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What are the best defense technology stocks?

AlphaOS investment intelligence · Research and education only — not investment advice · Updated Sep 27, 2026

About defense

Direct answer

The leading defense technology stocks include Lockheed Martin (LMT), RTX Corporation (RTX), Northrop Grumman (NOC), L3Harris Technologies (LHX), and Palantir Technologies (PLTR), which collectively dominate U.S. and allied defense contracts across aerospace, missiles, cybersecurity, and AI-driven battlefield analytics. These companies benefit from sustained U.S. defense budgets exceeding $886 billion in FY2024, long-term government contracts providing revenue visibility, and accelerating NATO member spending commitments. Palantir and Booz Allen Hamilton (BAH) represent the software and data analytics layer of modern defense, while traditional primes like Lockheed and Northrop anchor hardware platforms including the F-35, B-21 Raider, and hypersonic programs.

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Key Takeaways

  • Lockheed Martin (LMT) is the world's largest defense contractor by revenue (~$67.6B in 2023), anchored by the F-35 program with a multi-decade production and sustainment runway
  • RTX Corporation (RTX) leads in missile defense and jet propulsion, with Raytheon Missiles & Defense seeing elevated demand driven by global conflicts and NATO restocking
  • Northrop Grumman (NOC) holds the exclusive B-21 Raider stealth bomber contract and is a primary ICBM modernization contractor under the Sentinel program
  • Palantir Technologies (PLTR) is the fastest-growing software name in defense, securing U.S. Army and NATO AI/ML contracts; U.S. government revenue grew 40% YoY in Q1 2024
  • Booz Allen Hamilton (BAH) generates roughly 97% of revenue from U.S. government clients and is deeply embedded in intelligence community IT and cyber programs
  • L3Harris Technologies (LHX) specializes in communication systems, electronic warfare, and ISR (intelligence, surveillance, reconnaissance), areas with rising global demand
  • European defense re-armament following Russia's Ukraine invasion has expanded the total addressable market for U.S. defense primes exporting platforms and munitions
  • Defense sector valuations are generally lower than broader tech, with many primes trading at 15-22x forward earnings, supported by long-cycle backlog visibility

Evidence & Analysis

  • U.S. FY2024 defense budget reached $886 billion, representing the largest nominal defense appropriation in American history
  • NATO members collectively pledged to increase defense spending to 2% of GDP; 23 of 32 members met the target in 2024, up from just 3 in 2014
  • Lockheed Martin's total backlog stood at approximately $160 billion as of Q4 2023, providing multi-year revenue visibility
  • Palantir won a $480 million U.S. Army contract for its AI-powered Maven Smart System in 2024, signaling the shift toward software-defined defense
  • RTX reported Raytheon segment backlog of over $67 billion in 2023, driven by surging demand for air defense systems including Patriot and NASAMS
  • The global defense market is projected to exceed $2.5 trillion by 2028, with technology-intensive segments (cyber, AI, space) growing faster than traditional hardware

Key Companies

LMT

Lockheed Martin Corporation

Largest global defense prime — F-35, missiles, space systems; ~$67.6B 2023 revenue

RTX

RTX Corporation

Missile defense and aerospace leader — Patriot, Stinger, Pratt & Whitney engines; strong munitions backlog

NOC

Northrop Grumman Corporation

Exclusive B-21 Raider contractor; space and nuclear deterrence programs; ~$39.3B 2023 revenue

PLTR

Palantir Technologies Inc.

AI and battlefield analytics platform; U.S. government revenue growing 40% YoY; Maven Smart System contract

BAH

Booz Allen Hamilton Holding Corporation

Defense IT and cybersecurity consulting; ~97% government revenue; strong intelligence community ties

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