Defense Stocks Surge Amid U.S.-Iran Conflict
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 02 2026
0mins
Should l Buy LMT?
Source: Benzinga
- Defense Stock Surge: Defense stocks experienced a significant rally on Monday following U.S. attacks on Iran, indicating strong market expectations for increased defense spending, which could enhance the financial performance of these companies.
- Congressional Holdings: Several members of Congress own shares in Lockheed Martin (LMT), Raytheon Technologies (RTX), and Palantir, suggesting they may profit from ongoing military actions, particularly those serving on defense committees.
- Potential Conflicts of Interest: Congressional members holding defense stocks may face conflicts of interest as they could receive insider information about military operations, potentially impacting market confidence and investor behavior.
- Increased Scrutiny: The rise in defense stocks has heightened public scrutiny on Congress members who own these shares, which may lead to increased examination of their trading activities and could affect their political careers and public image.
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Analyst Views on LMT
Wall Street analysts forecast LMT stock price to fall
12 Analyst Rating
4 Buy
7 Hold
1 Sell
Hold
Current: 607.490
Low
430.00
Averages
535.50
High
605.00
Current: 607.490
Low
430.00
Averages
535.50
High
605.00
About LMT
Lockheed Martin Corporation is a global aerospace and defense company. The Company is engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. Its segments include Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. Aeronautics segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft. MFC segment provides air and missile defense systems, manned and unmanned ground vehicles, energy management solutions, and others. RMS segment designs, manufactures, services and supports various military and commercial helicopters, surface ships, sea and land-based missile defense systems, and others. Its Space segment is engaged in the research and design, development, engineering and production of satellites, space transportation systems, and strategic, advanced strike, and defensive systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Lockheed Martin Set for Potential Blockbuster Quarter
- Strong Quarter Anticipation: Lockheed Martin's upcoming quarterly report is expected to be a “blockbuster,” with CEO Jim Taiclet excelling in managing government orders, indicating sustained demand and market confidence in the defense sector.
- Surge in Missile System Demand: Cramer highlighted the ongoing increase in demand for missile systems due to the Ukraine war and Israel's defense needs, suggesting that Lockheed Martin will significantly benefit from this trend, enhancing its market position.
- Defensive System Advantages: The company holds a crucial position in key defense projects like the Terminal High Altitude Area Defense (THAAD) and Aegis Ballistic Missile Defense (BMD), ensuring its competitiveness and technological leadership in the global defense market.
- Investment Potential Analysis: While Lockheed Martin shows strong investment potential, analysts note that certain AI stocks may offer greater upside and lower downside risk, prompting investors to choose wisely.
See More
Wall Street Earnings Season Faces Major Test
- Earnings Season Significance: Wall Street is set for a packed earnings season featuring key companies like Capital One and Boeing, with investors eager to glean insights into the economic impact of the Iran war from these reports.
- Capital One Performance Focus: Capital One is scheduled to report earnings on Tuesday, with market attention on its consumer health metrics and the progress of its acquisitions of Discover and Brex, particularly amid rising economic uncertainties.
- Boeing Earnings Outlook: Boeing is expected to release its earnings report on Wednesday, with market focus on order volumes in both its commercial and defense sectors, as well as free cash flow performance, especially after previous unexpected losses.
- GE Vernova Order Growth: GE Vernova will report alongside Boeing, with first-quarter new orders anticipated to reach $14.4 billion, reflecting a 65% year-over-year increase, indicating strong market performance amid rising electricity demand.
See More
US Defense Budget Surge Drives ETF Returns
- Defense Budget Surge: Trump's fiscal 2027 budget request of $1.5 trillion represents a roughly 40% year-over-year increase, providing strong structural support for the SPDR S&P Aerospace & Defense ETF (XAR), which is expected to drive earnings growth in related stocks.
- Strong ETF Performance: Over the past year, XAR has delivered nearly a 66% return, rising from around $159 to over $270, indicating sustained investor confidence in the defense sector amid current geopolitical tensions.
- Single Sector Risk: XAR allocates nearly all assets to the defense industrial sector, lacking diversification into other industries, which exposes it to significant risks if defense budgets contract or procurement cycles slow, necessitating clear investor awareness of this risk.
- Amplified Volatility: The equal-weight strategy of XAR means smaller innovative firms are weighted the same as larger contractors, which can amplify volatility during risk-off periods, requiring investors to accept this volatility in exchange for potential high returns.
