This article looks at the 12 Best Defense Stocks to Buy Right Now.
Smaller U.S. defense stocks have soared this year amid the Pentagon’s tilt towards agile and adaptable combat systems. Demand for low-cost, next-generation military technology is also on the rise as countries modernize their militaries with AI-powered drones and unmanned vehicles that are not only cheap but also cut dependence on ground forces.
The NYSE Arca Defense Index had returned nearly 34% year-to-date, as of the close on September 18, comfortably outpacing the S&P 500 index’s 12% rise during the period. Seven of the top ten gainers on the defense index were mid to small-cap firms, with drone makers leading the pack.
Jon Siegmann, who covers the aerospace and defense industry at Stifel, was quoted as saying the following by Reuters on the trend:
“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.”
After a sedate start to the year, the intensifying wars in Ukraine and Gaza have spurred defense expenditure across the world, which has lifted defense stocks and drawn investors’ attention back toward the sector.
With that said, let’s now head over to the list of the best defense stocks to buy right now.
Jordan Tan / Shutterstock.com
Methodology
We used screeners to identify stocks in the defense industry and from there selected the top 12 stocks with the highest number of hedge fund investors having a stake in them, based on Insider Monkey’s database of 983 prominent hedge funds as of Q2 2025. The stocks are listed in ascending order of hedge fund sentiment.
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).
12. L3Harris Technologies, Inc. (NYSE:LHX)
Number of Hedge Fund Holders: 53
L3Harris Technologies, Inc. (NYSE:LHX) is among the 12 Best Defense Stocks to Buy Right Now. On September 15, the company announced that it had won a multi-year, $292 million contract for continued production of propulsion for the Javelin weapon system.
This is the largest propulsion production contract received so far for the program and represents a production extension for 5 years. Ken Bedingfield, President, Aerojet Rocketdyne, L3Harris Technologies, Inc. (NYSE:LHX) stated the following on the award:
“Javelin provides a key capability for the United States, allies and partners. Our ongoing investments in modernized solid rocket motor manufacturing will allow us to increase production capacity for Javelin by incorporating the latest advancements in automation into the motor casting and installation processes.”
The company has been increasing solid rocket motor production through several programs as part of internal investments in manufacturing and a cooperative agreement with the Department of War.
L3Harris Technologies, Inc. (NYSE:LHX) is also incorporating a completely digital workflow for Javelin production, allowing for real-time tracking of data to enhance quality monitoring capabilities and provide greater control over production speed.
11. Woodward, Inc. (NASDAQ:WWD)
Number of Hedge Fund Holders: 54
Woodward, Inc. (NASDAQ:WWD) is among the 12 Best Defense Stocks to Buy Right Now. On September 16, the company announced plans to build a 300,000-square-foot precision manufacturing facility in South Carolina’s Spartanburg County.
The site will focus on the production of aircraft spoiler actuation systems. It is expected to become operational in 2027, with the company planning to progressively scale production and hiring in the years to follow to meet market demand.
Servo-hydraulic actuation systems are critical components used in aircraft flight control. Initially, Woodward, Inc. (NASDAQ:WWD) will utilize most of the factory’s capacity to produce spoiler actuation for the Airbus A350, the company said in a press release.
Woodward, Inc. (NASDAQ:WWD) will invest nearly $200 million on the site’s development. The project is expected to create 275 high-quality jobs in engineering, manufacturing, and business operations, with the potential for major workforce expansion in the future.
The investment is supported by an incentive package from the State of South Carolina, Spartanburg County, and some local economic development organizations.
10. Howmet Aerospace Inc. (NYSE:HWM)
Number of Hedge Fund Holders: 57
Howmet Aerospace Inc. (NYSE:HWM) is among the 12 Best Defense Stocks to Buy Right Now. The company manufactures components for aircraft engines, fasteners, aluminum wheels for trucks, and titanium structures for aerospace and defense applications.
On July 31, the firm reported robust results for the second quarter of fiscal 2025, with revenue increasing 9% year-over-year to $2.05 billion, driven by growth in commercial aerospace, defense aerospace, industrial, and other markets. Net income stood at $407 million, improving from $266 million during the same period last year.
Howmet Aerospace Inc. (NYSE:HWM) also lifted its 2025 guidance for all metrics, buoyed by soaring demand for fasteners and engine components as global demand for air travel grows.
Moreover, supply chain challenges faced by several airlines have forced them to extend the lifespan of older aircraft, which is set to benefit the company. Macquarie Core Equity Fund shed light on this factor in its second quarter 2025 investor letter:
“Howmet Aerospace Inc. (NYSE:HWM) is a supplier of critical engine and airframe components to the commercial and military aerospace complex. The company continued to benefit from robust demand and extended backlogs for new aircraft. Given the difficulty Boeing and Airbus have had ramping production of newer aircraft, old aircraft are flying longer, which aids aftermarket parts suppliers including Howmet.”
Howmet’s share price has gained 74% year-to-date as of the close of business on September 19. Wall Street analysts have an average one-year price target of $204.83, representing a further 8% upside potential.
