This article looks at the 11 Best Performing Defense Stocks to Buy Now.
The S&P Composite 1500 Aerospace & Defense Index gained 1.41% last week, as defense stocks surged following Commerce Secretary Howard Lutnick’s suggestion that the United States might take ownership in some of them.
While talking to CNBC on August 26, Lutnick said there was a ‘monstrous discussion’ ongoing about the sector. The Commerce Secretary also singled out Lockheed Martin during the conversation and stated that the company was like ‘an arm of the U.S. government’, given how a majority of its revenue comes from federal contracts.
However, analysts are questioning the legality of such a move. Todd Harrison, a senior fellow at the American Enterprise Institute, was quoted as saying the following by Bloomberg:
“It’s one thing for the government to bail out a company that’s critical to national security if it’s at risk of failing. It’s another thing entirely for the government to take an equity stake in a perfectly healthy company. It’s not clear why the administration thinks this is necessary and what legal authority it has to do such a thing.”
The speculations follow a series of recent interventions by the administration, including equity stakes in Intel, and recent revenue-sharing deals with Nvidia and AMD.
Lutnick has denied criticism that the moves amount to socialism. Subsequently, Kush Desai, the White House spokesperson, added that President Trump was looking to safeguard national and economic security, and that the administration will continue exploring other deals while ensuring the best bargain for taxpayers.
With that said, let’s now head over and discuss the best performing stocks to buy in the defense industry.
The New York Stock Exchange building. Photo by Дмитрий Трепольский on Pexels
Our Methodology
For this article, we went through screeners to identify stocks in the defense industry. From there, we picked the top 11 stocks with the highest year-to-date percentage gains in share price, as of the close of business on August 28, 2025, and listed them in ascending order.
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 Performing Defense Stocks to Buy Now:
11. Optex Systems Holdings, Inc (NASDAQ:OPXS)
YTD Gains as of August 28: 62.95%
Optex Systems Holdings, Inc (NASDAQ:OPXS) is among the 11 Best Performing Defense Stocks to Buy Now. On August 5, the firm was awarded a $1.6 million order from General Dynamics Land Systems Canada for laser-protected periscopes that are vital for the mission capabilities of armored vehicles.
With this order, Optex Systems Holdings, Inc (NASDAQ:OPXS)’s backlog has crossed the $45 million mark. Deliveries are scheduled for FY 2026. The contract also reaffirms the company’s leadership in laser-protected vision systems and its commitment to aiding the mission readiness of American allies. Its periscopes and optical sighting systems offer enhanced durability, reliability, and superior optical clarity in harsh combat environments.
In other news, Optex Systems Holdings, Inc (NASDAQ:OPXS) recently reported strong results for the three months ended June 29, 2025. The company’s revenue surged 22.6% year-over-year, while net income grew 19.7% from the prior period. The encouraging results were driven by higher periscope production at the Richardson facility and rising customer demand across the Richardson and Applied Optics segments.
Optex Systems Holdings, Inc (NASDAQ:OPXS) develops optical sighting systems and assemblies, mainly for Department of Defense (DOD) applications. The stock has had impressive returns in 2025, surging over 60% year-to-date.
10. GE Aerospace (NYSE:GE)
YTD Gains as of August 28: 63.71%
GE Aerospace (NYSE:GE) is among the 11 Best Performing Defense Stocks to Buy Now, with its share price surging over 63% year-to-date. However, the company is encountering a major labor strife with more than 600 UAW workers going on strike at two facilities.
On August 28, workers at the firm’s Evendale, Ohio, plant, which builds industrial and marine engines for the Navy, and the Erlanger distribution facility in Kentucky, which supplies parts to engine plants, went on strike after failing to reach a new contract agreement.
This marks the latest strike in a wave of labor unrest across the aerospace sector, with workers pressing to secure new contracts that offer higher wages and job protection. Union members had voted in favor of a strike if a new agreement was not reached with GE Aerospace (NYSE:GE) by August 27.
A spokesperson for GE Aerospace (NYSE:GE) told Reuters that the firm had activated a contingency plan, while adding that it was disappointed at the union deciding to strike before the workers were given a chance to vote on the offer.
