We recently published a list of 13 Best Defense Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Lockheed Martin Corporation (NYSE:LMT) stands against other best defense stocks to buy according to billionaires.
Defense stocks wobbled over the past week after a contentious meeting at the Oval Office between President Trump and the visiting Ukrainian leader, Volodymyr Zelensky as investors hoped for the US-Ukraine minerals deal to be signed.
The sector has struggled since Trump’s return to the White House, amid mixed statements on military expenditure throughout his campaign and the early days of his second stint. Shares fell sharply on February 13 after the President hinted at cutting defense spending in the future. The creation of DOGE is also reshaping investors’ views of the industry.
READ ALSO: 10 Best Large Cap Defense Stocks to Buy Now and Why These 15 Defense Stocks Are Skyrocketing So Far In 2025.
In contrast, European defense stocks have rallied this year as governments faced pressures to increase military expenditure. Several stocks registered double-digit growth during the week of March 3, with some even reaching record highs. Investor sentiment picked up after the European Summit in London, where leaders from the EU and NATO met to express their support for Ukraine, following the recent Zelensky-Trump spat.
Washington has repeatedly called for European countries to spend more on defense, while stressing that the US could no longer foot the bill. EU leaders met in Brussels this Thursday to discuss the ‘ReArm Europe Plan’, which will allow the bloc to mobilize funds up to $860 million through bonds and relaxed rules on borrowing and spending.
European countries are also ramping up defense on an individual-level. A conservative victory in Germany, signaling the shift to the right in Berlin, is also adding to the momentum. According to a Reuters report, parties in talks to form the nation’s next government are already considering setting up a defense fund. Friedrich Merz, Germany’s next chancellor-in-waiting, has also vowed to relax the country’s strict borrowing rules.
Peter Schaffrik, Global Macro Strategist, at RBC Capital Markets stated the following on the ongoing situation:
It is an inflection point and Europe realises it needs to do the heavy lifting. The German elections have opened the door for more spending. The whole Zelensky-Trump meltdown has fast forwarded everything.
Methodology
For this article, we scanned Insider Monkey’s Q4 2024 proprietary database of billionaires’ stock holdings and identified defense stocks from the list. From there, we picked the top 13 stocks with the highest number of billionaires having a stake in them. Where two or more stocks were tied on billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker between them.
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).
A military aircraft in flight, showing the strength of the company’s combat & air mobility capability.
Lockheed Martin Corporation (NYSE:LMT)
Number of Billionaires: 13
Billionaire Holdings: $1,297,066,521
Lockheed Martin Corporation (NYSE:LMT) is one of the largest defense contractors in the world. The company specializes in the research, design, and development of advanced technology systems, products, and services. It is among the best defense stocks to buy according to billionaires.
The company has struggled over the last few months, with its share price taking a hit after the Q4 2024 earnings call on January 28. Lockheed Martin Corporation (NYSE:LMT) reported net sales of $18.6 billion for the quarter, down from $18.9 billion during the same period last year. Net income also slid 71% year-over-year, due to heavy losses associated with certain classified programs.
Lockheed Martin Corporation (NYSE:LMT) shared a cautious profit outlook for fiscal 2025, amid a delay in the rollout of upgrades for the F-35. The creation of DOGE has also generally soured investor sentiment in defense stocks.
While challenges remain, Lockheed Martin Corporation (NYSE:LMT) continues to be a partner of choice for most American allies. An increasing number of countries are looking to bolster their national defense, which is likely to help the stock recover once the current headwinds are over. Here is what Ariel Focus Fund stated regarding LMT in its Q4 2024 investor letter:
Shares of leading global defense contractor Lockheed Martin Corporation (NYSE:LMT) also traded lower returning some of its third quarter gains. Although earnings were solid, investor uncertainty tied to ongoing F-35 contract negotiations and software delays overshadowed the company’s robust order backlog and return of capital to shareholders via share repurchases and dividends. In our view, LMT continues to be well positioned in the defense sector.
According to a Reuters report on March 3, Lockheed Martin Corporation (NYSE:LMT) is planning to launch a new, low-cost cruise missile priced at $150,000 with a range of 800 kilometers, as the company works to counter Chinese ambitions in the Pacific by offering affordable weaponry.
Overall, LMT ranks 6th on our list of best defense stocks to buy according to billionaires. While we acknowledge the potential of LMT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.