Our list today highlights the Top 10 Stocks to Buy according to Goldman Sachs’ Portfolio.
Goldman Sachs Group, among the world’s largest investment banks and financial services companies, utilizes fundamental and quantitative approaches to equity investing. Its Assets Under Supervision, which includes assets under management (AUM) and other client assets, stands at over $720 billion. The firm focuses on long-term investments in quality companies with shareholder-oriented management teams and attractive valuations.
Goldman has notable exposure to the aerospace and defense sector, which has experienced substantial upheaval in recent years due to several geopolitical tensions around the world. At the same time, these conflicts have pushed countries to expand their defense budgets, which underpins the long-term demand for companies in the sector.
A recent example came in early October, when the Government of Canada announced the creation of the Defence Investment Agency (DIA). According to official statements, the DIA is expected to accelerate procurement and investment in advanced defense systems. It should be noted that this development was in line with the June 2025 pledge (Defence Investment Pledge), under which Canada and its NATO allies committed to allocating 5% of annual GDP to build and strengthen national and collective security. Prime Minister Mark Carney noted that “the world is increasingly dangerous and divided”, which emphasized the need for greater defense readiness.
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However, investor attention is currently fixed on the U.S. government shutdown, which has now extended beyond 16 days, delaying key budget decisions. Reuters reported on October 16 that the Senate failed to clear the defense funding bill, including a military pay raise, due to disagreement over other funding programs.
Another development that raised investor concerns was U.S. Treasury Secretary Scott Bessent’s remarks on defense companies’ priorities. In an interview at CNBC’s “Invest in America Forum” in Washington, D.C., on October 15, Mr. Bessent said that these companies are lagging on deliveries, and they may be asked to prioritize research spending over buybacks.
With these developments shaping sentiment in the defense sector, let’s explore our list of top 10 stocks to buy according to Goldman Sachs’ portfolio.
Photo by Somchai Kongkamsri from Pexels
Our Methodology
To identify the best defense stocks in Goldman Sachs’ portfolio, we began by reviewing the firm’s Q2 2025 13F filings using Insider Monkey’s 13F database. From these holdings, we focused on defense companies that had the highest value allocation in the portfolio. We then analyzed hedge fund ownership using Q2 2025 data from Insider Monkey’s database and narrowed the list to the 10 most widely held names. Finally, the stocks are ranked in ascending order based on the number of hedge funds holding a position.
We have added the performance of each stock from the end of Q2 2025 to October 16, providing readers with insight into how Goldman Sachs’ defense portfolio picks have played out so far.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Note: All pricing data is as of market close on October 16, 2025.
Goldman Sachs Defense Stocks: Top 10 Stocks to Buy
10. Northrop Grumman Corp. (NYSE:NOC)
Value in Goldman Sachs’ Portfolio: $384 Million
Number of Hedge Fund Holders: 42
Share Price Return Between July 1 and October 16: 20%
Northrop Grumman Corp. (NYSE:NOC) is one of the best defense stocks in Goldman Sachs’ portfolio. It is a global aerospace and defense technology company that is engaged in the design, development, production, integration, and maintenance of advanced systems across aeronautics, space, defense electronics, and mission solutions.
As a leading U.S. defense contractor, Northrop Grumman Corp. (NYSE:NOC) has a strong portfolio in next-generation defense and space platforms, positioning it as a long-term beneficiary of rising defense budgets.
On October 15, Morgan Stanley’s Aerospace & Defense analyst Kristine Liwag reiterated her Overweight rating for Northrop Grumman Corp. (NYSE:NOC) and raised her price target from $625 to $720. In her note, she gave out a very interesting take on the prime contractors, with NOC remaining one of her top picks. Liwag notes that the ongoing US shutdown and delays in budget decisions will make it difficult for companies to precisely factor in the potential impact into their 2026 guidance. However, she suggested that weaker guidance from these companies presents an opportunity to buy, as there is potential for upward revisions once visibility increases regarding funding decisions.