9. Safe Pro Group Inc. (NASDAQ:SPAI)
YTD Gains as of August 28: 74.87%
Safe Pro Group Inc. (NASDAQ:SPAI) is among the 11 Best Performing Defense Stocks to Buy Now. On August 27, the company announced that it had successfully completed a week-long training program with the Philippines military on AI analysis and drone operations for Army and Navy units.
The training program on land mine detection and Humanitarian Unexploded Ordnance (UXO) was held at Camp Aquino in Tarlac. It was facilitated by the Golden West Humanitarian Foundation under a grant from the U.S. Department of State.
During the program, Safe Pro Group Inc. (NASDAQ:SPAI) demonstrated SpotlightAI, its AI-powered drone imagery analysis ecosystem, in a humanitarian mine action setting. This involved the use of the company’s patented SPOTD technology, which can rapidly detect over 150 different kinds of hard-to-detect landmines, cluster munitions, anti-personnel mines, and UXO.
According to the press release, Safe Pro Group Inc. (NASDAQ:SPAI)’s team had trained more than 30 EOD technicians on how AI-powered drone imagery analysis technology enhances the identification and detection of explosive threats.
The firm further added that the technology could be deployed in real-time, powered by SPOTD NODE, or by leveraging AWS. Safe Pro Group Inc. (NASDAQ:SPAI)’s data sets currently include over 1.78 million drone images and more than 31,600 threats identified across 19,321 acres in Ukraine.
Safe Pro Group Inc. (NASDAQ:SPAI) is a leading provider of security and protection solutions, with expertise in advanced AI/ML software technology for small object threat detection. The stock has had impressive returns this year, gaining nearly 75% as of the close of business on August 28.
8. Planet Labs PBC (NYSE:PL)
YTD Gains as of August 28: 81.61%
Planet Labs PBC (NYSE:PL) is among the 11 Best Performing Defense Stocks to Buy Now. On August 26, the company announced that it had launched two additional Pelican satellites into orbit.
The high-resolution, AI-enabled Pelican-3 and Pelican-4 satellites were launched from California on SpaceX’s Falcon 9 rocket. Planet Labs PBC (NYSE:PL) said it had begun the commissioning process after successfully making contact with the satellites.
The latest additions of the satellites build on Planet Labs PBC (NYSE:PL)’s fleet of next-generation tasking satellites. The Pelican-3 and Pelican-4 can offer up to 40 cm class resolution imagery across six multispectral bands optimized for cross-sensor analysis. These are also equipped with NVIDIA’s Jetson AI platforms, enabling swift on-orbit computing and insights delivery.
Planet Labs PBC (NYSE:PL) provides global daily satellite imagery and geospatial solutions. The stock has had impressive returns in 2025, gaining over 80% year-to-date as of August 28.
7. SIFCO Industries, Inc. (NYSEAMERICAN:SIF)
YTD Gains as of August 28: 83.33%
SIFCO Industries, Inc. (NYSEAMERICAN:SIF) is among the 11 Best Performing Defense Stocks to Buy Now. The stock has returned 48% over the past month, with a significant surge following the announcement of third-quarter fiscal 2025 results on August 15.
Net sales for the quarter were posted at $22.1 million, up from $22 million in the prior year’s period. SIFCO Industries, Inc. (NYSEAMERICAN:SIF)’s net income from continuing operations was $3.3 million, or $0.54 per diluted share, improving from a net loss of $0.9 million, or $0.16 per diluted share, in Q3 FY24.
SIFCO Industries, Inc. (NYSEAMERICAN:SIF)’s financial performance for the first nine months of fiscal 2025 also continues to impress investors. Net sales for the period stood at $62 million, compared to $58 million during the same period last year. Total net loss from continuing operations was also significantly down to $0.4 million, from a loss of $7.2 million in the first nine months of 2024.
The management says that demand for the company’s products remains strong as end users grow production. Moreover, raw material availability has improved, and pricing discussions with customers have been favorable so far.
SIFCO Industries, Inc. (NYSEAMERICAN:SIF) produces forgings and machined components for the aerospace, energy, defense, and commercial space markets. The stock has impressive year-to-date returns of 83.33% in 2025, as of the close of business on August 27.
