Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. The company operates through Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space segments. The Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles, and related technologies. The Missiles and Fire Control segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support, and integration services; manned and unmanned ground vehicles; and energy management solutions. The Rotary and Mission Systems segment offers military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions. The Space segment offers satellites; space transportation systems; strategic, advanced strike, and defensive systems; and classified systems and services in support of national security systems. This segment also provides network-enabled situational awareness and integrates space and ground global systems to help its customers gather, analyze, and securely distribute critical intelligence data. It serves primarily serves the U.S. government, as well as foreign military sales contracted through the U.S. government. The company was founded in 1912 and is based in Bethesda, Maryland.

Lockheed Martin looks like a high-quality defense business with strong operating margins, but the valuation already reflects a significant portion of these strengths. A P/E of 18.78 is below the industry median, supporting the case for reasonable earnings, but a P/B of 13.41 and P/S of 1.81 are noticeably above industry benchmarks, which limits re-rating potential. P/FCF of 13.58 is below the median, so on free cash flow the company looks better than on balance-sheet and revenue multiples. Return on capital is very high: ROE of 86.24%, ROA of 10.40%, and ROI of 22.60% significantly outperform the industry, while operating margin of 11.88% and net margin of 8.16% also look solid. At the same time, gross margin remains weak relative to the median, indicating the specifics of the contract-based model and a limited gross cushion. The year-over-year trend is generally positive: revenue, operating profit, net income, EBITDA, and earnings per share have all increased compared with earlier periods, confirming the resilience of the business. At the same time, it is clear that some multiples have been volatile in recent quarters, and both P/B and leverage remain high, so the market is already pricing in strong expectations. Debt/Equity of 2.34 and long-term debt above $20 billion are notable risk factors, although liquidity does not look critical thanks to a current ratio of 1.19 and a quick ratio of 1.01. Equity is growing, but against the backdrop of high leverage this does not fully remove the question of financial leverage. Dividend yield fell to zero in the latest observation, removing one of the traditional supporting factors for investors. Overall, the fundamentals remain strong, but the combination of a high valuation on balance-sheet and revenue metrics with leverage limits upside. For a target price, this is more of a moderately negative adjustment, because the business quality is high, but the current market price already looks demanding in terms of further performance growth.

Lockheed Martin Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Слабый индекс, значительно упал. Рынок не поддерживает быков.

Weak index, significantly down. The market does not support the bulls.

Слабый индекс, незначительно упал

Strong profitability and growth in key metrics support LMT, but the high P/B and P/S valuations, as well as significant debt, limit revaluation potential.

Leidos Holdings, Inc. LDOS is expanding its Artificial Intelligence (AI) capabilities as government agencies and defense organizations increasingly adopt AI to improve decision-making, automate processes and manage large volumes of data. The company is integrating AI across defense, cybersecurity, logistics and other mission-critical applications, creating opportunities to benefit from the growing demand for secure and reliable AI solutions.
Leidos is using AI to support national security and defense operations by helping military customers analyze complex information and make faster, data-driven decisions. Its AI capabilities are also being applied to cybersecurity, where the company is developing solutions that can identify vulnerabilities and help organizations respond to emerging threats more efficiently.
The company is further expanding AI into military logistics, using predictive technologies to help customers anticipate requirements, improve resource planning and strengthen operational readiness. These efforts complement Leidos’ broader focus on digital modernization and mission-critical technology.
Leidos is also working with leading technology companies to accelerate the adoption of generative and agentic AI across government workflows. Its partnership with OpenAI, announced in January 2026, supports the company’s efforts to integrate advanced AI into areas such as national security, defense and digital modernization.
As AI adoption continues to grow across the defense sector, Leidos’ expanding AI capabilities and focus on secure, mission-critical applications position it well to benefit from the long-term shift toward AI-enabled government and military operations.
Other Companies Benefiting From AI Demand
Other companies that are likely to benefit from the expanding AI market are discussed below:
Northrop Grumman Corporation NOC: The company is integrating AI and machine learning into complex mission systems, including decision-support, autonomous systems and edge-processing applications. In March 2026, its Talon IQ autonomous testbed successfully flew with Shield AI’s Hivemind software, demonstrating the ability to integrate third-party AI systems into an open architecture.
Lockheed Martin Corporation LMT: The company is expanding AI across defense applications, including space-based systems and decision-support technologies. Its AI Fight Club provides a simulated environment for testing AI systems across air, land, sea and space, while recent efforts are focused on using AI to help warfighters process complex information and make faster decisions.
The Zacks Rundown for LDOS
Shares of LDOS have surged 15.4% in the past three months compared with the industry’s 4.5% growth.
Image Source: Zacks Investment Research
The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 0.96X compared with its industry’s average of 11.87X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for LDOS’ 2026 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
LDOS stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Is Leidos Strengthening Its Position in the Growing AI Market?