9. Curtiss-Wright Corporation (NYSE:CW)
Number of Hedge Fund Holders: 60
Curtiss-Wright Corporation (NYSE:CW) is among the 12 Best Defense Stocks to Buy Right Now. Earlier this month, the company announced a $200 million expansion of its 2025 share repurchase program. Moreover, the Board declared a quarterly dividend of $0.24 per share, to be paid on October 10 to all stockholders on record as of September 26.
The share repurchase program’s expansion is set to result in record annual share repurchases of over $450 million in the current fiscal year. Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation (NYSE:CW), was quoted as saying the following in a press release on September 10:
“We are pleased to announce this $200 million expansion of our 2025 repurchase program which reinforces our disciplined commitment to long-term value creation and is expected to drive record share repurchases this year. In addition, this new repurchase program reflects our Board’s continued confidence in Curtiss-Wright’s Pivot to Growth strategy, healthy balance sheet and long-term financial outlook.”
Curtiss-Wright Corporation (NYSE:CW) will repurchase additional shares worth $200 million immediately via a 10b5-1 program. It is also executing its existing $60 million repurchase program, initiated in January this year. The company will have remaining open repurchase authorization of $134 million after the completion of these programs.
8. General Dynamics Corporation (NYSE:GD)
Number of Hedge Fund Holders: 61
General Dynamics Corporation (NYSE:GD) is among the 12 Best Defense Stocks to Buy Right Now, based on hedge fund sentiment. It is a leading global aerospace and defense company, operating through its Aerospace, Marine Systems, Combat Systems, and Technologies segments.
According to Insider Monkey’s database for Q2 2025, 61 hedge funds held a stake in the company, up from 46 at the end of the first quarter.
The stock has returned 23% year-to-date as of the close of business on September 19, amid continued investor interest due to the company’s significance in the defense sector, strong financials, and a healthy backlog of orders.
General Dynamics Corporation (NYSE:GD) is also recognized for its solid dividend policy, as it has been growing its payouts for 28 successive years. You can read more on this in 15 Best Performing Dividend Stocks So Far in 2025.
Wall Street analysts also maintain a bullish outlook for General Dynamics Corporation (NYSE:GD), with a consensus Buy rating and an average share price upside potential of 5%.
7. Axon Enterprise, Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 62
Axon Enterprise, Inc. (NASDAQ:AXON) is among the 12 Best Defense Stocks to Buy Right Now. The company is in advanced talks to acquire emergency response startup, Prepared, for between $800 million to $900 million, The Information reported on September 17.
The New York-based startup, founded in 2019, was valued at $550 million in a financing round in May this year, according to PitchBook. Investors include First Round Capital, General Catalyst, and Andreessen Horowitz.
The firm generates little revenue. According to the report, it has told some shareholders that it anticipates driving around $2.5 million in monthly revenue by the end of this year. Spokespersons for Axon Enterprise, Inc. (NASDAQ:AXON) and Prepared did not return requests for a comment by The Information.
However, the potential sale shows how software firms are adding artificial intelligence to bolster their applications. Prepared’s product offerings include an AI tool that provides 911 real-time transcripts of calls, including translation of non-English speakers.
Axon Enterprise, Inc. (NASDAQ:AXON) manufactures weapons and technology for law enforcement agencies, the military, and civilian use. The company integrates cloud software solutions and hardware devices to help enable modern policing, defense, and security.
6. HEICO Corporation (NYSE:HEI)
Number of Hedge Fund Holders: 69
HEICO Corporation (NYSE:HEI) is among the 12 Best Defense Stocks to Buy Right Now. The company manufactures jet engines and aircraft parts. It also supports the government through activities such as reverse engineering, manufacturing aircraft engines and parts, and repair and maintenance services.
Wall Street analysts have a bullish outlook for the stock, with a consensus Buy rating and a one-year average price target of $349.47, representing a 10% upside potential from the share price as of the close of business on September 19.
On September 5, BofA hiked HEICO Corporation (NYSE:HEI)’s price target to $400 from $355, while maintaining a Buy rating for its shares. The analyst believes that elevated defense spending from America and its allies is creating opportunities for the company to continue benefiting and drive market share gains through lower pricing.
Earlier in the month, Barclays also raised the stock’s price target to $300 from $280 and reiterated an Equal-Weight rating for its shares. The analysts updated HEICO Corporation (NYSE:HEI)’s model following its third quarter fiscal 2025 earnings, in which the company reported a record net income of $177.3 million, up 30% year-over-year.
5. RTX Corporation (NYSE:RTX)
Number of Hedge Fund Holders: 71
RTX Corporation (NYSE:RTX) is among the 12 Best Defense Stocks to Buy Right Now. On September 16, the company announced that its Collins Aerospace business was awarded a NATO contract for its Electronic Warfare Planning and Battle Management (EWPBM).
The integrated software tool is designed to deliver a Recognized Electromagnetic Picture by combining data from operations, intelligence systems, an Electronic Order of Battle, and other sources, and detailing the function and location of the electronic devices. This comprehensive overview allows for planning, coordinating, and synchronizing electromagnetic warfare activities.
