5StarsStocks.com Military: Best Military Stock Picks 2025

The best military stock picks for 2025, according to 5StarsStocks.com, include Lockheed Martin (LMT), Northrop Grumman (NOC), Raytheon Technologies (RTX), General Dynamics (GD), and Palantir Technologies (PLTR). These companies are forecasted to benefit from increased global defense budgets, advanced weapons systems development, and AI-integrated defense solutions. Investors looking to capitalize on stable, long-term returns from the defense sector should pay close attention to these well-positioned firms.

Why Military Stocks Are a Smart Investment in 2025

Global Tensions Fueling Growth

Military spending continues to rise globally in 2025, driven by geopolitical tensions, ongoing conflicts, and strategic defense alliances. The U.S., NATO allies, and Asia-Pacific countries have significantly increased budgets, creating opportunities for defense contractors.

According to the Stockholm International Peace Research Institute (SIPRI), global military expenditure reached over $2.3 trillion in 2024 — and it’s projected to grow in 2025. This uptick ensures steady government contracts and reliable revenue for defense companies.

1. Lockheed Martin (LMT) – Defense Giant with Global Reach

Why It’s a Top Pick:
Lockheed Martin remains a cornerstone of the U.S. defense industry. The company is the lead contractor for the F-35 fighter jet program and is heavily involved in missile systems, space tech, and AI warfare technologies.

• 2025 Outlook: Strong F-35 demand from NATO and Indo-Pacific allies
• Dividend Yield: Approx. 2.6%
• Recent Highlights: Multi-billion-dollar hypersonic missile development contracts

Investor Advantage: Stable dividends, long-term contracts, and global presence.

2. Northrop Grumman (NOC) – Advanced Technology and Aerospace Leader

Why It’s a Top Pick:
Northrop Grumman is renowned for its work in autonomous systems, nuclear deterrence, and satellite solutions. The B-21 Raider bomber, entering production in 2025, offers massive revenue potential.

• 2025 Outlook: Expansion into next-gen drones and AI-based defense
• Dividend Yield: Approx. 1.6%
• Recent Highlights: Major Department of Defense contracts for nuclear command systems

Investor Advantage: Cutting-edge technology and consistent government contracts.

3. Raytheon Technologies (RTX) – Missile Systems and Cyber Defense Innovator

Why It’s a Top Pick:
Raytheon is a key player in missile defense systems, radar, and cybersecurity — all crucial in modern warfare. The recent focus on hypersonic missile systems positions RTX as a key long-term growth stock.

• 2025 Outlook: Increased demand from Eastern Europe and Pacific partners
• Dividend Yield: Approx. 2.4%
• Recent Highlights: Expanded Patriot missile contracts with NATO countries

Investor Advantage: Strong R&D pipeline, global defense relationships.

4. General Dynamics (GD) – Land Systems and Submarine Powerhouse

Why It’s a Top Pick:
General Dynamics is critical for the U.S. Navy and Army. From nuclear submarines to armored vehicles, GD’s portfolio is unmatched in reliability and defense strength.

• 2025 Outlook: Growth in submarine manufacturing and land combat systems
• Dividend Yield: Approx. 2.2%
• Recent Highlights: Secured major contracts for Columbia-class submarines

Investor Advantage: Strong government relations and diversified defense portfolio.

5. Palantir Technologies (PLTR) – AI and Big Data for Military Intelligence

Why It’s a Top Pick:
Palantir is reshaping military operations using artificial intelligence, machine learning, and real-time data analytics. As defense shifts toward digital battlefields, Palantir’s role becomes central.

• 2025 Outlook: Continued adoption across U.S. Army, Air Force, and NATO tech systems
• Dividend Yield: None (growth stock)
• Recent Highlights: Army’s TITAN program and U.S. Space Force integrations

Investor Advantage: High-growth potential from next-gen battlefield tech.

Key Trends Driving Military Stocks in 2025

1. AI and Autonomous Warfare

The integration of AI into drones, surveillance systems, and battlefield logistics gives tech-forward defense firms an edge. Companies like Northrop Grumman and Palantir are leading this frontier.

2. Space as the New Domain

The space defense race is heating up. With threats in orbital territories increasing, firms like Lockheed Martin and Raytheon are winning new contracts in satellite defense systems.

3. Cybersecurity and Defense Tech

Digital warfare is a top concern for national security. Raytheon and Palantir are expanding rapidly in this field with military-grade cybersecurity and intelligence tools.

4. Global Partnerships and Exports

Export contracts to allied nations are surging. American defense firms are supplying arms to Eastern Europe, Indo-Pacific allies, and NATO countries, boosting revenue diversification.

Risk Factors to Watch in 2025

• Political Uncertainty: Government budget freezes or contract renegotiations can affect revenues.
• Regulatory Hurdles: Defense exports are subject to strict controls and changing foreign policy.
• Ethical Scrutiny: Public and investor sentiment can shift on companies profiting from war-related tech.

Investing in Military Stocks: Tips from 5StarsStocks.com

Long-Term Perspective

Defense stocks are typically long-cycle investments. They thrive on multiyear government contracts and global alliances.

Diversify Within the Sector

Balance between legacy manufacturers (LMT, GD) and tech disruptors (PLTR) for a well-rounded portfolio.

Track Government Defense Budgets

Monitor U.S. DoD and NATO spending projections to anticipate contract flow and stock performance.

Watch for Mergers and Acquisitions

M&A activity in 2025 is likely, especially among AI and aerospace firms, offering sudden value surges for early investors.

Conclusion: Defense Is Evolving, and So Should Your Portfolio

Military stocks in 2025 are no longer just about tanks and jets. They represent a convergence of high technology, global diplomacy, and strategic deterrence. From Lockheed’s air supremacy to Palantir’s AI command systems, defense investing has become both future-forward and financially promising.

5StarsStocks.com recommends a strategic mix of legacy defense firms and emerging tech players for investors seeking stability with upside potential in a turbulent global landscape. Stay informed, stay diversified, and keep your radar on high.