As Trump Pushes a Bigger Iran War Budget, 3 Core Defense Holdings Stand Out for Patient Investors
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President Donald Trump is pushing for a larger US military budget amid the Iran conflict, benefiting defense companies like Lockheed Martin, Northrop Grumman, and RTX Corp. These companies have established programs and long-term contracts, making them attractive to patient investors.
The US military budget is expected to increase to $1.5 trillion in 2027, driven by the Iran conflict. Lockheed Martin is well-positioned to benefit from this increase, with a $4.7 billion contract to produce Patriot interceptor missiles and a seven-year agreement to increase production capacity. The company's F-35 program is also a major growth catalyst, with demand for 3,500 jets from the US and allied nations. Lockheed Martin's strong financials, including $6.9 billion in free cash flow in 2025, and a 23-year streak of dividend increases, make it an attractive investment. Northrop Grumman and RTX Corp. are also poised to benefit from the increased military spending, with multiyear programs like Sentinel and the B-21. These defense companies have established programs and long-term contracts, making them critical to national security infrastructure.
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