Global Military Spending Reaches Record High
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 13h ago
0mins
Should l Buy LMT?
Source: Fool
- Surge in Military Spending: Global military expenditure reached a record $2.7 trillion in 2024, with the U.S. accounting for about half, as its 2026 budget is set at $1.48 trillion, reflecting a $500 billion increase from 2025, indicating a strong commitment to defense investment.
- Germany's Defense Budget Growth: Germany boosted its defense spending to €86 billion in 2025, becoming the fourth-largest military spender globally, and increased its 2026 budget by 25% to €108 billion, aiming for €152 billion by 2029, highlighting its focus on military modernization.
- Lockheed Martin's Revenue Growth: Lockheed Martin's sales grew 6% to $75 billion in 2025, with a slight decline in earnings per share, yet its net cash position surged 66% to $4.12 billion and operating cash flow skyrocketed 214% to $3.22 billion, showcasing strong financial performance amid rising defense spending.
- Rheinmetall's Sales Increase: Rheinmetall reported a 13% sales increase to €2.78 billion in Q3 2025, with operating margin rising to 12.9% and backlog growing 23% to €63.8 billion, projecting 35%-40% sales growth for 2025, indicating its strong position to benefit from Germany's defense budget expansion.
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Analyst Views on LMT
Wall Street analysts forecast LMT stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for LMT is 535.50 USD with a low forecast of 430.00 USD and a high forecast of 605.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
4 Buy
7 Hold
1 Sell
Hold
Current: 609.180
Low
430.00
Averages
535.50
High
605.00
Current: 609.180
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.
Global Military Spending Reaches Record High
- Surge in Military Spending: Global military expenditure reached a record $2.7 trillion in 2024, with the U.S. accounting for about half, as its 2026 budget is set at $1.48 trillion, reflecting a $500 billion increase from 2025, indicating a strong commitment to defense investment.
- Germany's Defense Budget Growth: Germany boosted its defense spending to €86 billion in 2025, becoming the fourth-largest military spender globally, and increased its 2026 budget by 25% to €108 billion, aiming for €152 billion by 2029, highlighting its focus on military modernization.
- Lockheed Martin's Revenue Growth: Lockheed Martin's sales grew 6% to $75 billion in 2025, with a slight decline in earnings per share, yet its net cash position surged 66% to $4.12 billion and operating cash flow skyrocketed 214% to $3.22 billion, showcasing strong financial performance amid rising defense spending.
- Rheinmetall's Sales Increase: Rheinmetall reported a 13% sales increase to €2.78 billion in Q3 2025, with operating margin rising to 12.9% and backlog growing 23% to €63.8 billion, projecting 35%-40% sales growth for 2025, indicating its strong position to benefit from Germany's defense budget expansion.
See More
Lockheed Martin Announces Q1 2026 Dividend
- Dividend Announcement: Lockheed Martin's board has authorized a Q1 2026 dividend of $3.45 per share, payable on March 27, 2026, reflecting the company's commitment to shareholder returns amid strong earnings.
- Record Date: The record date for the dividend is set for March 2, 2026, ensuring that investors holding shares by this date will receive the dividend, which enhances investor confidence in the company's stability.
- Capital Allocation Strategy: The company is significantly increasing investments while maintaining a disciplined and dynamic approach to capital allocation, indicating its ability to balance growth and returns, which boosts market expectations for future performance.
- Innovation Focus: As a global defense technology company, Lockheed Martin is dedicated to driving innovation and scientific discovery, with its all-domain mission solutions and 21st Century Security® vision accelerating the delivery of transformative technologies to keep clients ahead of the curve.
See More
Defense Stocks Surge in 2026 Amid Geopolitical Tensions
- Surge in Defense Spending: Global defense spending is projected to reach $2.6 trillion in 2026, reflecting an 8.1% increase from 2025, driven by heightened geopolitical uncertainties prompting nations to boost military budgets, thereby fostering overall growth in the defense sector.
- Strong Performance by Major Firms: Lockheed Martin, Northrop Grumman, and Huntington Ingalls Industries have all seen their stock prices rise over 20% in early 2026, with Lockheed Martin leading at a 26% increase, indicating strong market confidence and investment enthusiasm in the defense industry.
- Increased NATO Spending Goals: Under pressure from the Trump administration, NATO's defense spending target has been raised from 2% to 5% of GDP by 2035, prompting major economies like Germany to significantly ramp up defense investments, with Germany expected to meet this target by 2030, further driving growth in the global defense market.