Meanwhile, the defense space has seen several favorable macro developments. On October 2, the Canadian Government announced the creation of the Defence Investment Agency (DIA), which was seen as a positive development towards demand for defense contractors/ suppliers. As another significant event, on September 29, the Pentagon had reportedly asked its missile suppliers to double or even quadruple production to replenish the low stockpile of weapons, according to The Wall Street Journal. The news agency, which quoted people familiar with the matter, said that this step was taken to prepare for a potential future conflict with China.
With increasing armed conflicts, countries are increasing their budgets on deterrence and modernization of their defense capabilities. This expansion in both domestic and international investments in defense infrastructure and technology is expected to support growth for Northrop Grumman Corp. (NYSE:NOC).
9. Booz Allen Hamilton Holding Corp. (NYSE:BAH)
Value in Goldman Sachs’ Portfolio: $154 Million
Number of Hedge Fund Holders: 47
Share Price Return Between July 1 and October 16: -7%
Booz Allen Hamilton Holding Corp. (NYSE:BAH) is one of the best defense stocks in Goldman Sachs’ portfolio. This advanced technology company generates approximately 50% of its revenue from defense customers, including all branches of the U.S. military, the Office of the Secretary of Defense, NASA, and the Joint Staff.
On October 16, William Blair analyst Louie DiPalma reiterated his Buy rating on Booz Allen Hamilton Holding Corp. (NYSE:BAH) without assigning a price target. The analyst focused on two broad factors to underpin the company’s position within the US defense technology ecosystem. Firstly, he pointed to a recent high-profile White House dinner where the company participated along with the leading technology firms. According to the analyst, this shows that the company is no longer just a consulting firm, but it has grown its influence as a key player in advanced defense systems and software.
Secondly, he found the valuation for Booz Allen Hamilton Holding Corp. (NYSE:BAH) attractive. While the valuations of Booz Allen’s defense peers have risen substantially, the company’s valuation is currently at a five-year low, presenting an investment opportunity, according to the analyst.
Booz Allen Hamilton Holding Corp. (NYSE:BAH) provides solutions in cybersecurity, artificial intelligence, analytics, digital engineering, and mission-critical IT services for the U.S. government. The company is one of the largest contractors to the Department of Defense, intelligence agencies, and civilian federal sectors.
8. CACI International Inc. (NYSE:CACI)
Value in Goldman Sachs’ Portfolio: $64 Million
Number of Hedge Fund Holders: 48
Share Price Return Between July 1 and October 16: 9%
CACI International Inc. (NYSE:CACI) is one of the best defense stocks in Goldman Sachs’ portfolio. On October 10, the company announced it had received a 5-year contract from the US Department of the Air Force, valued at over $73 million. As per the contract, CACI will continue the modernization of the department’s Integrated Broadcast Services–Network Services (IBS-NS) platform. The company’s work supports the secure transmission of time-sensitive tactical and strategic intelligence across air, ground, and space domains.
Under the contract, CACI International Inc. (NYSE:CACI) will utilize its software-defined network technology to strengthen the IBS-NS platform, which currently supports more than 500 data exchange interfaces and is considered a critical component of U.S. situational awareness infrastructure.
On the critical nature of the contract, John Mengucci, CACI President and Chief Executive Officer, stated:
“At the tactical edge, warfighters need near-real-time, properly vetted military intelligence to improve situational awareness, make critical decisions, and ensure successful mission outcomes. Based on our intrinsic experience and knowledge, we are uniquely qualified to deploy software-defined solutions that broaden network capabilities for the Air Force, enabling them to simultaneously consume information at various levels of classification while acting with the urgency and precision necessary to bolster national security and maintain superiority.”
CACI International Inc. (NYSE:CACI) provides enterprise IT, data analytics, cyber technology, and intelligence solutions to government agencies. These solutions assist their customers in both offensive and defensive operations, as well as in the defense of critical infrastructure.