Key Points
Space Force awarded Rocket Lab a $397 million missile defense contract in August.
The new award is worth more than six months' revenue to Rocket Lab.
Rocket Lab (NASDAQ: RKLB) just keeps on stacking up wins -- and this time, literally so.
On Aug. 4, the space company announced the U.S. Space Force awarded it a $397 million contract -- one of the company's biggest wins ever -- to supply stackable "Flatellites" for the Space-Based Airborne Moving Target Indicator (SB-AMTI) program.
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What is a Flatellite, and what will it do?
Space Force describes SB-AMTI as a "resilient space-based system to detect and track airborne threats in real time" -- so missile-tracking satellites. For its part, Rocket Lab describes the Flatellite as a new satellite design intended to be manufactured in mass quantities and deployed in large numbers, stacked efficiently and integrated seamlessly into its new Neutron reusable medium-lift rocket.
Industry analysts estimate Rocket Lab could fit perhaps 16 of its 800-kilogram Flatellites onto each Neutron (with a payload capacity of 13 tons) that it launches.
What does this mean for Rocket Lab?
For years, Rocket Lab has been rolling up smaller companies in an effort to transform itself into a vertically integrated space company capable of building satellite parts, assembling them into satellites, launching them on its own rockets (which it also builds), and then operating them in orbit. It bought Sinclair Interplanetary for its star trackers in 2020, SolAero in 2022 for its solar arrays, Mynaric in 2026 for laser communications, and, most recently, promised to acquire Iridium Communications and its entire 80-satellite communications constellation for $8 billion.
The Space Force SB-AMTI contract illustrates how these integration efforts have paid off.
Government space contracts often involve multiple moving parts. One company (say, York Space or MDA Space) might be hired to build a satellite, a second company (Space Exploration Technologies or United Launch Alliance) to launch it, and sometimes a third company (Lockheed Martin or perhaps Boeing) to operate the satellites once they're in space.
That's not how this one will work. Rocket Lab will "develop, launch, and operate" all the Flatellites involved in SB-AMTI -- all on its own, vertically integrated, top to bottom. The entire $397 million of this effort will therefore go to Rocket Lab, shared with no one else, paid out to no subcontractors.
Granted, the contract announcement doesn't detail how the money will be allocated among Rocket Lab's several parts -- how much goes to the Launch Services business with its 41% gross profit margin, how much to Space Systems, which earns only 31%, or how much to any new divisions Rocket Lab might designate in the future, such as a "space services" division that provides Internet of Things (IoT) and navigation services from orbit, or a "Rocket Lab Defense" unit handling military contracts.
Viewed just in terms of revenue, however, the contract is already worth more than six months of the $769 million Rocket Lab already makes in a year. And that's not counting any options that might be added on to the company's missile defense work for Space Force. As Rocket Lab evolves even more to specialize in missile defense, we'll get a better idea of how profitable these kinds of contracts are for a fully vertically integrated Rocket Lab.
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Rocket Lab Wins One of Its Biggest Contracts Ever

