Global military expenditure surged by almost 10% from 2023 to 2024, reaching $2.7 trillion. This increase, the fastest since the Cold War, is driven by ongoing conflicts in Eastern Europe and the Middle East, sparking a race towards defense growth worldwide.

L3Harris Technologies Inc. is rapidly advancing technologically, with recent partnerships and successful satellite launches. The company exceeded earnings expectations in Q2 of 2025 and saw record revenue from its integration with Aerojet Rocketdyne. Analysts remain bullish on L3Harris, predicting a 12% earnings increase in the coming year.

Kratos Defense & Security Solutions Inc. reported strong mid-year earnings, with revenue growing by 17% year-over-year. The success of its Valkyrie tactical drone and large contract pipeline, including the Poseidon program, has boosted performance. Despite a significant rally in share price, analysts remain supportive of Kratos.

TransDigm Group Inc., a major aircraft component manufacturer, missed earnings expectations due to issues with Airbus and Boeing. Defense revenue showed a 13% year-over-year increase, generating $630 million in cash flow. Despite the disappointing earnings, analysts see upside potential in TransDigm shares and recommend monitoring the stock.

Read more at Nasdaq: Next-Gen Defense: 3 Stocks Riding the New Global Arms Race