See More
Impact of US-Iran Conflict on Defense Stocks
- Surge in Defense Spending: The U.S. is spending $2 billion daily in and around Iran, totaling $88 billion after 44 days of conflict, which exceeds the annual revenues of RTX, GD, and Lockheed, indicating significant growth opportunities in the defense sector.
- Weak Defense Stock Performance: Despite ongoing conflict, major defense contractors like General Dynamics, Lockheed Martin, and RTX have not seen significant stock price increases, reflecting market expectations for a short-term peace that may dampen investor interest in defense stocks in the near term.
- Textron Investment Opportunity: Textron's stock is trading close to 1x sales, and as a manufacturer of various military and civilian products, its V-22 Osprey tiltrotor aircraft may see increased usage in the conflict, highlighting its potential in the defense sector.
- Naval Shipbuilding Expansion: Leidos and Huntington Ingalls, as key military contractors, have competitive advantages in unmanned vessels and nuclear submarines, respectively, and are expected to benefit from the U.S. Navy's fleet expansion, showcasing significant long-term growth potential.
See More
Defense Stocks Decline Amid Iran Conflict
- Defense Stock Performance: Major defense stocks like General Dynamics (GD), Lockheed Martin (LMT), and RTX have seen declines over the past six weeks despite ongoing U.S.-Iran conflict, indicating weakened investor confidence amid expectations of a short-lived war and imminent peace.
- Massive Spending Impact: Economists from Harvard Kennedy School report that the U.S. is spending $2 billion daily in and around Iran, totaling $88 billion over 44 days, which exceeds RTX's annual revenue, highlighting the potential long-term implications of the conflict on the defense sector.
- Investment Opportunities: Despite the overall poor performance of defense stocks, investors are advised to consider buying during this downturn, with Textron (TXT) trading at 1.06 times sales, indicating its potential in meeting future military demands, especially as tensions in the Gulf escalate.
- Optimistic Industry Outlook: Companies like Leidos (LDOS) and Huntington Ingalls (HII) show promising growth potential, with Leidos averaging 20% annual earnings growth over the past five years and Huntington expected to achieve a 15% long-term growth rate, suggesting a potential recovery for the defense industry ahead.
See More
Trump Issues Ultimatum on Iran Ceasefire Negotiations
- Ultimatum Issued: President Trump has warned that he may not extend the ceasefire with Iran if a final agreement is not reached by next Wednesday, indicating that the window for a diplomatic resolution is rapidly closing and military action may escalate.
- Military Threat Intensifies: Trump suggested a potential return to military action, stating, "Maybe I won’t extend it… and we’ll have to start dropping bombs again," which heightens market concerns regarding the Middle East situation and could impact global energy markets.
- Market Skepticism: Despite Trump's optimistic claims about a breakthrough, market analysts note that real-world shipping activity remains severely constrained, with many commercial vessels opting to turn away from the Strait of Hormuz, indicating skepticism about the safety of the route.
- Negotiation Stability Questioned: As the mid-week deadline approaches, the stability of negotiations between Trump and Iran is under scrutiny, with observers expressing concerns about the disconnect between the administration's optimistic rhetoric and the logistical realities on the ground, potentially leading to further volatility in global energy markets.
See More
Lockheed Martin Set for Potential Blockbuster Quarter
- Strong Quarter Anticipation: Lockheed Martin's upcoming quarterly report is expected to be a “blockbuster,” with CEO Jim Taiclet excelling in managing government orders, indicating sustained demand and market confidence in the defense sector.
- Surge in Missile System Demand: Cramer highlighted the ongoing increase in demand for missile systems due to the Ukraine war and Israel's defense needs, suggesting that Lockheed Martin will significantly benefit from this trend, enhancing its market position.
- Defensive System Advantages: The company holds a crucial position in key defense projects like the Terminal High Altitude Area Defense (THAAD) and Aegis Ballistic Missile Defense (BMD), ensuring its competitiveness and technological leadership in the global defense market.
- Investment Potential Analysis: While Lockheed Martin shows strong investment potential, analysts note that certain AI stocks may offer greater upside and lower downside risk, prompting investors to choose wisely.
See More
Wall Street Earnings Season Faces Major Test
- Earnings Season Significance: Wall Street is set for a packed earnings season featuring key companies like Capital One and Boeing, with investors eager to glean insights into the economic impact of the Iran war from these reports.
- Capital One Performance Focus: Capital One is scheduled to report earnings on Tuesday, with market attention on its consumer health metrics and the progress of its acquisitions of Discover and Brex, particularly amid rising economic uncertainties.
