and Guided Multiple Launch Rocket System, with plans to expand to other initiatives in the future.
Ken Bedingfield, President at L3Harris Technologies, Inc. (NYSE:LHX)’s Aerojet Rocketdyne, stated the following on the facility’s opening:
“Solid rocket motors remain essential to the vast majority of critical defense programs that protect our communities, military and allies. Our growth in Huntsville represents another significant investment we are making to boost production capacity of critical components, and we’re proud that they are being made in Alabama.”
7. Woodward, Inc. (NASDAQ:WWD)
Share Price on August 4: $259.87
Average Upside Potential: 10.01%
Woodward, Inc. (NASDAQ:WWD) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 4, Barclays raised the firm’s share price target to $260 from $200, while maintaining an Equal-Weight rating for the stock.
The revision followed the company’s Q3 FY25 earnings call on July 28, in which it reported strong results driven by robust demand across end markets. Woodward, Inc. (NASDAQ:WWD)’s net sales grew 8% year-over-year to a record $915 million. Earnings per share were posted at $1.76, comfortably beating estimates of $1.62.
Based on a strong year-to-date financial performance and solid outlook for the fourth quarter, Woodward, Inc. (NASDAQ:WWD) raised its sales and earnings guidance for the fiscal year. However, the company lowered its free cash flow guidance for the full year, considering the challenges to support sales in a dynamic supply chain and production environment.
In other news, Woodward, Inc. (NASDAQ:WWD) recently completed the acquisition of Safran’s Electronics & Defense electromechanical actuation business in the U.S., Canada, and Mexico, inclusive of operations assets, talent, intellectual property, and long-term customer agreements.
6. Howmet Aerospace Inc. (NYSE:HWM)
Share Price on August 4: $181.16
Average Upside Potential: 11.48%
Howmet Aerospace Inc. (NYSE:HWM) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 4, Bank of America Securities (BofA) hiked the firm’s price target to $215 from $185, while maintaining a Buy rating for its shares.
While the company’s second-quarter results left investors feeling uncertain, analyst Ronald Epstein argues that Howmet Aerospace Inc. (NYSE:HWM)’s strategic production rates are below major aircraft makers, which mitigates the burden associated with destocking and will benefit the firm once the production rates stabilize for its manufacturers.
Epstein also cited Howmet Aerospace Inc. (NYSE:HWM)’s strong performance in the defense sector, with revenue growth driven by legacy programs. The analysts also acknowledged encouraging growth in the company’s industrial gas turbines segment, fueled by robust power demand from data centers.
Moreover, the BofA analyst highlighted Howmet Aerospace Inc. (NYSE:HWM)’s strategic investments in Japan and Europe, aimed at expanding capacity, as further evidence of its growth potential.
5. Axon Enterprise, Inc. (NASDAQ:AXON)
Share Price on August 4: $744.88
Average Upside Potential: 11.88%
Axon Enterprise, Inc. (NASDAQ:AXON) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 5, Needham analyst Joshua Reilly raised the stock’s price target to $870 from $820, while maintaining a Buy rating for its shares.
The adjustment follows the company’s second-quarter earnings call on August 4, with reported revenue beating consensus estimates by 420 basis points. Axon Enterprise, Inc. (NASDAQ:AXON) posted earnings per share of $2.12, comfortably surpassing expectations of $1.45 per share.
Reilly noted the robust performance delivered by Axon Enterprise, Inc. (NASDAQ:AXON)’s new and existing products during the quarter. The Needham analyst also highlighted potential growth catalysts during the second half of the fiscal year, as Bodycam, TASER, and software products gain greater interest from countries in Europe.
Axon Enterprise, Inc. (NASDAQ:AXON) is a technology company in global public safety. The stock has surged in 2025, with year-to-date gains of over 45%. Wall Street analysts expect the momentum to continue with an average share price upside potential of nearly 12%.
4. The Boeing Company (NYSE:BA)
Share Price on August 4: $222.34
Average Upside Potential: 12.49%
The Boeing Company (NYSE:BA) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. The aircraft manufacturer is encountering a major labor strife, as more than 3,000 defense unit workers have gone on strike after turning down a contract offer.
Late last month, union members at the company’s St. Louis defense hub overwhelmingly voted to reject a contract offer, which proposed a 20% wage boost over four years, a $5,000 ratification bonus, more vacation time, and sick leaves. The vote was followed by a week-long cooling-off period, which ended on August 3.
