The best defense stocks are a compelling opportunity while we wait for world peace. NATO defense budgets have been pushed higher than we’ve seen since the Cold War, with the U.S. alone proposing a $1.5 trillion defense budget for FY2027.

So, what companies are positioned to capitalize on the worldwide tension we’re all so anxious about right now? We’ve handpicked 6 stocks that we think could be a worthy addition to your portfolio. Whether you’re looking for a long-term buy-and-hold play or something with a little more volatility that you can swing trade, these are the best defense stocks in 2026.

Quick Look at the Best Defense Stocks (2026)

  • Axon Enterprise (AXON): ~$598. Public safety tech and AI. Q2 revenue up 35% YoY.
  • Lockheed Martin (LMT): ~$564. Largest defense contractor in the world with a $230B record backlog.
  • Howmet Aerospace (HWM): ~$265. Jet engine parts specialist. EPS up 46% YoY.
  • RTX Corporation (RTX): ~$212. Missiles, radars, Pratt & Whitney engines. $289B backlog.
  • General Dynamics (GD): ~$384. Submarines, tanks, Gulfstream jets. Backlog up 32% YoY.
  • Northrop Grumman (NOC): ~$549. B-21 stealth bomber, Sentinel ICBM. $105B backlog.

What Are the Best Defense Stocks to Buy Now?

We chose stocks that are not only trending in the right direction as far as their tickers are concerned, but also reported growth in Q2 2026 – meaning the companies themselves are on the right path. Many of them have record (or at least near-record) backlogs, too.

Keep in mind that stocks move fast – which is why it’s worth having a tool like the VectorVest stock advisory in your arsenal so you can get the most up-to-date insights. Certain subscriptions give you the same real-time data that institutional investors have used to gain an unfair advantage for decades.

In the meantime, these are the 6 defense stocks we’re keeping on our watchlist.

Axon Enterprise (AXON)

What we like about Axon is that it’s not just a company that benefits from overseas conflict. This company builds both the hardware and software our law enforcement agencies rely on today – TASERs, body cameras, and drones.

Its AI platform saw a 700% spike in revenue during the first quarter, and second-quarter revenue hit $904 million. That was the 10th consecutive quarter where Axon posted 30%+ growth. You’d think it’ll slow down eventually…but it just hasn’t.

The company isn’t expecting it to stop anytime soon, either. Full-year guidance calls for 32-34% revenue growth.  The $14.3 billion backlog is near an all-time high.

In April of this year, AXON hit a low point in its trajectory over the last 2 years. It has rebounded nicely since then, and looks as if it could break through to a new all-time high in the near future. Definitely a defense stock to keep an eye on.

Lockheed Martin (LMT)

This is the largest defense contractor on the planet. It’s best known for its F-35 program, but Lockheed Martin is actually quite diversified – which is part of what earned the company a place on our list of the best defense stocks in 2026.

Q2 revenue was up 11% to $20.1 billion. Meanwhile, free cash flow swung from negative this time last year to $2.9 billion today. We’re impressed with how Lockheed Martin has turned its books around in such a short span.

The company has a $230 billion backlog and a 3.2x book-to-bill ratio. It pays a dividend, too – a 2.34% dividend yield, supported by 24 consecutive years of increases. Lockheed Martin raised its full-year EPS guidance to $29.95-$30.65.

This optimism is a big part of what pushed LMT to an all-time high of $672 earlier this year. The stock has cooled off since then (down to around $565 per share). But it’s proven it can climb higher at the drop of a hat.

Howmet Aerospace (HWM)

Howmet builds the precision engine parts and fasteners that go into essentially every major military and commercial aircraft. Boring, maybe, but the bottom line is all that matters. Adjusted EPS was up 46% in Q2, as revenue grew 24% to $2.55 billion.

Defense revenue is growing on F-35 engine spares and legacy fighter aftermarket demand. Howmet Aerospace raised its full-year revenue guidance to $10.05 billion and is expecting to see free cash flow come in at $1.9 billion.

The stock itself has outpaced the entire aerospace and defense sector over the past year – up nearly 56% YTD. Zoom out and you’ll see HWM has been slowly but surely climbing higher since it went public in 2020. Hard to bet against this type of graph.

RTX Corporation (RTX)

RTX is made up of three main business units:

  • Raytheon: Missile and radar business
  • Pratt & Whitney: Jet engines
  • Collins Aerospace: Avionics

The parent company is thriving, as are each of the individual units. Q2 adjusted sales came in at $24.7 billion, which was a 16% organic increase. A lot of that was on the heels of higher Patriot and NASAMS missile system demand, prompted by NATO allies ramping up their defense budgets.

RTX Corporation has the biggest backlog of any company on this list at $289 billion. Other highlights from the most recent earnings report included $2.9 billion free cash flow, a 2.42x book-to-bill ratio, and increased full-year EPS guidance to $7.10-$7.25. This company also pays a dividend (1.39% yield). The stock is up nearly 25% YTD.

General Dynamics Corp. (GD)

General Dynamics owns the Virginia-class submarine program. It’s a pivotal part of the AUKUS security pact and the Indo-Pacific naval buildout. So it should come as no surprise GD is one of the best defense stocks to buy now.

Q2 revenue grew 8.1% to $14.1 billion, which pushes EPS up 13.4% ($4.24). General Dynamics has a solid $136.5 billion backlog – a 32% YoY jump. It has a 1.8% dividend yield, and full-year EPS guidance currently sits at $16.80-$16.90.

The company is well diversified with a recent surge in European armored vehicle orders and Gulfstream business jet deliveries, too. GD is up almost 37% this year and shows no signs of slowing down soon.

Northrop Grumman (NOC)

Northrop Grumman owns two of the longest-standing programs in the defense industrial base: the B-21 Raider stealth bomber and the Sentinel ICBM. There are multi-decade contracts in place for each, so the company is positioned comfortably for the foreseeable future.

Q2 revenue was up 5% to $10.9 billion, with an adjusted EPS of $7.68 surpassing the consensus by 13%. The company has a 1.8% dividend yield, too. Its new full-year EPS guidance is between $28.60-$29.10.

This is the only stock we’ve covered that has been beaten down on the market over the past year (longer, in fact). NOC recovered some losses early on in the year but free-fell from March to June. This could be a good undervalued stock to keep an eye on.

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