May 26, 2026
The Defense Trade Everyone Understands But Not Everyone Owns
The numbers are not subtle. Backlogs are at records. Budgets keep climbing. And U.S. names are still cheaper than Europe.
At some point the setup stops being a thesis and just becomes a fact.
Global defense budgets are approaching $2.7 trillion annually. NATO’s spending floor just moved from 2% to 5% of GDP. Trump’s proposed FY2027 defense budget came in near $1.5 trillion. The Golden Dome missile shield – a next-gen AI-integrated homeland defense layer – is being fast-tracked, with estimated costs ranging from $250 billion to well over $1 trillion across the build-out. This is not a geopolitical headline trade. It is a multi-decade fiscal commitment that is already embedded in government budgets across dozens of countries. The spending is not speculative. It is contracted, appropriated, and in some cases already in production.
And yet U.S. defense names are still cheaper than their European counterparts.
That is the part worth paying attention to.
The SpaceX IPO Could Move More Than Just Stocks
When major IPOs hit Wall Street, money doesn’t just flow into new shares.
Funds rebalance. Institutions reposition. Retirement accounts often move with them whether investors realize it or not.
A new free 2026 Gold Guide explains how some Americans are moving part of their retirement savings into physical gold tax-free and penalty-free.
Here is where I am at on each of the three names most worth watching right now.
Lockheed Martin reported a Q1 2026 backlog of $186.4 billion, with roughly $63 billion expected to convert into revenue over the next 12 months. Full-year sales guidance is $77.5B to $80B, free cash flow guidance is $6.5B to $6.8B, and Street consensus price targets are clustered in the $621 to $627 range. The quarter itself was operationally soft – deliveries lighter than expected on F-35 – but full-year guidance held, and at this backlog scale one quarter of noise does not shift the longer picture. Worth noting: LMT just broke ground on a new Munitions Production Center in Troy, Alabama. That is not a press release. That is concrete being poured.
Millionaire warns: “Move your money now.”
Larry Benedict generated $274 million in profits for his clients by knowing where money flows when the Federal Reserve shifts.
He says Trump’s Fed Takeover is triggering the most significant shift in U.S. markets in nearly 20 years.
He’s already identified the one ticker he expects billions to flood into… and he’s giving away the name for free.
Click here to get the full details before the window closes.
RTX was the cleanest quarter in the group. Adjusted sales came in at $22.1 billion, up 9% year over year. Adjusted EPS grew 21% to $1.78. Full-year guidance was raised to $92.5B–$93.5B in adjusted sales and $6.70–$6.90 in adjusted EPS. The backlog hit a record $271 billion, up 25% year over year, and defense bookings in Q1 alone were $14 billion versus $9 billion the prior year. Raytheon munitions deliveries were up more than 40% year over year. RTX moves more on headlines than the other two, which can feel frustrating, but the underlying demand picture is not complicated. Patriot systems are being ordered faster than they can be shipped.
Slight tangent, but it connects: the rare earth situation is a real risk for all three names. China’s export controls on key minerals used in defense systems are not a background issue anymore. Supply chain exposure here is worth tracking, particularly for RTX and LMT. It is not a thesis-ender but it is a headline risk that is probably underpriced.
Northrop Grumman is the one that gets skipped in most conversations because it is less reactive to the news cycle. That is also exactly why it belongs in the mix. NOC carries a $95.6 billion backlog, reaffirmed 2026 revenue guidance of $43.5B to $44B, and EPS guidance of $27.40 to $27.90. Q1 2026 net earnings rose 82% to $875 million. The B-21 Raider production ramp is accelerating, backed by a $2 to $3 billion multiyear Air Force investment. Nuclear modernization programs run into the 2040s. A ceasefire in Europe or the Middle East does not cancel an ICBM replacement program. That distinction is the whole reason to own it.
Why Didn’t Your Bank Tell You This?
For decades, America’s biggest banks quietly used a powerful compounding strategy most families never heard about.
The results? $1,000 potentially growing into more than $556,000 since 2000.
It’s simple, legal, and now available to everyday investors.
The risk across all three is not demand. Demand is not the question. The question is execution. Backlogs at this size shift the pressure from winning business to delivering it, and that means labor constraints, material costs, and fixed-price contract exposure on programs like the B-21 are the things that can actually hurt you here. Any meaningful delivery miss or cost overrun moves these stocks fast regardless of what the Pentagon budget looks like.
Multi-year backlogs do not reset on a single headline. But single quarters can still be painful.
LMT is the core position. NOC is the long-duration anchor. RTX is where you add on weakness, not strength. European peers have already priced in a version of this world that assumes everything goes right. U.S. names have not. That gap is either a value opportunity or a warning. Right now the backlog data suggests it is the former – but that read could change if execution starts slipping.