In this article, we look at the defense stocks that are gaining this week.
European markets closed higher on Tuesday after Germany’s parliament voted in favor of a historic fiscal package, which includes reforms to long-standing debt policies to allow for higher defense spending. Investors across the world are also keeping a close eye on the situation in Ukraine, after Trump and Putin agreed to an immediate ceasefire for energy and infrastructure in the war that has been on since early 2022.
READ ALSO: 11 Best American Defense Stocks to Buy Now and 13 Best Defense Stocks to Buy According to Billionaires.
Trump’s pivot on Ukraine has fueled robust gains in defense stocks in Europe, where several armament contractors have seen double-digit growth this year, with some even reaching record highs, as European capitals faced pressures to raise defense spending. Korean defense companies have also benefited from the splurge, whereas American defense stocks have largely failed to capitalize on the global rally.
In contrast, America’s defense sector has struggled since Trump’s return to the White House due to mixed statements on future defense spending. The creation of DOGE has also reshaped investors’ views of the industry.
On March 3, the Pentagon, working with DOGE, found some $80 million in what it deemed wasteful funding, which included funds devoted to diversity, equity and inclusion programs, and climate change research. Press Secretary Sean Parnell made the following remarks in a statement posted on X while stating these actions were ‘just the start’:
“This stuff is not a core function of our military. This is a distraction. We believe that these initial findings will probably save $80 million in wasteful spending.”
Despite the downturn, Citi analyst, Jason Gursky, believes this is the right time to invest in American defense stocks. Here is what he wrote in a note to clients on March 5:
“We recognize the world order is evolving under the current President, perhaps to a multi-polar one in which three countries control spheres of influence over the Americas, Europe and Asia. However, we don’t view that world to be any less dangerous or one that decreases the need to acquire the tools of deterrence.”
Gursky further argued that as long as the global threat environment remains and the United States maintains its leadership role, regardless of whether it is as a sole superpower or as a power in a multi-polar world order, defense spending is expected to remain robust, which would benefit stocks in the sector.
In a recent positive development, shares of a major naval defense contractor have surged over the past two weeks after President Trump announced to resurrect America’s military and commercial shipbuilding industry, which he sees as vital to national security, given the strategic competition with China.
With that said, let’s now head over to the list of defense stocks that are gaining this week. Please note that the stocks listed are based on one week’s performance. Our analysis does not reflect the prospects of the company. Their share price could go high or low in the future, depending on the external market conditions, industry-specific challenges, and the company’s capabilities. Additional research and caution are advised before making investment decisions.
A military jetfighter against a deep blue sky with the sun behind it.
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week (March 10-17). From there, we picked the top 10 stocks with the highest percentage gains in share price during this period. All data is as of the close of business on Monday, March 17, 2025.
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).
10. The Boeing Company (NYSE:BA)
Weekly Gains: 9.25%
The Boeing Company (NYSE:BA) is a leading aerospace company that manufactures commercial airplanes, space systems, and defense equipment for customers in over 150 countries. It is among the defense stocks that are gaining this week.
While the company’s challenges have carried well into 2025 and were further aggravated by the recent tariffs, the stock received a boost last week after Citi reiterated its Buy rating for The Boeing Company (NYSE:BA) with a share price target of $210. The analyst believes the market is currently undervaluing the company’s long-term growth potential.
It is worth mentioning that the company has an order backlog of $521 billion, and analysts maintain a consensus Buy rating for the stock in anticipation of a recovery once the headwinds are over. The Boeing Company (NYSE:BA)’s shares have gained 9.25% over the past week.
9. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Weekly Gains: 9.29%
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative and affordable products and platforms for national security needs. The company is involved in various technological areas, such as unmanned systems, C5ISR, satellite communications, warfighter training, and combat systems.
It is among the defense stocks that are gaining this week, with returns of 9.29% during the period, amid recent high-value contract awards. On March 11, Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) secured a potential $50 million deal from the Naval Surface Warfare Center to design and manufacture short medium-range suborbital vehicles.
On March 17, Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) received another contract for the BQM-177A Subsonic Aerial Target System from the Naval Air Systems Command, with a potential value of up to $19.1 million.
Hedge Fund Resource Center