Defense Stocks Are Booming — These Are the 2 Hottest Contractors to Buy for 2026

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RTX’s backlog hit a record $251B.Kratos Defense & Security Solutions (KTOS) shares soared 196% in 2025 as unmanned segment revenue grew 35.8% in Q3.If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more hereDefense contracts have risen sharply in recent years as global security challenges intensify. The ongoing war in Ukraine and escalating tensions in the Middle East have prompted European nations and other allies to replenish depleted munitions and expand their military capabilities. NATO members have committed to higher spending targets, with many countries boosting budgets to address immediate threats and long-term deterrence needs.In the U.S., the War Department is focusing on replenishing stockpiles drawn down by support for Ukraine while maintaining readiness against potential adversaries. This environment of elevated government spending has created strong demand for advanced defense systems, especially this past year.Following President Trump's election in 2024, he implemented broader budget cuts in some areas, but defense budgets rose as the administration focused on global security challenges and modernizing military capabilities. In particular, spending on advanced technologies, such as artificial intelligence, cybersecurity, and autonomous systems, was prioritized. With the National Defense Authorization Act (NDAA) just signed into law, over $900 billion in funding was authorized, signaling a deliberate push to accelerate delivery on capabilities.Among the contractors positioned to benefit from this influx of government spending, both at home and abroad, two stand out for their growth potential heading into 2026: RTX (NYSE:RTX) and Kratos Defense & Security Solutions (NASDAQ:KTOS).RTX has seen its stock climb 60% through 2025, reaching all-time highs near $185 per share as defense orders surged. The company's Raytheon segment reported a book-to-bill ratio of 2.27 in the third quarter, meaning new orders were double shipments, reflecting robust demand for missile systems amid a global rearmament.Key contracts highlight this momentum: Just this month, Raytheon secured a $1.7 billion deal to supply Spain with four Patriot fire units -- the largest such order for that country -- while other awards included sustainment support for Patriot systems and contributions to programs like NASAMS for allies. RTX's overall backlog hit a record $251 billion in Q3, providing multi-year revenue visibility for the second-largest defense contractor.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,978.25 -1.00 (-0.01%)Dow Futures49,019.00 +21.00 (+0.04%)Nasdaq Futures25,859.25 -4.00 (-0.02%)Russell 2000 Futures2,554.30 +2.90 (+0.11%)VIX13.60 +0.13 (+0.97%)Gold4,535.40 -17.30 (-0.38%)Trending tickersBTC-USD Bitcoin USD 89,995.48 +2,261.23 (+2.58%)ETH-USD Ethereum USD 3,042.13 +100.55 (+3.42%)NQ=F Nasdaq 100 Mar 26 25,859.25 -4.00 (-0.02%)XRP-USD XRP USD 1.91 +0.04 (+1.94%)YM=F Mini Dow Jones Indus.-$5 Mar 26 49,019.00 +21.00 (+0.04%)PortfolioSign in to access your portfolioSign inTop gainersELPC Companhia Paranaense de Energia 9.65 +0.79 (+8.92%)PSLV Sprott Physical Silver Trust 26.04 +2.08 (+8.68%)ZETA Zeta Global Holdings Corp. 20.70 +1.59 (+8.32%)CPNG Coupang, Inc. 24.27 +1.47 (+6.45%)XPEV XPeng Inc. 20.78 +1.21 (+6.18%)Top losersRGC Regencell Bioscience Holdings Limited 21.16 -3.44 (-13.98%)FLY Firefly Aerospace Inc. 23.34 -3.70 (-13.68%)TMC TMC the metals company Inc. 6.82 -0.80 (-10.50%)AAOI Applied Optoelectronics, Inc. 37.17 -3.83 (-9.34%)RGTI Rigetti Computing, Inc. 22.38 -2.13 (-8.69%)Most activeNVDA NVIDIA Corporation 190.53 +1.92 (+1.02%)TSLA Tesla, Inc. 475.19 -10.21 (-2.10%)PLUG Plug Power Inc. 2.0700 -0.0300 (-1.43%)ONDS Ondas Holdings Inc. 8.48 -0.65 (-7.12%)NIO NIO Inc. 5.10 +0.19 (+3.87%)Top economic eventsEarnings eventsMy earnings eventsEarnings events