Northrop Grumman Corporation NOC is strengthening its position in the growing military training and simulation market with advanced virtual, live and immersive training solutions. As military forces worldwide prepare for increasingly complex threats, demand for realistic, technology-driven training systems is rising. Northrop Grumman’s capabilities help warfighters improve mission readiness while providing cost-effective solutions to prepare for challenging operational environments.
A key area of focus is the company’s Live, Virtual and Constructive (LVC) training capabilities, which combine live exercises with virtual and computer-generated environments. Northrop Grumman also offers its Combat Electromagnetic Environment Simulator, which provides warfighters with realistic training against complex electromagnetic threats. These solutions enable military customers to conduct sophisticated training without relying entirely on costly live exercises, supporting more efficient and flexible mission preparation.
Notably, Northrop Grumman’s on-demand LVC training framework is integrated into training for both fifth-generation F-35 and fourth-generation F-16 fighter aircraft. The company also has experience integrating platforms into secure cross-domain environments spanning multiple military services. This expertise allows Northrop Grumman to support increasingly connected training environments and strengthens its competitive position as defense forces adopt advanced simulation and mission-readiness technologies.
As global defense spending increases and militaries focus on preparing for more advanced threats, demand for military training and simulation solutions is expected to remain strong. Northrop Grumman’s LVC capabilities, immersive training technologies and experience with secure, cross-domain environments position it well to benefit from the long-term expansion of the military training market.
Other Defense Companies Benefiting From Training Demand
Other defense companies that are likely to benefit from the expanding military training and simulation market are discussed below:
Lockheed Martin Corporation LMT: Its Close Combat Tactical Trainer (CCTT) is the U.S. Army’s first and largest distributed interactive simulation system. The platform enables military units to train and validate tactics, doctrine, weapons systems, mission planning and mission rehearsals in a simulated environment.
RTX Corporation RTX: Its high-fidelity simulation and training solutions support military readiness by combining advanced avionics expertise with training technologies. Its integrated simulators can blend real and virtual environments, helping military personnel prepare for complex missions in a cost-effective manner.
The Zacks Rundown for NOC
Shares of NOC have surged 8.9% in the past month compared with the industry’s 9.7% growth.
The company shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 1.77X compared with its industry’s average of 2.68X.
The Zacks Consensus Estimate for NOC’s 2026 and 2027 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
NOC stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Is Northrop Grumman Expanding Its Presence in Military Training?

