My Top 3 Best Defence Stocks to Buy Now
By Christopher Patterson, Head of Corporate, RS Global Group
Defence stocks continue to attract investor interest due to their reliance on long-term government contracts and their relative insulation from economic cycles. This appeal is reinforced by elevated geopolitical tensions and sustained public-sector spending. The U.S. fiscal 2026 National Defence Authorization Act authorizes $924.7 billion in military expenditures, slightly above 2025 levels, while ongoing conflicts in Ukraine and the Middle East, as well as rising tensions between China and Taiwan, suggest that global defence investment could increase further. Against this backdrop, here are some stocks that in my view are positioned for durable earnings growth.
General Dynamics Corp. (GD)
General Dynamics is a diversified aerospace and defence contractor with a broad portfolio that includes Gulfstream business jets, Abrams tanks, and nuclear submarines. A significant portion of the company’s revenue is derived from long-term contracts with the U.S. government. General Dynamics is nearing the end of an intensive research and development cycle at its Gulfstream unit, setting the stage for potential margin expansion as deliveries of the G800 and other new aircraft models accelerate. I also expect improved profitability in the company’s Marine Systems segment, further supporting earnings growth.
TransDigm Group Inc. (TDG)
TransDigm designs and manufactures proprietary aircraft components for both original equipment manufacturers and the aftermarket, serving commercial and military customers. The company has pursued an active acquisition strategy in recent years, including purchases of SEI Industries, Raptor Scientific, and the components and subsystems business of Communications & Power Industries. TransDigm is a mature aerospace company offering “growth at a reasonable price,” and it trades at a valuation discount relative to peers. I expect the company to continue generating strong cash flow and deploying capital through special dividends, acquisitions, and share buybacks.
Axon Enterprise Inc. (AXON)
Axon Enterprise provides technology solutions to law enforcement and military customers, including body-worn cameras, in-vehicle camera systems, drone technology, virtual reality training, and digital evidence management platforms. Axon has exposure to multiple long-term growth themes, including drones, artificial intelligence, enterprise software, and international expansion. I expect these drivers to expand the company’s addressable market and support annual revenue growth in the range of 25% to 30% over the foreseeable future.
Together, these three companies illustrate why defence-related stocks remain attractive to investors seeking stability, long-term visibility, and selective growth opportunities amid an uncertain global environment.
Disclosure: The author does not hold any position in the securities discussed.
Recent Comments