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 – Scott Helfstein from Global X ETFs (they manage $60 billion, so they’re not exactly running a lemonade stand) thinks these stocks are about to absolutely rocket in 2026.
Here’s the deal: The world is getting weird. Like, really weird. And when things get geopolitically spicy, countries start throwing money at their military budgets faster than you can say “national security strategy.” It’s not pretty, but it’s reality.
The “Why Now?” Part
Helfstein isn’t just throwing darts at a board here. He’s seeing a shift toward what he calls “decentralized deterrence” – basically, everyone’s realizing they can’t just rely on their big brother (looking at you, Europe and the US) to handle all the heavy lifting anymore.
Plus, there’s this whole autonomous warfare thing happening. Remember how drones went from “cool military gadget” to “everywhere” in like five minutes? Well, now they’re doing the same thing with ships. Autonomous naval warfare is apparently the new hotness.
The Shopping List
So what’s Helfstein buying? Here are his top five picks:
Huntington Ingalls (HII) – These guys build ships for the Navy and they’re up 85% this year. Not bad for a Tuesday. They’re positioned perfectly for this whole “robots at sea” revolution.
BAE Systems (BAESY) – The UK’s defense darling, up 64% in 2025. As Europe gets more independent militarily, BAE is sitting pretty with solid fundamentals and a 4% free cash flow yield.
Rheinmetall (RNMBY) – German engineering meets military tech, and it’s been absolutely bonkers with a 190% return this year. Europe’s military independence theme strikes again.
Lockheed Martin (LMT) – The old reliable. Sure, it’s been flat this year (-1%), but Helfstein sees it as attractively priced. Sometimes the boring pick is the smart pick.
BWX Technologies (BWXT) – Up 57% and playing both sides of the nuclear game – military submarines and civilian nuclear power. It’s like getting two growth stories for the price of one.
The Bottom Line
Look, nobody’s rooting for global conflict here. But if you’re going to invest, you might as well acknowledge reality: defense spending is going up, technology is changing warfare, and some companies are going to make bank from it.
Just remember – these aren’t “set it and forget it” investments. Geopolitics can shift faster than Twitter sentiment, and defense stocks can be volatile as hell. But if Helfstein’s right about this trend, these five picks might just be the portfolio boost you didn’t know you needed.
Disclaimer: This isn’t financial advice, just one person’s take on what a very smart strategist is thinking. Do your own research, people.