Investing in defence stocks (or “defense stocks” if you’re from the other side of the Atlantic and happen to love sports and hot dogs) offers a unique opportunity to own a piece of the global military sector, which has historically provided stability and long-term growth.
With governments worldwide consistently allocating substantial budgets to national security, the sector remains resilient even during economic downturns. This guide will help you identify the best defence stocks and key global players, get a better understanding of the risks, and hopefully place you in a better position to make informed investment decisions about holding defence shares in your portfolio.
Unfortunately it’s impossible to predict what will be the best defence stocks in any given year. But, to give you some starting inspiration, here are the top holdings in the MarketVector™ Global Defense Industry Index along with some additonal options that are popular across UK trading apps.
| Defence stock | Icon | 1-year performance (to Aug. '26) | 5-year performance (to Aug. '26) | Link |
|---|---|---|---|---|
| Rheinmetall AG (RHM) |  |
-46.39% | 1,122.43% | More info |
| Rolls-Royce Holdings PLC (RR) |  |
41.58% | 1,406.77% | More info |
| Babcock International Group PLC (BAB) |  |
-6.16% | 242.17% | More info |
| BAE Systems plc (BA) |  |
-1.57% | 243.28% | More info |
| Booz Allen Hamilton Holding (BAH) |  |
-39.33% | -28.94% | More info |
| BWX Technologies (BWXT) |  |
30.83% | 214.55% | More info |
| Curtiss-Wright Corporation (CW) |  |
56.44% | 548.93% | More info |
| Leidos Holdings (LDOS) |  |
-33.49% | 0.26% | More info |
| Leonardo SpA (0ONG) |  |
19.89% | 728.65% | More info |
| Palantir Technologies (PLTR) |  |
-10.00% | 525.74% | More info |
| Qinetiq Group PLC (QQ) |  |
-8.99% | 30.22% | More info |
| Thales S.A. (HO) |  |
-11.29% | 151.20% | More info |
| Northrop Grumman Corporation (NOC) |  |
2.29% | 45.72% | More info |
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
If you're interested in investing in this industry, take a closer look at what companies in this industry do and how the stocks have historically performed. Keep in mind that positive past performance doesn't guarantee that a stock will continue to rise in the future.
Rheinmetall AG provides mobility and security technologies in Germany, Rest of Europe, North, Middle, and South America, Asia and the Near East, and internationally. The company operates through the Vehicle Systems, Weapon and Ammunition, and Electronic Solutions segments. Its Vehicle Systems segment offers combat, logistics, support, and special vehicles, including armored tracked vehicles, CBRN protection systems, artillery, turret systems, and wheeled logistics and tactical vehicles.
Rheinmetall is listed on the XETRA, has a trailing 12-month revenue of around €10.1 billion and employs 28,815 staff.
Capital at risk
Rolls-Royce Holdings plc designs and manages mission-critical power systems in the United Kingdom and internationally. The company operates through three segments: Civil Aerospace, Defence, and Power Systems. The Civil Aerospace segment develops, manufactures, markets, and sells aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as provides aftermarket services. The Defence segment is involved in the development, manufacture, marketing, and sale of military aero engines, naval engines, and submarine nuclear power plants, as well as offers aftermarket services.
Rolls-Royce is listed on the London Stock Exchange (LSE), has a trailing 12-month revenue of around £23.2 billion and employs 43,162 staff.
Capital at risk
Leonardo S. p. , an industrial and technological company, engages in the helicopters, defense electronics and security, cyber security and solutions, aircraft, aerostructures, and space sectors in Italy, the United Kingdom, rest of Europe, the United States of America, and internationally. It offers a range of helicopters for battlefield/personnel recovery, combat, maritime, training, VIP/executive transport, medical and rescue, energy, security, and utility services, as well as provides support and training services.
Leonardo is listed on the London Stock Exchange (LSE), has a trailing 12-month revenue of around €20.6 billion and employs 66,510 staff.
Capital at risk
Palantir Technologies Inc. builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations in the United States, the United Kingdom, and internationally. It provides Palantir Gotham integrates with other platforms for defense offerings which enables users to see, understand, and act in the modern battlespace; operations centers to the tactical edge; integrating data from domains and sensors in near real-time; and situational awareness and accelerating operational decision-making, as well as facilitates the hand-off between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.
Palantir Technologies is listed on the NASDAQ, has a trailing 12-month revenue of around $5.2 billion and employs 4,395 staff.
Capital at risk
Thales S. A. provides various solutions in the defence and security, aerospace and space, and digital identity and security markets worldwide. The company offers advance air defence systems, combat systems, defence onboard electronics c4isr solutions, command and control solutions, mission and surveillance systems, airborne optronics, and airspace protection solutions; collaborative combat, intelligence, connectivity and cloud, country and force protection, military vehicle, collaborative artillery, and augmented soldier solutions; robotics and drones; above-water combat, unmanned maritime, and underwater warfare systems; naval support and services; and joint systems.
Thales S-A is listed on the Euronext Paris (PA), has a trailing 12-month revenue of around €22.8 billion and employs 79,263 staff.
Capital at risk
Northrop Grumman Corporation operates as an aerospace and defense technology company in the United States, Asia/Pacific, Europe, and internationally. It operates through four segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The Aeronautics Systems segment designs, develops, produces, integrates, sustains, and modernizes aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic, surveillance and reconnaissance systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems.
Northrop Grumman Corporation is listed on the NYSE, has a trailing 12-month revenue of around $42.9 billion and employs 95,000 staff.
Capital at risk
Investing in defence stocks from the UK can paradoxically offer potential long-term stability and steady, given the worldwide appetite for strong defence sector spending and global defence partnerships. With major firms like BAE Systems and Rolls-Royce, the UK remains a key contributor to international defence and security.
However, investors should also consider international options for more diversification. You might also want to check out the best defence ETFs for a broader approach. But, it’s important to remember that the share price performance of defence stocks can depend on factors such as government budgets, geopolitical risks, and global conflict. Diversifying within the sector and staying informed on policy changes can help you stay ahead of the curve if you’re looking to buy defence stocks.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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