Key Points
Space stocks rocketed in the run-up to SpaceX's June IPO -- then plummeted afterward.
Stock prices have stabilized and begun climbing higher this month.
Government contracts support the sector, but space stocks as a whole remain richly valued today.
Space stocks are in shambles.
"Led" (in a bad way) by Space Exploration Technologies (NASDAQ: SPCX), the space titan built by Elon Musk and IPOed on June 12, shares of space stocks of all stripes have taken a beating over the past couple of months.
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Take Rocket Lab (NASDAQ: RKLB) for example. The space company, often described as a mini-SpaceX, surged from below $5 in May 2024 to more than $140 in May 2026 -- a thirtyfold rise in just two years. Then it plunged more than 50% after the SpaceX IPO.
Or consider AST SpaceMobile (NASDAQ: ASTS), the satellite communications pioneer that proved the concept of cell phone-to-cell phone communications via satellite, with no towers in between. That one rose nearly twelvefold over the same two-year period -- then gave back 20% in the month following SpaceX's titanic IPO.
More targeted space plays such as Redwire Corporation (NYSE: RDW), which builds space infrastructure, and Intuitive Machines (NASDAQ: LUNR), focused on delivering cargo to the moon, gained fourfold in two years and nearly eightfold, respectively, before falling each falling roughly 70% in a month.
Can they bounce back?
SpaceX leads; others follow
Even SpaceX hasn't gone unscathed. After a first few frenzied days of trading that lifted Elon Musk's space empire past $211 a share, sellers arrived in force at SpaceX, driving the shares down nearly into the double digits.
The good news is that SpaceX appears to have found its footing again, closing at $140 Friday and once again above its IPO price. The better news is that many other space stocks are recovering, at least somewhat, alongside the leader.
The best news of all is that, with the U.S. government continuing to pour money into space exploration, there's reason to believe the momentum is sustainable.
NITE-STAR gazing
Case in point: Late last month, the U.S. Space Force announced a $981 million award to be shared among more than a dozen separate space stocks working on the "National Space Test and Training Complex Innovative Technology and Engineering Space Test and Range Capability Development" -- dubbed "NITE-STAR."
(Someone clearly worked overtime trying to make those words fit that acronym.)
Space Force named the following 15 space companies -- 13 of which are publicly traded -- as winners of NITE-STAR, clearing them to bid on future task orders under the umbrella contract, which will span 10 years:
It's not entirely clear what NITE-STAR will entail. The Space Force itself might not be 100% certain, describing the contract's goal vaguely as "advancement of the sophisticated systems and technologies required to keep [Space Force servicemen known as] Guardians ahead of the complexities of a contested space domain."
More importantly for investors, it's less than 100% certain anyone on the above list will book significant, needle-moving wins -- even on this nearly $1 billion contract.
What it means for space investors
Consider that $981 million, spread over 10 years, works out to just $98.1 million per year. And if contracts are evenly distributed, each of the 15 companies might, on average, expect to book as little as $6.5 million per year under the contract.
It goes without saying that $6.5 million won't move the needle for giant space companies such as Boeing, Lockheed, Northrop, or L3Harris. Smaller space-fry such as Firefly, Redwire, or York Space might notice the revenue influx more. But even at York, $6.5 million extra per year will only add about 1.5% to the company's $405 million-a-year revenue stream.
In short, big as this contract appears on the surface, it's not -- in and of itself -- going to be enough to turn things around and start a new bull market in space stocks. Many more contracts, and many much larger contracts, will be needed for that.
Meanwhile, a survey of 15 of the biggest space stocks that I follow shows an average price-to-sales ratio of 65.4. (Even throwing out triple-digit P/S outliers such as AST and Virgin Galactic (NYSE: SPCE) only brings the average P/S down to 19.8.) Valuations remain extreme in this sector.
Investors should be wary. Even after some pretty historic declines, space stocks as a whole aren't yet cheap enough to guarantee a bounce-back.
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Can Space Stocks Bounce Back? This $1 Billion Air Force Contract Might Help.

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Global X Adaptive US Factor ETF (Symbol: AUSF) where we have detected an approximate $127.0 million dollar outflow -- that's a 12.1% decrease week over week (from 20,010,002 to 17,580,002). Among the largest underlying components of AUSF, in trading today Verizon Communications Inc (Symbol: VZ) is up about 0.5%, Motorola Solutions Inc (Symbol: MSI) is down about 0.4%, and Lockheed Martin Corp (Symbol: LMT) is higher by about 1.4%. For a complete list of holdings, visit the AUSF Holdings page » The chart below shows the one year price performance of AUSF, versus its 200 day moving average:
Looking at the chart above, AUSF's low point in its 52 week range is $44.40 per share, with $52.6494 as the 52 week high point — that compares with a last trade of $52.32. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further AUSF Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy ETF Outflows: AUSF, VZ, MSI, LMT