The International Association of Machinists and Aerospace Workers (IAM) rejected the proposal, saying it fell short of addressing the priorities and sacrifices of the workforce. Earlier this week, CNBC quoted Tom Boelling, an IAM District 837 directing business representative, as saying the following:
“IAM District 837 members have spoken loud and clear, they deserve a contract that reflects their skill, dedication, and the critical role they play in our nation’s defense. We stand shoulder to shoulder with these working families as they fight for fairness and respect on the job.”
The workers maintain and assemble the F-15 fighter jet and missile systems. This is the group’s first strike since 1996. It comes as a setback for The Boeing Company (NYSE:BA), as it was expanding manufacturing in the St. Louis area, especially after winning the contract for the F-47 fighter jet earlier this year.
3. Lockheed Martin Corporation (NYSE:LMT)
Share Price on August 4: $423.70
Average Upside Potential: 14.98%
Lockheed Martin Corporation (NYSE:LMT) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 6, the company announced that its first Next-Generation Overhead Persistent Infrared (Next-Gen OPIR) Geosynchronous Earth Orbit (GEO) Block 0 satellite had completed environmental testing.
The new missile warning satellite, which is more capable and survivable, completed both thermal vacuum and acoustic testing, putting it on track for delivery. The tests were performed at Lockheed Martin Corporation (NYSE:LMT)’s space facility in Sunnyvale, California.
During the thermal vacuum testing, the Next-Gen OPIR GEO withstood a challenging, simulated space environment with extreme temperatures and low pressures of space. The acoustic testing proved that the satellite can handle the violent vibrations it will face during launch.
With environmental testing complete, Lockheed Martin Corporation (NYSE:LMT) says the missile warning satellite is now in the final systems integration phase, where it will test connections with ground systems. The Next-Gen OPIR GEO will provide an unmatched view of the planet’s mid-latitudes to detect threats to the United States and its allies.
2. Leonardo DRS, Inc. (NASDAQ:DRS)
Share Price on August 4: $42.25
Average Upside Potential: 15.20%
Leonardo DRS, Inc. (NASDAQ:DRS) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On July 31, Morgan Stanley analyst Kristine Liwag raised the stock’s price target to $47 from $44, while maintaining an Equal-Weight rating for its shares.
The adjustment, which reflects a nearly 11% upside from its current trading price, followed Leonardo DRS, Inc. (NASDAQ:DRS)’s second-quarter financial results a day earlier, in which the company beat earnings estimates and posted a 42% surge in net profit, driven by healthy bookings, solid organic revenue growth, and continued margin expansion.
Leonardo DRS, Inc. (NASDAQ:DRS)’s backlog rose 9% year-over-year to $8.6 billion, signalling significant potential for future revenue growth. The defense technologies company also raised its guidance across all metrics, citing continued organic growth.
In other related news, on July 11, Truist Securities reiterated a Buy rating for the stock and lifted its share price target to $51 from $45. Goldman Sachs also recently initiated coverage of Leonardo DRS, Inc. (NASDAQ:DRS) with a Buy rating and announced a price target of $49.
Wall Street analysts maintain a positive outlook for the stock, with 6 out of 9 firms having a Buy rating for its shares. Leonardo DRS, Inc. (NASDAQ:DRS) has a one-year average share price target of $48.67, representing a 15.20% upside potential.
1. Textron Inc. (NYSE:TXT)
Share Price on August 4: $77.81
Average Upside Potential: 18.03%
Textron Inc. (NYSE:TXT) is among the 11 Best Large Cap Defense Stocks to Buy According to Analysts. On August 5, the company announced that Textron Systems in May delivered the second Systems Integration Lab (SIL) for the Advanced Reconnaissance Vehicle (ARV) program to the U.S. Marine Corps.
The lab replicates the interior of the C4UAS Cottonmouth vehicle, which will aid in modernizing the development of vehicle electronics using a Modular Open Systems Approach (MOSA). The updated SIL features a GVOS-based architecture with Tactical Assault Kit Extended framework to ease the integration of new capabilities.
According to Textron Inc. (NYSE:TXT), Textron Systems performed a live demonstration of the SIL to U.S. government officials during the critical design review in October 2024. The company also stated that it is scheduled to deliver an ARV-30mm prototype to the Marine Corps later this year for testing and evaluation.
The purpose-built Cottonmouth ARV will enhance the fleet’s ability to perform reconnaissance operations through improved survivability, mobility, and mission packages for the Mobile Reconnaissance Battalion (MRB).
Textron Inc. (NYSE:TXT) manufactures products for consumers across several industries by leveraging its network of aircraft, defense, finance, and industrial businesses.
While we acknowledge the potential of TXT 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 TXT and that has 100x upside potential, check out our report about this cheapest AI stock.
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