This article looks at the 7 Best Mid-Cap Defense Stocks to Invest In.
Shares of several leading defense contractors fell this week after President Trump’s announcement of a two-week ceasefire with Iran following a request from Pakistan. The United States has agreed to halt the bombings, subject to Tehran reopening the Hormuz Strait.
While the ceasefire appears fragile and hostilities could resume in the Middle East, defense stocks are unlikely to see a surge, according to American financial magazine Barron’s.
The iShares U.S. Aerospace & Defense ETF has gained 6% year-to-date, outpacing the S&P 500’s 1% dip, but has slumped nearly 8% since the start of the Iran war.
Despite the U.S. government’s efforts to increase production of weapons, defense stocks have not gained as much as they were expected to. This is due to the markets being forward-looking, said Barron’s. While an escalation with Iran has been looming for the past year, it is not quite clear what the endgame would look like.
Experts believe that, given the elevated valuations of defense stocks, only increased military expenditure would drive these stocks further up.
With that said, let’s now shift focus and see some of the best mid-cap defense stocks to invest in.
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Methodology
For this article, we screened for mid-cap stocks that are pure-play defense companies or have significant exposure to the defense sector, using their market caps as of the close on April 10. We then shortlisted the top 7 companies that had the highest number of hedge fund investors having a stake in them, based on Insider Monkey’s database of prominent hedge funds as of Q4 2025. Finally, we ranked them in ascending order based on the number of hedge funds holding positions. When two or more stocks were tied in hedge fund sentiment, we used market cap as a tiebreaker.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
7 Best Mid-Cap Defense Stocks to Invest In:
7. Moog Inc. (NYSE:MOG-A)
Number of Hedge Fund Holders: 32
Moog Inc. (NYSE:MOG-A) is among the 7 Best Mid-Cap Defense Stocks to Invest In. On April 1, the company outlined its role in the successful launch of NASA’s Artemis II mission through its actuation and motion control technologies.
According to the press release, the technological provisions included the thrust vector control systems to steer the Space Launch System during ascent; actuators for the launch abort systems; fluid control and actuation technologies required for propulsion, stability, and power distribution; and lastly, the mobile launch pad actuators.
Nicole Wodka-Cook, general manager at Moog Inc. (NYSE:MOG-A) was quoted as saying the following on the launch:
“This successful launch underscores the reliability and precision our teams bring to every system, whether we’re protecting astronauts, guiding the rocket, or supporting mission-critical ground operations.”
In other news, on March 25, the company presented its new innovations at the SATELLITE 2026 Conference in Washington, D.C., and highlighted gains made in high delta-V propulsion systems, next-gen space computing, scalable satellite buses, and propulsion technologies for national security space missions.
Moog Inc. (NYSE:MOG-A) designs, manufactures, and integrates precision motions and fluid controls and control systems for manufacturers and end users in the aerospace, defense, and industrial markets. The stock has had robust returns in 2026, gaining 25% YTD as of the close on April 10.
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