RTX Corporation RTX continues to strengthen its position in the global missile market through its Raytheon business, supported by rising defense spending and growing demand for advanced precision weapons. The company offers a broad portfolio of missile and interceptor systems that address air-to-air, air defense, naval and long-range strike requirements.
RTX’s Raytheon business provides several combat-proven systems, including the Advanced Medium-Range Air-to-Air Missile (AMRAAM), AIM-9X, Tomahawk, Standard Missile and SM-6. These programs give RTX exposure to multiple areas of modern warfare, while its investments in next-generation technologies are helping expand its capabilities to address evolving threats.
Rising demand for missiles and interceptors is also encouraging RTX to expand production of several key systems. The company is increasing capacity for programs such as Tomahawk, AMRAAM and SM-6 as the United States and its allies seek to replenish inventories and strengthen their defense capabilities. This growing production base could provide greater visibility into future sales while helping RTX meet increasing customer requirements.
RTX’s missile business is benefiting from strong defense bookings, a record backlog and rising international demand. RTX ended the second quarter of 2026 with a record $289 billion backlog, up 22% year over year, including $119 billion in defense work. The company secured $43 billion in new awards, with nearly $20 billion at its Raytheon business, including more than $5 billion in GEM-T Patriot awards and $1.8 billion for AMRAAM. Recent SPY-6 and AIM-9X awards further highlight strong demand for RTX’s missile and defense systems. These developments position RTX well to benefit from continued growth in the global missile market.
Other Stocks to Keep on the Watchlist
Other aerospace and defense companies that are likely to benefit from the growing global demand for missile and defense systems are discussed below:
Lockheed Martin Corporation LMT: The company has a broad portfolio of missile and missile-defense programs, including PAC-3, THAAD, JASSM, Javelin and other advanced weapons. Its presence across air defense, precision strike and hypersonic technologies positions it well to benefit from rising defense investments.
Northrop Grumman Corporation NOC: The company develops advanced missile systems, propulsion technologies, sensors and command-and-control solutions for modern defense missions. Its capabilities in long-range strike, missile defense and advanced munitions provide exposure to the growing demand for next-generation weapons.
The Zacks Rundown for RTX
Shares of RTX have surged 43% in the past year compared with the industry’s 5.2% growth.
The company’s shares are trading at a discount on a relative basis, with its forward 12-month Price/Earnings being 29.19X compared with its industry’s average of 34.03X.
The Zacks Consensus Estimate for RTX’s 2026 and 2027 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
RTX stock currently carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is RTX Strengthening Its Position in the Global Missile Market?

Investors in Lockheed Martin Corporation LMT need to pay close attention to the stock based on moves in the options market lately. That is because the Sept. 18, 2026 $330 Call had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for Lockheed Martin shares, but what is the fundamental picture for the company? Currently, Lockheed Martin is a Zacks Rank #3 (Hold) in the Aerospace – Defense industry that ranks in the Top 35% of our Zacks Industry Rank. Over the last 60 days, two analysts have increased their earnings estimates for the current quarter, while three have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from $7.65 per share to $7.25 in that period.
Given the way analysts feel about Lockheed Martin right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Do Options Traders Know Something About Lockheed Martin Stock We Don't?

