5 Defense Stocks to Buy as the U.S. Restocks Its Arsenal

As the U.S. and Iran continue their “ceasefire but with bombs” campaign, a new investment trend is beginning to materialize.

Even if the fighting is winding down, the Department of Defense (DoD) has been using up munitions in Iran and Ukraine at an alarming rate, and now the grand restocking process has begun.

The Trump administration has requested a $1.5 trillion Pentagon budget for fiscal 2027, of which more than half would go toward restocking munitions and weapons systems.

The market has yet to price in this tailwind for many U.S. defense contractors, creating an investment opportunity in the companies most likely to win these bids.

Here are the five stocks set to benefit most as the U.S. military restocks its arsenal.

Lockheed Martin Corp. $116 billion megacap defense contractor Lockheed Martin (NYSE: LMT ) is the biggest beneficiary of the rearmanent phase, although its share price hasn’t been acting like it.

The stock is down nearly 20% in the last three months as hostilities have given way to fragile ceasefire developments.

But it’s hard to ignore the fundamental tailwinds fueling the company’s bottom line.

Lockheed is the prime source for the now-depleted THAAD interceptor missiles, as well as the GMLRS and HIMARS rocket systems, which are crucial to Ukrainian defense.

The company’s $186 billion backlog continues to expand, and it received another boost this month with a new seven-year, $35 billion DoD contract to restock the THAAD interceptor supply.

Thanks to the drawdown, LMT now trades at just 16 times forward earnings and 1.5 times sales, pricing the stock at a discount to the broader aerospace/defense industry.

Despite the backlog and new-order tailwinds, the stock has been stuck in a sideways trading range since its losing streak was halted in late April.

However, technical signals are starting to perk up, and that could signal a new wave of momentum.

The Moving Average Convergence Divergence (MACD) indicator has bounced from oversold to nearly positive territory, and the Relative Strength Index (RSI) has been trending up since the end of the volatile decline.

RTX Corp.

RTX (NYSE: RTX ) has broader exposure to the rearmament theme thanks to its extensive portfolio of DoD favorites.

RTX manufactures Patriot and Tomahawk missiles, the SM-3 and SM-6 ballistic missiles, and man-portable Javelin missiles.

All of these munitions require restocking, and RTX’s record $270 billion backlog speaks to the exhaustion of supplies.

Management raised full-year 2026 EPS and sales guidance during its Q1 2026 earnings report in April, and reported new government contracts in all three divisions (Pratt, Collins, and Raytheon), including a new $1.1 billion deal for the AIM-9X sidewinder missile.

RTX has grown revenue by nearly 10% year-over-year (YoY), which is why it trades at a higher multiple than its peers on our list at 27 times forward earnings.

The stock also has more momentum than large-cap peers like LMT, up 4% in the last month, while other defense contractors stumbled.

The long-term downtrend has been broken by recent price action, and the technicals have confirmed this momentum shift.

The RSI has pushed above 50 into bullish territory, and the MACD is now positive following a bullish cross in early May.

RTX has the largest backlog and the deepest manufacturing repertoire, which is why it’s outperforming other contractors right now.

General Dynamics Corp.

General Dynamics (NYSE: GD ) supplies the Ordnance and Tactical Systems unit (GD-OTS), which is a critical system for the 155mm artillery shell primarily used by soldiers in Ukraine.

While the flashier missile systems get the contract award headlines, General Dynamics produces high volumes of land-war munitions, and its 10% YoY revenue growth indicates that high-tech missiles aren’t the only way for a defense contractor to make a profit.

At 20 times forward earnings, the stock is cheaper than the industry average, but not so cheap as to suggest long-term concerns.

The company is also a Dividend Aristocrat with a 1.83% yield, 40% dividend payout ratio, and a 34-year track record of annual payout increases.

GD shares are up just over 3% so far this year, and now appear to be consolidating ahead of the next move.

The range has tightened considerably over the last few weeks, and the 50-day and 200-day moving averages have also narrowed to nearly identical figures.

But the RSI and MACD suggest the next move will be bullish, and a strong Q2 report on July 29 could be the catalyst that ignites the rally.

L3Harris Technologies Inc.

L3Harris Technologies (NYSE: LHX ) booked a sweetheart deal with the DoD back in April, in which the U.S. invested over $1 billion in its Missile Solutions business through preferred stock.

That preferred stock will become common stock if and when the Missile Solutions business IPOs, giving the company not only a leg up on competition but also a catalyst in the second half of the year.

The Missile Solutions division provides the rocket propulsion systems critical to THAAD and Tomahawk missiles, so it benefits from this chokepoint regardless of which contractor wins the final bid.