- Surge in U.S. Arms Sales: The Trump administration recently approved massive arms sales to Israel and Saudi Arabia, totaling $6.67 billion and $9 billion respectively, primarily benefiting U.S. defense firms, highlighting that in an increasingly dangerous global security environment, the defense industry will continue to thrive from government spending and investments.
See More
Japan Election Preview: High Probability of Policy Continuity
- Election Outlook: Japan is heading to the polls on February 8, with markets pricing in a 99% chance that Prime Minister Sanae Takaichi will remain in power, indicating strong expectations for policy continuity.
- Policy Impact Expectations: The market anticipates that Takaichi will continue aggressive fiscal stimulus and adopt a slower approach to interest rate hikes from the Bank of Japan, which will support economic growth and bolster market confidence.
- Yen Performance Analysis: Ahead of the election, the yen has been trading heavily, with USD/JPY hovering near the 157 level, reflecting market uncertainty about future policies and strong confidence in Takaichi's re-election.
- Governing Party Dynamics: The market shows a 99% support rate for the ruling Liberal Democratic Party (LDP) while the Japan Innovation Party (JIP) stands at only 22%, suggesting that the LDP may govern without its coalition partner, providing Takaichi with a “clear runway” to implement more hawkish policies.
See More
Surge in U.S. Layoffs Alters Investment Strategies
- Surge in Layoffs: January saw over 108,000 layoffs in the U.S., marking the worst start to the year since 2009, with hiring plans plummeting to record lows, indicating heightened economic uncertainty according to Challenger, Gray & Christmas.
- Focus on Wealth Preservation: Post-layoff, wealth creation takes a backseat to wealth preservation strategies, as financial planners recommend maintaining a substantial emergency fund to cover essential expenses like rent and insurance, thereby mitigating risks during market volatility.
- Income-Focused ETFs Gain Traction: With salary income halted, investors are turning to ETFs designed for cash flow, such as iShares Core U.S. Aggregate Bond ETF and Vanguard Total Bond Market ETF, which can modestly supplement cash reserves during unemployment, although they are not substitutes for regular paychecks.
- Gradual Investment Approach: Investing severance packages all at once exposes individuals to market timing risks; thus, gradual allocation strategies are advised to smooth entry points, especially when job searches extend longer than anticipated, ensuring liquidity amid economic uncertainty.
See More
Lockheed Martin Secures $249M Contract for Electronic Warfare System
- Significant Contract Value: Lockheed Martin has been awarded a $249 million contract that encompasses spares, repairs, and engineering services for the Surface Electronic Warfare Improvement Program, indicating robust demand in the defense sector.
- Project Timeline: The work will be conducted in Liverpool, New York, and is expected to be completed by February 2031, highlighting the company's ongoing commitment and strategic planning in long-term defense projects.
- Diverse Contract Nature: This contract is a cost-plus-fixed-fee and firm-fixed-price IDIQ contract, reflecting Lockheed Martin's flexibility and adaptability in managing complex defense projects, thereby enhancing its competitive edge in the market.
- Contracting Activity Context: The contract is awarded by the Naval Surface Warfare Center Crane in Indiana, further solidifying Lockheed Martin's collaboration with the U.S. Navy and suggesting potential for more cooperative opportunities in the future.
See More
Global Military Spending Reaches Record High
- Surge in Military Spending: Global military expenditure reached a record $2.7 trillion in 2024, with the U.S. accounting for about half, as its 2026 budget is set at $1.48 trillion, reflecting a $500 billion increase from 2025, indicating a strong commitment to defense investment.
- Germany's Defense Budget Growth: Germany boosted its defense spending to €86 billion in 2025, becoming the fourth-largest military spender globally, and increased its 2026 budget by 25% to €108 billion, aiming for €152 billion by 2029, highlighting its focus on military modernization.
- Lockheed Martin's Revenue Growth: Lockheed Martin's sales grew 6% to $75 billion in 2025, with a slight decline in earnings per share, yet its net cash position surged 66% to $4.12 billion and operating cash flow skyrocketed 214% to $3.22 billion, showcasing strong financial performance amid rising defense spending.
- Rheinmetall's Sales Increase: Rheinmetall reported a 13% sales increase to €2.78 billion in Q3 2025, with operating margin rising to 12.9% and backlog growing 23% to €63.8 billion, projecting 35%-40% sales growth for 2025, indicating its strong position to benefit from Germany's defense budget expansion.
See More
Lockheed Martin Announces Q1 2026 Dividend
- Dividend Announcement: Lockheed Martin's board has authorized a Q1 2026 dividend of $3.45 per share, payable on March 27, 2026, reflecting the company's commitment to shareholder returns amid strong earnings.
- Record Date: The record date for the dividend is set for March 2, 2026, ensuring that investors holding shares by this date will receive the dividend, which enhances investor confidence in the company's stability.