Lockheed Martin LMT is strengthening its position in the rapidly evolving space-defense market, with its Space business benefiting from increased demand for strategic systems and missile-defense technologies. During the second quarter of 2026, Space sales increased 6% year over year to $3.5 billion, with the majority of the increase coming from higher volumes on Fleet Ballistic Missile (“FBM”) and Next Generation Interceptor (“NGI”) programs.
The NGI program represents one of the most important opportunities within Lockheed Martin’s space-defense portfolio. NGI is being developed for the U.S. Missile Defense Agency as part of the country’s layered homeland missile-defense architecture. Lockheed Martin recently opened an 88,000-square-foot purpose-built facility in Alabama dedicated to NGI production, expanding the company’s manufacturing capacity for the program.
The investment is significant because increasing demand for advanced missile-defense systems will require not only sophisticated technology but also greater production capacity. Lockheed Martin has been investing heavily across its manufacturing network, with nearly $8-$9 billion of planned investment through 2030.
In May 2026, the company was selected by the U.S. Space Force’s Space Systems Command to develop capabilities supporting the Space-Based Interceptor program. The effort is designed to create an early engagement layer within a broader integrated missile-defense architecture, leveraging Lockheed Martin’s experience with NGI, THAAD, PAC-3 and missile-warning technologies.
The combination of FBM and NGI also illustrates the broader opportunity for Lockheed Martin. As governments place greater emphasis on homeland defense and the ability to counter increasingly sophisticated missile threats, demand for these capabilities could remain strong over the long term.
Companies Gain From Growing Space & Missile-Defense Demand
The growing emphasis on space-based defense, strategic systems and missile interception could benefit other defense companies with exposure to these markets.
Northrop Grumman’s NOC portfolio includes systems supporting national security, missile warning and space-based missions, giving the company exposure to rising government investment in next-generation defense capabilities.
RTX Corporation RTX could also benefit from sustained demand for missile-defense systems, advanced sensors and precision weapons. Its Raytheon business provides a broad portfolio of air and missile-defense solutions, while increasing investment in layered defense architectures could support demand for interceptors, radars and other mission-critical technologies.
LMT Stock’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates a year-over-year improvement of 31.31% and 8.35%, respectively.
LMT Stock Trades at a Discount
In terms of valuation, LMT’s forward 12-month price-to-sales (P/S) is 1.69X, a discount to the industry’s average of 2.66X.
Image Source: Zacks Investment Research
LMT Stock’s Price Performance
In the past three months, the company’s shares have risen 16.7% compared with the industry’s 11.2% growth.
Image Source: Zacks Investment Research
LMT’s Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
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Can Lockheed Martin's Space Business Become Its Next Growth Driver?

