5 Best Mid Cap Defense Stocks to Buy

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1. Karman Holdings Inc. (NYSE:KRMN)

Number of Hedge Fund Holders: 43

Karman Holdings Inc. (NYSE:KRMN) is among the 8 Best Mid Cap Defense Stocks to Buy. Institutional investors’ interest in the stock continues to grow. According to Insider Monkey’s database for Q1 2026, 43 hedge funds held a stake in the company, up from 36 at the end of the fourth quarter of 2025.

Wall Street also remains bullish with a Strong Buy rating and an average share price upside potential of 120%, as of the close of business on June 24.

Recent updates include RBC Capital, which reiterated its Outperform rating and $100 price target on June 1. The adjustment came after the company provided an operational data update tied to its second offering and stated that its active pipeline had tripled from the end of Q1 2025 to approximately $3 billion as of May 25, 2026.

Karman Holdings Inc. (NYSE:KRMN) further added that the pipeline could yield more than half of the opportunity in defense program contracts related to hypersonics & strategic missiles, tactical missiles & integrated defense, maritime security, and space and launch initiatives.

In other news, the company reported record quarterly revenue of $151.2 million in Q1, representing a 51% year-over-year increase. Earnings per fully diluted share came in at $0.06, improving from a loss of $0.04 during the same period last year. Backlog grew 61% from the prior year to finish the quarter at $1 billion.

Following the results, management raised its revenue outlook to $720 to $735 million and its adjusted EBITDA outlook to $208.5 to $219.5 million.

Karman Holdings Inc. (NYSE:KRMN) is engaged in the design and development of vital system solutions for missile defense, satellite, spacecraft, launch vehicles, hypersonic, and unmanned aerial systems.

While we acknowledge the potential of KRMN 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 KRMN and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 10 Stocks ChatGPT Predicts Could Make You Wealthy in 3 Years and 10 Best Aerospace and Defense Stocks to Buy According to Hedge Funds.

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