Investing in Defense: Top Stocks to Watch During Operation Epic Fury

Investing in Defense: Top Stocks to Watch During Operation Epic Fury :In late February 2026, the global geopolitical landscape shifted dramatically with the commencement of Operation Epic Fury. As U.S. and partner forces engage in precision operations to dismantle regional threats and secure global shipping lanes, the defense sector has transitioned from a steady “value play” to a high-momentum “growth engine.”

For U.S.-based investors, the surge in military activity and the subsequent replenishment of depleted stockpiles have created a unique investment environment. Here is a look at the top defense stocks currently positioned to benefit from the increased demand for precision munitions, missile defense, and strategic airpower.

Investing in defense stocks during Operation Epic Fury requires a strategic look at the primary contractors currently seeing record-breaking volume. Market leaders like Lockheed Martin (LMT), Northrop Grumman (NOC), and RTX Corporation (RTX) have emerged as the dominant players, with the State Street Aerospace and Defense ETF (XAR) recently hitting all-time highs as a result of the military surge. For investors navigating this volatility, these “Big Three” represent the core of the U.S. defense infrastructure, benefiting from increased demand for combat power and advanced surveillance systems. As geopolitical tensions drive safe-haven capital into gold and defense benchmarks, tracking these specific equities is essential for those looking to hedge against broader market risk during the ongoing conflict in the Middle East.

Image Source: Canva AI

1. RTX Corporation (RTX) – The Interceptor Leader

Formerly Raytheon, RTX is currently at the heart of the “replenishment cycle.” As Operation Epic Fury utilizes massive quantities of precision-guided munitions and defensive interceptors, RTX’s role has become mission-critical.

Key Asset: The Patriot Missile Defense System. With interceptor demand at an all-time high, RTX recently secured a massive contract expansion for Standard Missile-3 (SM-3) variants.
The Investment Case: RTX boasts a record-breaking backlog of approximately $268 billion. Beyond missiles, its Collins Aerospace and Pratt & Whitney divisions provide essential components for nearly every tactical aircraft in the U.S. fleet.
Outlook: As the U.S. military pivots toward defending against hypersonic threats and swarms of drones, RTX’s investment in Hypersonic Attack Cruise Missiles (HACM) makes it a top-tier long-term hold.

2. Lockheed Martin (LMT) – The Backbone of Air Superiority

When the “opening salvo” of a campaign involves stealth and overwhelming air power, Lockheed Martin is the primary beneficiary. The company remains the world’s largest defense contractor, and its platforms are the literal face of modern warfare.

Key Asset: The F-35 Lightning II. As the backbone of allied air forces, the F-35 represents a multi-decade revenue stream through production and long-term sustainment.
Missile Defense: Their PAC-3 and THAAD systems are seeing robust 14% revenue growth as allies in Europe and the Middle East scramble to upgrade their defensive shields.
Financial Health: With a backlog of $194 billion, Lockheed offers profound stability and a reliable dividend yield (currently around 2.2%), making it a “safe haven” within the aerospace sector.

Go to Homepage

3. Northrop Grumman (NOC) – Strategic Modernization

While tactical missiles win battles, strategic deterrence prevents larger escalations. Northrop Grumman occupies the most high-tech, high-security niche in the defense industrial base.

Key Asset: The B-21 Raider. This next-generation stealth bomber is a top priority for U.S. defense strategy. Reports indicate an impending agreement to accelerate the B-21’s production schedule in response to the 2026 conflict.
Space & Tech: Northrop is a leader in space-based missile tracking and unmanned systems (drones). As the “tech-heavy” arm of the Big Three, they are essential for the intelligence and surveillance needs of Operation Epic Fury.
Market Position: Trading at a healthy P/E ratio relative to its peers, NOC is often seen as the “quality” pick for investors looking for exposure to the Pentagon’s most secretive and vital programs.

Image Source: Canva AI

The “New Safe Havens”: Small-Cap & Specialized Plays

While the “Primes” (RTX, Lockheed, Northrop) grab the headlines, several specialized firms are seeing explosive growth due to the unique nature of 2026 warfare:

L3Harris Technologies (LHX): Focuses on “on-orbit” systems capable of tracking hypersonic missiles—a direct response to the threats faced during the current conflict.
AeroVironment (AVAV): A leader in loitering munitions (kamikaze drones), which have become the defining weapon of the 2020s.
General Dynamics (GD): Essential for naval power and ground combat vehicles, GD’s submarine programs are seeing renewed interest as maritime security becomes a global priority.

Image Source: Canva AI

Why the Defense Sector is Different in 2026

Investors should note that this isn’t just a “war rally.” Several structural shifts are keeping valuations high:

Massive Order Backlogs: Most major contractors have enough work to last into the 2030s.
Bipartisan Support: Defense spending has seen consistent increases, regardless of the political climate in Washington.
Global Replenishment: It isn’t just the U.S. buying; NATO and Pacific allies are ordering billions in American hardware to secure their own borders.

Final Verdict for Investors

The defense sector is currently behaving like the “New Tech.” With record backlogs and high-tech innovation driving the market, companies like RTX and Lockheed Martin offer a rare combination of growth potential and defensive stability. As Operation Epic Fury continues, the focus will remain on those who can produce at scale and deliver the next generation of precision power.