7. Leidos Holdings Inc. (NYSE:LDOS)
Value in Goldman Sachs’ Portfolio: $176 Million
Number of Hedge Fund Holders: 48
Share Price Return Between July 1 and October 16: 17%
Leidos Holdings Inc. (NYSE:LDOS) is one of the best defense stocks in Goldman Sachs’ portfolio. The company’s revenue exposure is diversified across several end-markets, and it benefits from steady demand for systems solutions, IT, cyber, and logistics support from both defense and civil agencies.
On October 8, Leidos Holdings Inc. (NYSE:LDOS) announced the expansion of its two-decade-long partnership with Kazaeronavigatsia, the country’s air navigation service provider, through a long-term contract to modernize the nation’s air traffic control infrastructure. This contract includes work at four control centers and 21 towers across the country. While the company didn’t disclose the monetary value of the contract, it is well-positioned to benefit from the significant growth projected for air traffic volume in Kazakhstan in the coming years.
Separately, on September 30, 2025, Truist Securities analyst Tobey Sommer raised the price target on Leidos Holdings Inc. (NYSE:LDOS) to $195 from $188 and reiterated a Buy rating ahead of the company’s third-quarter results on November 4. As part of this, Truist also previewed the Q3 results for other Government Services companies.
The analyst noted that this group of companies may face near-term volatility due to weaker book-to-bill ratios (B2Bs), a potential government shutdown (which has already occurred as of the time of writing this article), and delays in reaching a resolution on federal budgets. However, he believes these factors could create a good buying opportunity for long-term investors.
Sommer expects order growth and new contract awards to increase in the first half of 2026, with stronger organic growth anticipated between late 2026 and early 2027. Despite short-term political uncertainty, analysts at Truist remain positive on the medium-term outlook, citing an improving funding environment as opportunities under the Overseas Base Budget and Budget Activity (OBBBA) are rolled out.
Leidos Holdings Inc. (NYSE:LDOS) is a U.S. government technology and defense contractor. The company focuses on digital modernization, cybersecurity, logistics, and defense and mission systems for federal agencies, the military, and intelligence clients.
6. L3Harris Technologies Inc. (NYSE:LHX)
Value in Goldman Sachs’ Portfolio: $411 Million
Number of Hedge Fund Holders: 53
Share Price Return Between July 1 and October 16: 13%
L3Harris Technologies Inc. (NYSE:LHX) is one of the best defense stocks in Goldman Sachs’ portfolio. On October 15, Truist Securities raised its price target on L3Harris Technologies (NYSE:LHX) to $353 from $302, while maintaining a Buy rating ahead of the sector’s third-quarter earnings season. The firm notes that the demand environment and broader sentiment for the aircraft OEM production are improving.
With that, Truist highlighted its preference for suppliers that have higher exposure to the Boeing 737 MAX program. Having said that, the firm believes the shutdown is weighing on the outlook for Q4 and FY26.
Separately, on September 29, L3Harris Technologies Inc. (NYSE:LHX) secured a U.S. defense contract valued at up to $939.6 million, which covers projects for both the US Navy and Air Force. This contract win supports the company’s position as an important supplier of advanced military communications systems.
The contract is an indefinite-delivery/indefinite-quantity (IDIQ) contract, awarded by the Naval Information Warfare Systems Command. It covers the development, production, sustainment, and systems engineering of the Multifunctional Information Distribution System (MIDS) Weapon Data Link Small-Form-Factor (SFF) Radio Family 2.
Under this program, the procurement process will be streamlined by combining purchases across both services. It starts with $42.1 million in initial funding, which will be divided between Navy weapons procurement ($22.3 million) and Air Force missile procurement ($19.9 million).
According to the official notice, work on the project will be evenly divided between two facilities, with completion expected in September 2030. Moreover, the official notice notes that the program was competitively awarded as the best of the two proposals received.
L3Harris Technologies Inc. (NYSE:LHX) is a global aerospace and defense technology company. It specializes in communication systems, electronic warfare, and integrated mission solutions for air, land, sea, and space operations.
