Defense stocks benefit from historic spending increases.
Defense needs to be looked at in an entirely different light due to a historic increase in spending ($1.5 trillion requested for fiscal 2027), which will lead to a far better growth profile for longer than people expect. Large cap primes like Lockheed Martin and Raytheon Technologies will benefit more, with specific programs like Golden Dome being a $40 billion program over the next two years. Palantir, as a newer entrant, also saw larger growth in the request.