The Pentagon is currently pressing the U.S. defense contractors to accelerate weapon production dramatically. In a recent memo, deputy defense secretary Steve Feinberg gave major contractors just 21 days to submit plans for "significantly faster, more aggressive delivery schedules and/or increased production for critical capabilities" (as cited in CNBC).
This directive comes in the face of the U.S. military witnessing critical shortages in its munition stockpiles, with some key missile inventories depleted by over 65% following five months of war with Iran.
For investors, this confluence of urgent demand and mandated production increases creates a potentially lucrative entry point into the defense sector, particularly through diversified defense exchange-traded funds (ETFs) that offer broad exposure to the military contractors poised to benefit most from this massive replenishment cycle.
But before we highlight those fund names, investors may first want to assess the severity of the munitions depletion challenge and the extent to which the Pentagon’s production push could benefit defense contractors and, by extension, the funds that hold them.
The Depletion Crisis & Pentagon’s Stance
Empirically, U.S. weapons stockpiles, particularly missiles, have been critically depleted by the combination of sustained combat operations and prior commitments. According to a comprehensive analysis by the Center for Strategic and International Studies (“CSIS”), the war with Iran has consumed a staggering quantity of America's most advanced missile interceptors.
The pre-war inventory of Patriot interceptors, which stood at 2,330, has plummeted to an estimated 759-827 missiles, marking a reduction of approximately 65%. Similarly, THAAD interceptor stocks have fallen from 452 to just 234-278 units, a decline of at least 38%.
While the Iran conflict has become the primary source of pressure on U.S. missile inventories, current stockpile depletion has also been compounded by years of military aid to Ukraine, including the transfer of roughly 600 Patriot interceptors to help defend against Russian attacks.
To this end, the CSIS has warned that replenishing reserves for these critical weapons could take more than three years, creating a significant "window of vulnerability" if another major conflict were to erupt, particularly with China. Notably, CSIS estimates replenishment of stockpiles will take approximately 42 months for PAC-3 MSE interceptors and up to 53 months for THAAD systems.
This growing gap between supply availability and operational demand must have forced the Pentagon to aggressively push for a strong ramp-up in weapon production.
Benefits for Defense Majors & ETFs
The Pentagon's recent push for accelerated production translates directly into massive revenue growth opportunities for defense companies like Lockheed Martin LMT, RTX Corp RTX, Boeing BA and General Dynamics GD, which are the primary contractors for the missiles that suffered a depleted stockpile.
Lockheed, for instance, recently received a contract worth up to $58.6 billion to produce Patriot Advanced Capability-3 (PAC-3) MSE interceptors through fiscal 2032, while the Pentagon is working to triple Patriot production capacity and quadruple that for THAAD systems. RTX, which manufactures the Patriot system, and Lockheed Martin, which produces the PAC-3 interceptor, the latest version of the Patriot missile, are positioned to benefit substantially from these increased orders.
The accelerated procurement targets also include advanced radar systems from both companies, such as RTX's naval AN/SPY-6 and
Lockheed's land-based AN/TPY-6, ensuring sustained demand across multiple product lines.
The production surge extends to Boeing and General Dynamics, as the Pentagon seeks faster delivery of programs like the T-7A Red Hawk training aircraft and TAO-205 naval vessels.
As these production push served via multi-year defense contracts, they translate into strong backlogs and revenue expansion for the aforementioned defense stocks and ETFs holding them.
Defense ETFs to Buy
Considering the aforementioned discussion, this might be an ideal time for prudent investors to add the following ETFs to their portfolios to capture the upcoming rally in the defense industry without getting exposed to individual stock risk.
iShares U.S. Aerospace & Defense ETF ITA
This fund, with net assets worth $15.07 billion, offers exposure to 49 U.S. aerospace and defense companies, including manufacturers of commercial and military aircraft. GE Aerospace holds the first spot in this fund, with 21.44% weightage, while RTX holds the second spot with 16.92% weightage. BA holds the third spot in this fund, with 9.25% weightage, while GD holds the fourth spot with 4.68% weightage. LMT holds the fifth spot in this ETF, with 4.63% weightage.
ITA has gained 17.3% year-to-date and charges 37 basis points (bps) in fees. It traded at a volume of 0.37 million shares in the last trading session and holds a Zacks ETF Rank #2 (Buy).
Invesco Aerospace & Defense ETF (PPA
This fund, with a market value of $8.74 billion, offers exposure to 62 companies involved in the development, manufacturing, operations and support of U.S. defense, homeland security and aerospace operations. RTX holds the first spot in this fund, with 8.20% weightage, while BA holds the second spot with 7.01% weightage. LMT holds the fourth spot in this fund, with 6.52% weightage, while GD holds the fifth spot with 4.86% weightage.
PPA has rallied 17.5% year-to-date and charges 58 bps in fees. It traded at a volume of 0.12 million shares in the last trading session and holds a Zacks ETF Rank #2.
State Street SPDR S&P Aerospace & Defense ETF XAR
This fund, with assets under management (AUM) worth $6.62 billion, offers exposure to 47 aerospace and defense companies. Karman Holdings holds the first spot in this fund, with 3.44% weightage, while RTX holds the fourth spot with 3.20% weightage. GD holds the seventh spot in this fund with 2.94% weightage, while LMT holds the eighth spot with 2.91% weightage.
XAR has soared 21.2% year-to-date and charges 35 bps in fees. It traded at a volume of 0.11 million shares in the last trading session and holds a Zacks ETF Rank #2.
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Defense ETFs to Buy as Pentagon Pushes to Boost Missile Stockpiles

