What makes defense stocks different from other sectors?

Defense stocks typically rely on government contracts, which often span multiple years and remain steady regardless of economic conditions. Unlike consumer-focused companies, defense contractors aren't as vulnerable to economic downturns, as national security spending tends to be prioritized even during budget constraints. This can make them potentially more resilient during recessions, though they might have different growth patterns compared to tech or consumer sectors.

Why do global tensions affect defense stock performance?

When international tensions rise, governments typically increase military spending to strengthen their defense capabilities. This directly benefits defense contractors who provide military equipment, technology, and services. For example, recent conflicts have prompted many nations to boost defense budgets, creating new contract opportunities for companies in this group. However, defense spending can also be influenced by political shifts and budget priorities, making it important to consider the broader geopolitical landscape.

What does "Market Cap" tell me about these defense companies?

Market capitalization (Market Cap) represents the total value of a company's outstanding shares, calculated by multiplying the share price by the number of shares. For defense companies, a larger market cap often indicates an established contractor with significant government relationships and diverse military programs. Smaller market cap companies might be specialized in emerging areas like cybersecurity or unmanned systems with potential for faster growth but possibly higher volatility.

How do I interpret "Consensus Recommendation" for these stocks?

Consensus Recommendation shows what financial analysts collectively think about a stock's future performance. It typically ranges from "Strong Buy" to "Strong Sell," with ratings like "Buy," "Hold," and "Sell" in between. For defense stocks, these recommendations consider factors like contract backlogs, new program wins, margin trends, and geopolitical factors. A "Buy" rating suggests analysts expect the stock to outperform, while a "Hold" might indicate stable performance with limited near-term upside.

What is cybersecurity's role in modern defense?

Cybersecurity has become a crucial component of national defense as warfare increasingly extends into the digital realm. Nations now face threats from cyberattacks that can target critical infrastructure, military systems, and sensitive government data. Companies specializing in cybersecurity develop technologies to protect against these threats, secure communications, and counter offensive cyber operations. As digital threats evolve, government spending on cybersecurity continues to grow, creating opportunities for companies that can deliver effective protection solutions.

15 handpicked stocks

Wartime Money

This carefully selected group of stocks focuses on the companies building modern defense systems, from aircraft to cybersecurity. These stocks are handpicked by our professional analysts based on their stable government contracts and potential to perform well during periods of global tension.

Han Tan | Market Analyst

Published on June 17

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Lockheed Martin Corporation

LMT

Current price

$499.91

A primary global defense contractor producing iconic military aircraft, missiles, and defense systems.

Northrop Grumman Corporation

NOC

Current price

$605.66

A leading defense technology company developing and producing military aircraft, deterrent systems, and space-based assets.

RTX Corp

RTX

Current price

$167.20

A key provider of advanced defense systems, including threat detection, tracking, and mitigation capabilities.

Boeing Company, The

Current price

$215.20

L3Harris Technologies Inc

LHX

Current price

$300.47

Kratos Defense & Security Solutions Inc

KTOS

Current price

$92.96

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About This Group of Stocks

Our Expert Thinking

These companies benefit from consistent government spending on national security, which tends to remain stable or increase during uncertain times. Defense and security contracts often span many years, providing predictable revenue streams that can weather economic downturns.

What You Need to Know

This group includes both established defense contractors with long-term government relationships and innovative specialists in emerging areas like cybersecurity and unmanned systems. Global tensions and expanding defense budgets worldwide serve as ongoing catalysts for growth.

Why These Stocks

We've selected industry leaders with significant government contracts, technological advantages, and strategic positioning in critical defense sectors. These companies provide essential national security tools and may offer portfolio diversification as they often move independently of broader market trends.

Group Performance Snapshot

15 of 15

Stocks Rated Buy by Analysts

15 of 15 assets in this group are rated Buy by professional analysts.

7.6% vs 4%

Group Growth vs Bank interest

This group averaged a 7.6% return last month, beating the typical 4% bank rate.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🛡️

Recession-Resistant Revenue

Defense contractors often thrive on long-term government contracts that continue regardless of economic conditions, potentially offering stability when other sectors struggle.

🌍

Global Tensions = Growth Catalyst

Rising international conflicts and security concerns are driving increased defense spending worldwide, creating a strong tailwind for companies in this group.

🔐

The Digital Battlefield Edge

Cybersecurity and digital defense stocks in this group are positioned at the frontier of modern warfare, where nations are rapidly expanding budgets to combat evolving threats.

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