3 Defense Stocks to Buy Hand-Over-Fist in June 2025

European defense stocks have been surging in the past few months, but this rally could spill over into American ones as well. A major fear was that President Donald Trump would cut defense spending significantly, but that does not seem to be the case. Instead, he proposed a 13% defense spending increase to $1 trillion.

Plus, Middle East tensions have boiled over. On top of that, both conflicts that were ongoing prior to his arrival have not been settled, despite Trump’s earlier statements on ending those within 24 hours.

All of this means continued demand for defense companies. Here are three that could be major beneficiaries.

Lockheed Martin (LMT)

Lockheed Martin (NYSE:LMT) is the sole supplier of many U.S. allies worldwide, and while Boeing (NYSE:BA) was chosen to develop the sixth-generation fighter jet, that doesn’t diminish the importance of Lockheed Martin’s F-16 and F-35s. These fighter jets are the linchpin of dozens of air forces worldwide, including the Israeli one, which is likely to see increasing action over the coming months.

And it’s not just jets that are necessitating governments to seek out Lockheed Martin as a contractor. This company supplies missiles, radar systems, and space systems. It makes THAAD and PAC-3 air defense systems, both of which are seeing additional demand due to the rise of drones and hypersonic missiles.

LMT stock currently trades at 20.8% below its all-time high price late last year. Analysts pegged its future annual revenue and EPS growth rate at around 4% to 5% for the rest of this decade. But with yet another Middle East conflict breaking out, growth could be in the double digits, depending on how long this one lasts.

The company has been very efficient in translating its profits into shareholder value. It comes with a 2.68% dividend yield, which is better than 85.3% of companies in the defense industry, along with a 3-year average share buyback ratio of 4.8%. Outstanding shares have been reduced from 279 million in 2020 to 233 million as of Q1 2025. The backlog stood at $173 billion in the same quarter.

RTX Corp (RTX)

RTX Corporation, or Raytheon (NYSE:RTX), makes aircraft engines, avionics, missiles, cybersecurity, and more. The most important defense product it makes today is the Patriot missile system. This missile defense system has red-hot demand, including the interceptors and parts for it. The demand is coming from multiple countries worldwide.

The Defense Logistics Agency is eyeing a potential follow-on production contract for the Patriot missile defense system worth $50 billion. Kuwait was approved a $425 million package for Patriot software, maintenance, spare parts, along with another $280 million Romania sale for a new radar, launchers, and upgrades. With conflicts remaining unresolved and more breaking out, RTX Corporation should see continued demand.

RTX stock is up 39.5% in the past year and has room to go up more after the most recent Middle East Conflict. The company could be a major beneficiary if the U.S. gets pulled into a conflict in Iran. RTX’s products would see explosive demand if this happens. And again, this is just the defense segment. RTX Corporation has a robust commercial segment.

Its Pratt & Whitney engines are the linchpin for many widely-used commercial aircraft like the Airbus A220, Airbus A320neo family, and the Boeing 747-400.

It reported a backlog of $217 billion in Q1. $125 billion of that was commercial, and $92 billion of the backlog was defense.

Boeing (BA)

Boeing has seen many negative catalysts this year. There have been a series of aircraft crashes, many of which involved Boeing’s aircraft. That said, the future potential of this company shouldn’t be tossed aside. As noted before, Boeing has been selected to spearhead the sixth-generation aircraft (or NGAD), and this could lead to a major comeback here.

Boeing has admittedly underperformed significantly in the past year. Revenue has declined from a peak of $101.13 billion in 2018 to just $66.52 billion in 2024. Not only that, this company posted $10.46 billion in profits in 2018, whereas it posted $11.82 billion in losses in 2024.

Thankfully, things have stopped going downhill, and trends are looking better for the future. On a trailing basis, revenue inched upwards, and the debt pile it accumulated in 2020 is slowly being paid off.

Analysts expect profitability next year as EPS goes from -$1.8 to $4.1. Revenue is also expected to recover by 25.6% to $83.55 billion this year and grow 16.64% to $97.45 billion next year. If the NGAD program goes according to schedule, current estimates project that Boeing could receive “hundreds of billions” over the course of the program’s lifespan.

Still, you’re betting on a turnaround when you buy BA stock. It’s unlikely to be short, but you could see significant returns if you stay patient and hold for years. The stock is still almost 53% below its peak.

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