Global defense spending is climbing sharply, driven by active conflicts, depleted weapons stockpiles, and surging government budgets across multiple nations.
The 2027 National Defense Authorization Act proposes $1.1 trillion in U.S. defense and national security funding, a figure that could grow even larger.
A separate $350 billion reconciliation package could push total American defense spending to nearly $1.5 trillion next year.
Two defense contractors, Lockheed Martin (LMT) and RTX (RTX), are positioned to capture a significant share of those expanding budgets.
Both companies operate major air and missile defense businesses with international reach and backlogs that provide strong multi-year revenue visibility.
Lockheed Martin is best known for the F-35 Lightning II stealth fighter, which accounts for roughly 28% of total company revenue and is produced at approximately 156 aircraft per year.
The F-35 is expected to remain in active service through at least 2070, guaranteeing Lockheed decades of lucrative maintenance and upgrade contracts.
On June 24, the Missile Defense Agency awarded Lockheed a seven-year contract worth up to $35 billion to quadruple manufacturing rates for its Terminal High Altitude Area Defense system.
Frontline strike platforms are also generating significant procurement awards, including for the Precision Strike Missile, Guided Multiple Launch Rocket System, and High Mobility Artillery Rocket System launchers.
Lockheed also secured a U.S. Space Force contract to build Space-Based Interceptor prototypes for the Golden Dome missile shield, expanding its footprint in next-generation defense architecture.
The company’s backlog has reached a record $230 billion, and UBS recently upgraded the stock to a buy rating, forecasting 9% annual revenue growth through 2028 driven by munition and missile volume.
LMT shares have fallen nearly 25% from their 52-week high, giving long-term investors an opportunity to buy into one of the world’s premier defense franchises at a discounted valuation.
RTX operates across three business segments, Raytheon, Pratt & Whitney, and Collins Aerospace, providing a more diversified portfolio than most pure-play defense contractors.
Through Raytheon, RTX manufactures the Patriot air defense system, advanced missiles, naval and land radars, and directed-energy weapons that are in high demand globally.
International orders now account for 48% of Raytheon’s $86 billion defense backlog, reflecting the breadth of RTX’s global customer relationships.
RTX’s total backlog has reached a record $289 billion, combining its defense and commercial aerospace operations into one of the largest order books in the industry.
Through Pratt & Whitney, RTX supplies aircraft propulsion systems for commercial jets and for the F-35 Lightning II, generating recurring high-margin aftermarket revenue.
Rising global conflicts, particularly in Iran and Ukraine, have severely depleted stockpiles of missiles, counter-drones, and air defense systems, intensifying demand for both companies’ core products.
Both LMT and RTX carry order books that extend revenue visibility well into the next decade, making them compelling considerations for investors seeking exposure to the defense sector.
