As military operations intensify in Iran, defense spending is surging, with the U.S. projected to allocate $1 trillion for defense in 2026 and over $1.5 trillion in 2027. This escalating budget is drawing attention to defense stocks, particularly Lockheed Martin (LMT) and RTX (RTX), both of which are poised to benefit from increased government contracts and demand. Lockheed’s strong aeronautics segment, driven by F-35 sales and a record backlog of $194 billion, positions it well for future earnings stability. Meanwhile, RTX’s diversified business model, which includes both defense and commercial aerospace, offers a buffer against budget fluctuations.
Investors should note that while Lockheed Martin is a solid choice for those focused on defense spending, RTX’s broader portfolio may provide a more resilient investment strategy. With robust backlogs—$268 billion for RTX, with 40% from defense—both companies are well-placed to capitalize on the ongoing rearmament trend. However, RTX’s diversification gives it a slight edge in navigating potential market shifts.
Source: fool.com