Ryan Bunge, VP and GM for Command, Control, Communications, Computers, Intelligence & Autonomy at RTX Corporation (NYSE:RTX)’s Collins Aerospace, stated the following on the contract award:
“We’re equipping commanders with a critical tool to visualize electronic warfare threats and automate the use of jammers and sensors. This system will enhance joint operations’ effectiveness, interoperability, scalability, and resilience.”
The EWPBM enhances battle management by incorporating situational awareness of the electromagnetic environment, which will aid commanders in challenging multi-domain warfare.
Moreover, RTX Corporation (NYSE:RTX) stated that Collins Aerospace will collaborate with NATO on the system’s testing and integration, which will further strengthen the military alliance’s electromagnetic warfare capabilities.
4. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 73
Lockheed Martin Corporation (NYSE:LMT) is among the 12 Best Defense Stocks to Buy Right Now. On September 16, the company announced that it was awarded a contract to implement software upgrades for South Korea’s F-16 Block 52 flight simulators.
The upgrades will advance mission capabilities of the country’s F-16V aircraft, by providing high-fidelity simulated environments for pilots to train. This will be a six-year contract, under which Lockheed Martin Corporation (NYSE:LMT) will modernize nine F-16 flight simulators to the F-16V configuration. The company will also provide continued support for contractor logistics services.
Todd Morar, VP of Air and Commercial Solutions at Lockheed Martin Corporation (NYSE:LMT) stated the following on the contract:
“Maximum accuracy and realism in ground-based flight training is foundational to pilot safety and mission readiness. As the manufacturer of all F-16 variants, Lockheed Martin uses the design and software data of the actual aircraft to deliver ground-based training experiences that are nearly identical to those in flight, while maintaining concurrency with the aircraft as technology evolves.”
The F-16V configuration offers advanced avionics, a modernized cockpit, advanced weapons, and an Active Electronically Scanned Array radar, among other advancements, making them similar to the new F-16 Block 70 aircraft.
Since 2001, 16 allied nations’ aviators have trained with LMT’s F-16 training systems.
3. TransDigm Group Incorporated (NYSE:TDG)
Number of Hedge Fund Holders: 79
TransDigm Group Incorporated (NYSE:TDG) is among the 12 Best Defense Stocks to Buy Right Now. On September 17, Jefferies analyst Sheila Kahyaoglu lowered the stock’s price target to $1,490 from $1,650, while maintaining a Buy rating for its shares. The firm also removed the company from its Franchise Picks list.
Kahyaoglu told investors in a research note that the company’s EBITDA multiple had declined 4% since the end of 2023, amid lower after-market volumes. However, the analyst highlighted that TransDigm Group Incorporated (NYSE:TDG) has $6 billion of capacity for acquisitions, which could be 3% accretive to earnings at a 14x transaction multiple.
Overall, Wall Street analysts maintain a positive outlook for the stock, with a consensus Buy rating and a one-year average price target of $1,596.56, representing an upside potential of 25% from the closing price of September 18.
TransDigm Group Incorporated (NYSE:TDG) manufactures engineered aircraft components for commercial and military aircraft.
2. GE Aerospace (NYSE:GE)
Number of Hedge Fund Holders: 100
GE Aerospace (NYSE:GE) is among the 12 Best Defense Stocks to Buy Right Now. On September 18, the company’s Board of Directors authorized a quarterly dividend of $0.36 per share on common stock.
The dividend will be paid on October 27, 2025, to all shareholders on record as of September 29, 2025, which will also be the ex-dividend date.
In other news, on September 19, GE Aerospace (NYSE:GE) reached a new five-year labor agreement with over 600 striking UAW workers at its Ohio and Kentucky distribution facilities.
According to the tentative deal outlined by the union, workers will receive a 3-5% base wage increase through 2029 and approximately $3,500 in cash per employee to help offset soaring healthcare costs.
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.
1. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 101
The Boeing Company (NYSE:BA) is among the 12 Best Defense Stocks to Buy Right Now. Families of four victims from June’s Air India crash have sued the aircraft manufacturer over the disaster that killed 260 people. Aerospace firm Honeywell is also a subject of the lawsuit.
The victims’ families have blamed the two companies for negligence and a faulty fuel cutoff switch. The flight en route to London had crashed shortly after takeoff from Ahmedabad on June 12.
The plaintiffs, in a complaint filed at the Delaware Superior Court on September 16, have said that the locking mechanism for the switch on The Boeing Company (NYSE:BA)’s 787-8 Dreamliner could be turned off inadvertently, resulting in a loss of fuel supply and thrust required for takeoff.
They argued that the two companies were well aware of the risk, given that Honeywell manufactured and installed the switch, and that the FAA warned in 2018 about the disengaged locking mechanisms on several aircraft of The Boeing Company (NYSE:BA).
Below is an excerpt from the complaint:
“Boeing effectively guaranteed that normal cockpit activity could result in inadvertent fuel cutoff. What did Honeywell and Boeing do to prevent the inevitable catastrophe? Nothing.”
Boeing declined to comment on the lawsuit on Wednesday, while Honeywell also did not immediately respond to requests for comment.
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