- Boeing Earnings Outlook: Boeing is expected to release its earnings report on Wednesday, with market focus on order volumes in both its commercial and defense sectors, as well as free cash flow performance, especially after previous unexpected losses.
- GE Vernova Order Growth: GE Vernova will report alongside Boeing, with first-quarter new orders anticipated to reach $14.4 billion, reflecting a 65% year-over-year increase, indicating strong market performance amid rising electricity demand.
See More
US Defense Budget Surge Drives ETF Returns
- Defense Budget Surge: Trump's fiscal 2027 budget request of $1.5 trillion represents a roughly 40% year-over-year increase, providing strong structural support for the SPDR S&P Aerospace & Defense ETF (XAR), which is expected to drive earnings growth in related stocks.
- Strong ETF Performance: Over the past year, XAR has delivered nearly a 66% return, rising from around $159 to over $270, indicating sustained investor confidence in the defense sector amid current geopolitical tensions.
- Single Sector Risk: XAR allocates nearly all assets to the defense industrial sector, lacking diversification into other industries, which exposes it to significant risks if defense budgets contract or procurement cycles slow, necessitating clear investor awareness of this risk.
- Amplified Volatility: The equal-weight strategy of XAR means smaller innovative firms are weighted the same as larger contractors, which can amplify volatility during risk-off periods, requiring investors to accept this volatility in exchange for potential high returns.
See More
Impact of US-Iran Conflict on Defense Stocks
- Surge in Defense Spending: The U.S. is spending $2 billion daily in and around Iran, totaling $88 billion after 44 days of conflict, which exceeds the annual revenues of RTX, GD, and Lockheed, indicating significant growth opportunities in the defense sector.
- Weak Defense Stock Performance: Despite ongoing conflict, major defense contractors like General Dynamics, Lockheed Martin, and RTX have not seen significant stock price increases, reflecting market expectations for a short-term peace that may dampen investor interest in defense stocks in the near term.
- Textron Investment Opportunity: Textron's stock is trading close to 1x sales, and as a manufacturer of various military and civilian products, its V-22 Osprey tiltrotor aircraft may see increased usage in the conflict, highlighting its potential in the defense sector.
- Naval Shipbuilding Expansion: Leidos and Huntington Ingalls, as key military contractors, have competitive advantages in unmanned vessels and nuclear submarines, respectively, and are expected to benefit from the U.S. Navy's fleet expansion, showcasing significant long-term growth potential.
See More
Defense Stocks Decline Amid Iran Conflict
- Defense Stock Performance: Major defense stocks like General Dynamics (GD), Lockheed Martin (LMT), and RTX have seen declines over the past six weeks despite ongoing U.S.-Iran conflict, indicating weakened investor confidence amid expectations of a short-lived war and imminent peace.
- Massive Spending Impact: Economists from Harvard Kennedy School report that the U.S. is spending $2 billion daily in and around Iran, totaling $88 billion over 44 days, which exceeds RTX's annual revenue, highlighting the potential long-term implications of the conflict on the defense sector.
- Investment Opportunities: Despite the overall poor performance of defense stocks, investors are advised to consider buying during this downturn, with Textron (TXT) trading at 1.06 times sales, indicating its potential in meeting future military demands, especially as tensions in the Gulf escalate.
- Optimistic Industry Outlook: Companies like Leidos (LDOS) and Huntington Ingalls (HII) show promising growth potential, with Leidos averaging 20% annual earnings growth over the past five years and Huntington expected to achieve a 15% long-term growth rate, suggesting a potential recovery for the defense industry ahead.
See More
Trump Issues Ultimatum on Iran Ceasefire Negotiations
- Ultimatum Issued: President Trump has warned that he may not extend the ceasefire with Iran if a final agreement is not reached by next Wednesday, indicating that the window for a diplomatic resolution is rapidly closing and military action may escalate.
- Military Threat Intensifies: Trump suggested a potential return to military action, stating, "Maybe I won’t extend it… and we’ll have to start dropping bombs again," which heightens market concerns regarding the Middle East situation and could impact global energy markets.
- Market Skepticism: Despite Trump's optimistic claims about a breakthrough, market analysts note that real-world shipping activity remains severely constrained, with many commercial vessels opting to turn away from the Strait of Hormuz, indicating skepticism about the safety of the route.
- Negotiation Stability Questioned: As the mid-week deadline approaches, the stability of negotiations between Trump and Iran is under scrutiny, with observers expressing concerns about the disconnect between the administration's optimistic rhetoric and the logistical realities on the ground, potentially leading to further volatility in global energy markets.
See More