5. General Dynamics Corp. (NYSE:GD)
Value in Goldman Sachs’ Portfolio: $432 Million
Number of Hedge Fund Holders: 61
Share Price Return Between July 1 and October 16: 13%
General Dynamics Corp. (NYSE:GD) is one of the best defense stocks in Goldman Sachs’ portfolio. The company is a prominent player in the global aerospace and defense space. It provides products and services in business aviation, shipbuilding and repair, land combat vehicles, weapons systems and ordnance, as well as technology products and services.
On October 8, Scott Deuschle, an analyst from Deutsche Bank, published his Q3 earnings preview for the bank’s coverage group on aerospace and defense, a space in which the bank continues to hold a bullish stance. As part of the review, Deuschle raised his price target on General Dynamics Corp. (NYSE:GD) from $360 to $400, implying an over 15% potential upside.
On the operations front, the company remains well-positioned in the industry. On October 2, the company’s business unit, General Dynamics Information Technology (GDIT), reported that it had received the Enterprise Mission Information Technology Services 2 (EMITS 2) task order worth around $1.25 billion.
As part of this order, GDIT will continue to provide scalable and cutting-edge IT services to U.S. Army Europe and Africa and their other partners in the area. This order includes a five-month base period for transition and seven option years, and GDIT will deliver enterprise IT, communications, and mission command support services.
General Dynamics Corp. (NYSE:GD) is a global aerospace and defense company that specializes in high-end design, engineering, and manufacturing. Its broad portfolio includes products and services in business aviation, ship construction/repair, land combat vehicles, weapons systems, munitions, and technology.
4. RTX Corp. (NYSE:RTX)
Value in Goldman Sachs’ Portfolio: $1.3 Billion
Number of Hedge Fund Holders: 71
Share Price Return Between July 1 and October 16: 8%
RTX Corp. (NYSE:RTX) is one of the best defense stocks in Goldman Sachs’ portfolio. On October 15, Raytheon, a business unit of RTX, announced that it is undertaking a $53 million expansion of its 23,000-square-foot Andover, Massachusetts-based facility for the production of Lower Tier Air and Missile Defense Sensor (LTAMDS). LTAMDS is a radar system used to neutralize advanced threats, including hypersonic weapons. The company is ramping up its capabilities at this facility so that it can accelerate the delivery of these systems.
Tom Laliberty, president of Land and Air Defense Systems at Raytheon, considers this investment necessary for providing better services to its customers and stated:
“This vital investment will significantly bolster our ability to meet the growing global demand for LTAMDS. The expansion will accelerate delivery of this critical radar to U.S. and international customers, ensuring they are equipped with the most advanced defense technology available.”
RTX Corp. (NYSE:RTX) is one of the world’s largest aerospace and defense companies and has three main business units. Raytheon, one of them, designs, develops, and provides advanced capabilities, including those in integrated air and missile defense, smart weapons, missiles, advanced sensors and radars, interceptors, space-based systems, and hypersonics. The other two units are Collins Aerospace and Pratt & Whitney, the latter of which is among the world’s leading suppliers of aircraft engines.
3. Lockheed Martin Corp. (NYSE:LMT)
Value in Goldman Sachs’ Portfolio: $546 Million
Number of Hedge Fund Holders: 73
Share Price Return Between July 1 and October 16: 7%
Lockheed Martin Corp. (NYSE:LMT) is one of the best defense stocks in Goldman Sachs’ portfolio. As part of his October 15 Q3 preview for the aerospace and defense sector, Truist Securities analyst Michael Ciarmoli raised his price for the stock from $440 to $500. But the analyst maintained a Hold rating, despite his view of an improved sentiment towards aircraft OEM production and better aftermarket demand trends.
The potential impact of the government shutdown on the upcoming guidance releases is one of the reasons for the analyst’s cautious stance. In context, Ciarmoli had downgraded the stock to a Hold from Buy in late July 2025, as the analyst had expected that one-off charges in the next few quarters might impact cash flows. The one-off or unexpected charges were attributed to “kitchen-sinking” or a clean-up by the new management.
