Major defense contractors including Lockheed Martin, Raytheon Technologies, and General Dynamics are poised for record growth following the allocation of a $1 trillion defense budget. The funding increase is driving robust revenue expectations and stock momentum across the sector.
- Trillion-dollar defense budget enacted for FY2026 marks a record investment level
- Lockheed Martin expected to see 20%+ revenue growth in F-35 program
- Raytheon Technologies forecasts 17% YoY increase in defense segment revenue
- General Dynamics projects 25% rise in combat vehicle division revenue
- Stocks of LMT, RTX, GD, HON, and NOV showing strong post-budget rally
- Analysts anticipate 15–22% EPS growth across major defense contractors
The U.S. defense budget has reached a historic $1 trillion in fiscal year 2026, marking a significant escalation in national security spending. This surge is directly benefiting top-tier defense contractors with long-standing government contracts and diversified portfolios. Companies such as Lockheed Martin (LMT), Raytheon Technologies (RTX), General Dynamics (GD), Honeywell International (HON), and NOV Inc. (NOV) are positioned to capture a substantial share of this increased outlay. The expanded budget enables accelerated procurement of advanced systems, including next-generation fighter jets, missile defense platforms, and cyber infrastructure. Lockheed Martin, already a dominant player in aerospace and missile systems, expects its F-35 program revenue to rise by over 20% annually, driven by global demand and domestic modernization efforts. Raytheon Technologies projects a 17% YoY increase in defense revenue, fueled by growing orders for Patriot and THAAD missile systems. General Dynamics’ combat vehicle division anticipates a 25% revenue boost, supported by additional funding for the M1 Abrams tank upgrades and the Stryker fleet expansion. Meanwhile, Honeywell’s defense electronics and avionics units are set to benefit from new investments in pilot training simulators and secure communications gear. NOV, though primarily industrial, sees elevated demand for specialized components used in military aircraft and naval vessels. Stock prices have reacted swiftly: LMT is up 11% year-to-date, RTX has gained 9%, and GD has risen 14%. Analysts now forecast full-year EPS increases of 15–22% for these firms, signaling strong near-term profitability. Institutions are increasing positions, with options volume indicating heightened confidence in sustained performance through 2027.