6. Mobilicom Limited (NASDAQ:MOB)
YTD Gains as of August 28: 84.44%
Mobilicom Limited (NASDAQ:MOB) is among the 11 Best Performing Defense Stocks to Buy Now. On August 21, the company announced that a major Israeli defense contractor, which is a Tier-1 customer, had selected its Ground Control Stations (GCS) to support the latter’s Remote Control Weapons Systems (RCWS).
This win marks a significant cross-sale and expansion with the client, which has already integrated Mobilicom Limited (NASDAQ:MOB)’s SkyHopper datalinks into other critical defense platforms.
The 10” Maxi Controller Pro is a tactical GCS that supports drone and robot operations with various payloads. The ability to transmit real-time HD video and broadband data content, coupled with simultaneous daylight-readable viewing, makes it a perfect fit for air and ground missions.
According to Mobilicom Limited (NASDAQ:MOB), it is fully integrated with the customer’s RCWS and is in the final stage of testing with Israel’s Ministry of Defense. The company views the deployment as a potential catalyst for international sales and large scale production orders ahead.
Mobilicom Limited (NASDAQ:MOB) provides cybersecure solutions for the defense and commercial drone and robotics market. The stock has surged over 84% year-to-date, as of the close of business on August 28.
5. Karman Holdings Inc. (NYSE:KRMN)
YTD Gains as of August 28: 84.53%
Karman Holdings Inc. (NYSE:KRMN) is among 11 Best Performing Defense Stocks to Buy Now. The stock has returned nearly 85% since its debut on the NYSE in February this year.
Industry experts credit the surge to the growing appetite for defense and space firms under the Trump administration. The President’s ambitious plan to build the ‘Golden Dome’ missile defense system also presents an opportunity for Karman Holdings Inc. (NYSE:KRMN), given its expertise in areas like hypersonic missile defense.
Investors have also been buoyed by Karman Holdings Inc. (NYSE:KRMN)’s recent strategic acquisitions. In May, it acquired Industrial Solid Propulsion (ISP), a leading supplier of energetic propulsion technologies for the UAS, UAS-intercept, and rocket-assisted takeoff systems. This followed April’s acquisition of Metal Technology Inc., a firm with expertise in manufacturing specialized refractory metal alloy systems.
Karman Holdings Inc. (NYSE:KRMN)’s financial performance has also impressed investors. On August 7, the company announced record results for the second quarter of FY 2025, with quarterly revenue growing 35.3% year-over-year to a record $115.1 million. It generated a record net income of $6.8 million, up 47.8% from the prior year. The firm also achieved a record funded backlog of $719.3 million, increasing 24.1% from Q4 2024.
Looking ahead, Karman Holdings Inc. (NYSE:KRMN) expects the momentum to continue, with robust defense spending, a growing interest in space projects, and the Golden Dome program, representing likely headwinds for the rest of 2025.
4. Elbit Systems Ltd. (NASDAQ:ESLT)
YTD Gains as of August 28: 84.88%
Elbit Systems Ltd. (NASDAQ:ESLT) is among 11 Best Performing Defense Stocks to Buy Now. On August 26, BofA Securities raised the stock’s price target to $540 from $500, while maintaining a Buy rating for its shares.
The analyst cited the company’s continued delivery on robust demand as the reason behind the adjustment. The new price target represents an 8% upside from the previous target and 12% from its current share price.
The BofA analyst also raised its 2025 EPS forecast for Elbit Systems Ltd. (NASDAQ:ESLT), alongside its multiple, reflecting stronger-than-anticipated growth in the quarter.
Elbit Systems Ltd. (NASDAQ:ESLT) is an Israel-based defense technology company whose share price has surged nearly 85% year-to-date, with several high-value contracts bolstering investor sentiment.
3. Rocket Lab Corporation (NASDAQ:RKLB)
YTD Gains as of August 28: 91.95%
Rocket Lab Corporation (NASDAQ:RKLB) is among 11 Best Performing Defense Stocks to Buy Now. On August 28, the company announced the opening of Launch Complex 3, a dedicated facility for the test, launch, and landing of the Neutron rocket.