In an earlier report on October 7, RBC analyst Kenneth Herbert also reiterated a cautious stance with a Hold rating, but raised the price target from $440 to $525. The analyst believes that the company should be able to achieve its free cash flow target for the year, supported by a $24 billion contract that it signed for 296 jets at the end of Q3.
Separately, Lockheed Martin Corp. (NYSE:LMT) also increased its share repurchase program authorization by $2 billion on October 9. With this increase, the total authorization for future repurchases now stands at $9.1 billion. Additionally, the company raised its dividend for Q4 to $3.45, up by 5% over the last quarter.
Lockheed Martin Corp. (NYSE:LMT) is a global aerospace and defense company that provides advanced technology systems, products, and services. It operates through segments including Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. It’s most well-known for the F-35 fighter jet and missile defense systems.
2. TransDigm Group Inc. (NYSE:TDG)
Value in Goldman Sachs’ Portfolio: $454 Million
Number of Hedge Fund Holders: 79
Share Price Return Between July 1 and October 16: -18%
TransDigm Group Inc. (NYSE:TDG) is one of the best defense stocks in Goldman Sachs’ portfolio. During the last two weeks, the company has seen its price target lowered by multiple analysts, although these analysts kept their ratings intact.
On October 15, analysts from both Truist Securities and Morgan Stanley reiterated their Buy ratings. However, Michael Ciarmoli, the analyst from Truist, lowered the price target on TransDigm Group Inc. (NYSE:TDG) from $1,730 to $1,647.
On the other hand, Morgan Stanley analyst Kristine Liwag decreased her price target from $1,750 to $1,600. Despite the government shutdown, Liwag holds a relatively more positive view on the defense operators. She suggests that any decline in the share prices due to a softer outlook for the next quarter or year should be used as a buying opportunity.
Among the Hold or Neutral-rated analysts, Deutsche Bank lowered the price target on the stock on October 8 from $1,490 to $1,370, as part of their Q3 earnings preview for the aerospace and defense group. A day earlier, Charles Minervino from Susquehanna lowered his price target from $1,500 to $1,450. While Minervino remains Neutral on the stock, he otherwise expects strong momentum in the defense sector. They also expect spending to grow by nearly 5% annually over the next few years, supported by rising geopolitical tensions, military modernization programs, and inventory replenishment efforts worldwide.
TransDigm Group Inc. (NYSE:TDG) is a global designer, producer, and supplier of highly engineered aircraft components. These components are used in nearly all commercial and military aircraft worldwide.
1. The Boeing Company (NYSE:BA)
Value in Goldman Sachs’ Portfolio: $621 Million
Number of Hedge Fund Holders: 101
Share Price Return Between July 1 and October 16: 1%
The Boeing Company (NYSE:BA) is one of the best defense stocks in Goldman Sachs’ portfolio. On Saturday, October 18, Bloomberg reported that Boeing has received approval from the Federal Aviation Administration (FAA) to increase production of its 737 aircraft to 42 jets per month.
The report quoted people familiar with the matter as a source, and the company’s management has not confirmed such development so far. The Bloomberg report notes that the production increase is expected to improve cash flow, reduce debt, and help the company compete more effectively with Airbus. So, if this development materializes, it should be a substantial positive for the company.
It must be remembered that the FAA had previously capped production at 38 jets per month after a door plug incident on a 737 Max 9 plane in January 2024 raised safety concerns. Since then, the company’s production facilities have been subject to scrutiny and reviews, and the company has implemented safety and quality improvement plans.
Earlier on October 14, Bloomberg had reported that The Boeing Company (NYSE:BA) had delivered 55 jets in September, including 41 of its 737 aircraft. Moreover, the company had also hinted to its suppliers of a potential production increase of the 737s as early as this month.
The Boeing Company (NYSE:BA) is one of the world’s largest aerospace and defense manufacturers. The company produces commercial airplanes, military aircraft, satellites, and space systems.
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