- Capital Allocation Strategy: The company is significantly increasing investments while maintaining a disciplined and dynamic approach to capital allocation, indicating its ability to balance growth and returns, which boosts market expectations for future performance.
- Innovation Focus: As a global defense technology company, Lockheed Martin is dedicated to driving innovation and scientific discovery, with its all-domain mission solutions and 21st Century Security® vision accelerating the delivery of transformative technologies to keep clients ahead of the curve.
See More
Defense Stocks Surge in 2026 Amid Geopolitical Tensions
- Surge in Defense Spending: Global defense spending is projected to reach $2.6 trillion in 2026, reflecting an 8.1% increase from 2025, driven by heightened geopolitical uncertainties prompting nations to boost military budgets, thereby fostering overall growth in the defense sector.
- Strong Performance by Major Firms: Lockheed Martin, Northrop Grumman, and Huntington Ingalls Industries have all seen their stock prices rise over 20% in early 2026, with Lockheed Martin leading at a 26% increase, indicating strong market confidence and investment enthusiasm in the defense industry.
- Increased NATO Spending Goals: Under pressure from the Trump administration, NATO's defense spending target has been raised from 2% to 5% of GDP by 2035, prompting major economies like Germany to significantly ramp up defense investments, with Germany expected to meet this target by 2030, further driving growth in the global defense market.
- Surge in U.S. Arms Sales: The Trump administration recently approved massive arms sales to Israel and Saudi Arabia, totaling $6.67 billion and $9 billion respectively, primarily benefiting U.S. defense firms, highlighting that in an increasingly dangerous global security environment, the defense industry will continue to thrive from government spending and investments.
See More
Japan Election Preview: High Probability of Policy Continuity
- Election Outlook: Japan is heading to the polls on February 8, with markets pricing in a 99% chance that Prime Minister Sanae Takaichi will remain in power, indicating strong expectations for policy continuity.
- Policy Impact Expectations: The market anticipates that Takaichi will continue aggressive fiscal stimulus and adopt a slower approach to interest rate hikes from the Bank of Japan, which will support economic growth and bolster market confidence.
- Yen Performance Analysis: Ahead of the election, the yen has been trading heavily, with USD/JPY hovering near the 157 level, reflecting market uncertainty about future policies and strong confidence in Takaichi's re-election.
- Governing Party Dynamics: The market shows a 99% support rate for the ruling Liberal Democratic Party (LDP) while the Japan Innovation Party (JIP) stands at only 22%, suggesting that the LDP may govern without its coalition partner, providing Takaichi with a “clear runway” to implement more hawkish policies.
See More
Surge in U.S. Layoffs Alters Investment Strategies
- Surge in Layoffs: January saw over 108,000 layoffs in the U.S., marking the worst start to the year since 2009, with hiring plans plummeting to record lows, indicating heightened economic uncertainty according to Challenger, Gray & Christmas.
- Focus on Wealth Preservation: Post-layoff, wealth creation takes a backseat to wealth preservation strategies, as financial planners recommend maintaining a substantial emergency fund to cover essential expenses like rent and insurance, thereby mitigating risks during market volatility.
- Income-Focused ETFs Gain Traction: With salary income halted, investors are turning to ETFs designed for cash flow, such as iShares Core U.S. Aggregate Bond ETF and Vanguard Total Bond Market ETF, which can modestly supplement cash reserves during unemployment, although they are not substitutes for regular paychecks.
- Gradual Investment Approach: Investing severance packages all at once exposes individuals to market timing risks; thus, gradual allocation strategies are advised to smooth entry points, especially when job searches extend longer than anticipated, ensuring liquidity amid economic uncertainty.
See More
Lockheed Martin Secures $249M Contract for Electronic Warfare System
- Significant Contract Value: Lockheed Martin has been awarded a $249 million contract that encompasses spares, repairs, and engineering services for the Surface Electronic Warfare Improvement Program, indicating robust demand in the defense sector.
- Project Timeline: The work will be conducted in Liverpool, New York, and is expected to be completed by February 2031, highlighting the company's ongoing commitment and strategic planning in long-term defense projects.
- Diverse Contract Nature: This contract is a cost-plus-fixed-fee and firm-fixed-price IDIQ contract, reflecting Lockheed Martin's flexibility and adaptability in managing complex defense projects, thereby enhancing its competitive edge in the market.
- Contracting Activity Context: The contract is awarded by the Naval Surface Warfare Center Crane in Indiana, further solidifying Lockheed Martin's collaboration with the U.S. Navy and suggesting potential for more cooperative opportunities in the future.
See More