The opening marks a significant step forward in delivering a reliable, responsive, and alternative launch capability from American soil. The facility is located within the Virginia Spaceport Authority’s (VSA) Mid-Atlantic Regional Spaceport (MARS) in Wallops Island, Virginia.
Launch Complex 3 will deliver the largest orbital launch capacity in the history of the Spaceport with Neutron, which is Rocket Lab Corporation (NASDAQ:RKLB)’s reusable launch vehicle, having a capacity of launching 13,000 kg to space for national security missions, commercial constellations, and eventually human spaceflight.
Sir Peter Beck, founder and CEO of Rocket Lab Corporation (NASDAQ:RKLB), stated the following on Launch Complex 3’s opening:
“Launch Complex 3 is our commitment to providing assured access to space and the launch site diversity that’s needed in the United States for its most important missions. Our Neutron rocket, with its ability for responsive space access as a high cadence reusable launch vehicle, expands Virginia’s aerospace capabilities to enable the United States to quickly and reliably reach the International Space Station and low Earth orbit, as well as explore beyond Earth and on to the Moon and Mars. Together with the Commonwealth of Virginia, VSA, and NASA, we’re strengthening the nation’s leadership in space while creating new opportunities for innovation and growth in the state and beyond, and I’m thankful for their continued support of Rocket Lab in Virginia.”
Rocket Lab Corporation (NASDAQ:RKLB) is an end-to-end space company with an established track record of delivering mission success. The stock has had impressive returns in 2025, gaining over 91% year-to-date, as of the close of business on August 28.
2. Astronics Corporation (NASDAQ:ATRO)
YTD Gains as of August 28: 139.58%
Astronics Corporation (NASDAQ:ATRO) is among 11 Best Performing Defense Stocks to Buy Now. The firm provides advanced technologies to global aerospace, defense, and electronics clients.
The stock has more than doubled in 2025, with year-to-date gains of over 139%, as of the close of business on August 28. The rally has been driven by robust quarterly financial results, growing industry recognition, and innovative product launches, which have helped garner investor confidence.
In April, Astronics Corporation (NASDAQ:ATRO) launched the SkyShow Server, an advanced moving map system, delivering 4K resolutions to raise the bar for aircraft cabin integration and in-flight entertainment.
More recently, the company unveiled the ATS-9000M communications system analyzer, its latest solution for Land Mobile Radio testing and analysis, building on the legacy of its predecessors. While the monitor retains past trusted features, the new version comes with significant enhancements to expand capabilities and improve performance.
On August 6, Astronics Corporation (NASDAQ:ATRO) reported results for the second quarter of fiscal 2025, with sales growing 3.3% year-over-year to $204.7 million. The increase was driven by a 9.4% surge in Aerospace sales. The company has raised the lower end of its guidance for 2025 to $840 million to $860 million, up from $820 million to $860 million previously. Net income stood at $1.3 million, or $0.04 per diluted share.
1. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
YTD Gains as of August 28: 159.70%
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is among 11 Best Performing Defense Stocks to Buy Now. The firm’s shares have surged nearly 160% year-to-date, as of the close of business on August 28.
Wall Street analysts have a consensus Buy rating for the stock, with a one-year average share price target of $70.47, representing a further 7% upside potential from its current trading level.
On August 14, BTIG upgraded Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s stock rating to Buy from Neutral and announced a share price target of $80. The firm’s analysts cited the company’s downselection for the Marine Corps’ MUX TACAIR program as the primary reason for the upgrade.
This followed RBC Capital’s price target revision for the stock from $50 to $65 on August 8 after the company’s earnings beat during the second quarter. The firm maintained its earlier Outperform rating for Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS).
During the month, Canaccord Genuity also initiated coverage of the stock with a Buy rating and announced a price target of $74.
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative and affordable products and platforms for national security needs. It is involved in various technological areas, such as unmanned systems, C5ISR, satellite communications, warfighter training, and combat systems.
While we acknowledge the potential of KTOS 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 KTOS and that has 100x upside potential, check out our report about this cheapest AI stock.
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