Look, I get it. When someone starts talking about defense stocks, your brain probably goes straight to “war profiteering” and you start feeling icky. But hear me out – this isn’t about rooting for conflict. It’s about recognizing that in a world where everyone’s getting a little trigger-happy with their military budgets, some companies are positioned to absolutely crush it.
Scott Helfstein from Global X ETFs (they manage $60 billion, so they’re not exactly playing with Monopoly money) just dropped his top 5 defense picks for 2026. And honestly? The guy makes some solid points about why this sector is heating up.
“We’re moving to a world of decentralized deterrence,” Helfstein says, which is fancy talk for “everyone’s building their own military toys instead of relying on the US to be the world’s security guard.” Smart money is betting this trend continues.
Here are his top picks:
Huntington Ingalls Industries (HII) – These guys build ships for the Navy, and they’re up 85% this year. Helfstein thinks we’re about to see autonomous ships become the new drones. Makes sense – if we can have robot planes, why not robot boats?
BAE Systems (BAESY) – This UK powerhouse is up 64% and trades at 19x forward earnings with a 4% free cash flow yield. Translation: it’s not stupidly expensive and actually makes money. Revolutionary concept, I know.
Rheinmetall (RNMBY) – The German arms maker that’s absolutely on fire with a 190% gain this year. As Europe gets more independent from US military support, companies like this become the go-to suppliers.
Lockheed Martin (LMT) – Yeah, it’s down 1% this year, but that might be exactly why Helfstein likes it. Sometimes the best opportunities are hiding in plain sight, especially when the US defense budget keeps growing like a teenager’s appetite.
BWX Technologies (BWXT) – Up 57% and playing in both defense and civilian nuclear markets. It’s like getting two growth stories for the price of one. Nuclear submarines, nuclear power plants – this company’s got both covered.
The thesis is pretty straightforward: geopolitical uncertainty isn’t going anywhere, defense budgets are swelling globally, and these companies are the ones building the stuff everyone wants to buy.
Now, I’m not saying throw your life savings at defense stocks tomorrow. But if you’re looking for sectors that might benefit from the current global “trust nobody” vibe, this could be worth a look. Just remember – past performance doesn’t guarantee future results, and all that other fine print your financial advisor would want me to mention.
The world’s getting weird, folks. Might as well profit from it responsibly.