The Boeing Company’s BA shares have risen 7.4% year to date compared with the Zacks Aerospace-Defense industry’s growth of 7%. The government’s inclination toward strengthening the nation’s defense and space system should act as a growth catalyst for Boeing.
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Shares of other defense stocks, such as Lockheed Martin LMT and RTX Corporation RTX, have gained 23.6% and 21.9%, respectively, during the same time frame. Lockheed Martin’s record backlog, expanding munitions capacity and alignment with U.S. and allied defense priorities support durable growth. RTX’s strong backlog and new awards provide multi-year production visibility, while higher output, backlog conversion and favorable program mix are expected to support continued defense growth.
Considering Boeing’s outperformance relative to its industry, investors may be wondering whether now is a good time to add the stock to their portfolios. Let’s examine the factors that have driven the share price gains and assess the company’s investment prospects to make a more informed decision.
Tailwinds for BA Stock
Over decades, Boeing has built deep relationships with airlines, aircraft lessors, governments and defense customers, creating a broad installed base that generates recurring demand for maintenance, spare parts, pilot training and fleet upgrades. Its extensive product portfolio, particularly the 737 narrow-body family and the 787 Dreamliner wide-body aircraft, helped the company secure a strong position across major airline segments.
In the second quarter of 2026, Boeing Commercial Airplanes (“BCA”) delivered 171 airplanes, up 14% year over year and the highest quarterly total since 2018. Segment revenues increased 8% to $11.75 billion. Boeing booked 246 net commercial orders in the quarter and ended with a record $597 billion BCA backlog. The 737 program began transitioning production to 47 airplanes per month, and Boeing activated low-rate initial production on the North Line in July 2026.
The U.S. Navy MQ-25A Stingray completed its first flight and received Milestone C, clearing the program for low-rate initial production. The U.S. Air Force T-7A Red Hawk also achieved Milestone C and began low-rate initial production. Boeing reached a memorandum of agreement with the Air Force on KC-46A mission readiness and the Remote Vision System 2.0 retrofit, with the first phase of flight testing completed.
On Aug. 11, Wojskowe Zak??ady Lotnicze Nr 1 S.A. (WZL-1), the Military Central Bureau of Design and Technology S.A. and Boeing signed offset implementation agreements to establish long-term industrial cooperation supporting the maintenance and ground support of Poland’s AH-64E Apache helicopter fleet. Boeing can benefit from this agreement through its defense and services businesses, as Poland’s Apache fleet creates a long-term opportunity for maintenance, repair, overhaul, training and modernization.
Key Headwinds Facing BA Stock
The order book is growing, but slow production, delayed deliveries and ongoing inspections could be turning customers away from Boeing’s commercial airplanes, leading to recent order cancellations. Aircraft order cancellations during the six months ended June 30, 2026, totaled $2.78 billion and were primarily related to 737 aircraft. The 777X program has suffered repeated postponements and significant cost overruns.
The Boeing 777X program is running seven years late with an expected entry-level service date in 2027. These delays, caused by rigorous FAA scrutiny, design changes and part cracks, have resulted in significant cost overruns. Also, ongoing trade tensions between the United States and China pose another challenge. Any escalation in trade disputes could delay these deliveries, hurting revenues and increasing inventory costs.
Estimates for BA Stock
The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates a year-over-year improvement of 91.73%.
Image Source: Zacks Investment Research
The consensus estimate for Lockheed Martin’s 2026 EPS calls for year-over-year growth of 31.3%. The Zacks Consensus Estimate for RTX’s 2026 EPS implies a year-over-year rise of 14.8%.
BA’s Earnings Surprise History
The company beat on earnings in one of the trailing four quarters and missed in the other three, delivering an average negative surprise of 113.46%.
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BA Stock’s Liquidity
The company’s current ratio is 1.14 compared with the industry’s average of 1.12. The ratio of more than one suggests a healthy liquidity position where the business can meet its immediate financial obligations without selling long-term assets.
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BA Stock Trades at a Discount
In terms of valuation, Boeing’s forward 12-month price-to-sales (P/S) is 1.73X, a discount to the industry’s average of 2.67X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with that of its peer group.
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Conclusion
Boeing’s strong commercial aircraft franchise, growing defense production and expanding long-term sustainment partnerships are strengthening its recurring revenue potential and reinforcing future growth across both commercial and defense markets.
Considering current execution challenges, new investors should wait and look for a better entry point. Investors who already own this Zacks Rank #3 (Hold) stock may consider retaining it, given the company’s price performance, strong earnings growth and solid liquidity. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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