The U.S. government plans to increase defense spending significantly in 2026, but most plans haven’t resulted in contract awards or hiring yet. Defense stock prices reflect some anticipated spending. For investors, now may be the time to reassess portfolios to benefit from defense industry growth.

$150 billion of the proposed $1.01 trillion defense spending has already been appropriated, including the Golden Dome anti-missile initiative and modernizing the U.S. nuclear arsenal. Both House and Senate committees have advanced versions of the FY2026 Defense Appropriations Act. The National Defense Authorization Act was signed in December, a precursor to appropriations.

Various large initiatives are still awaiting federal funding, such as hypersonic weapons, F-47 fighter jets, increased missile production, cybersecurity, and a 30% boost in Space Force funding. The Defense Department has also asked companies about quickly building 300,000 drones, hinting at potential large contracts. An additional $113.3 billion may be provided to the Pentagon in FY2026.

Lockheed Martin and Northrop Grumman are poised to benefit from the Pentagon’s requests, with Lockheed seeking 245 PAC-3/MSE missiles and nearly $400 million for a new hypersonic weapon. Lockheed Martin has a low forward price-earnings ratio of 16, indicating potential growth opportunities.

Read more at Yahoo Finance: Top defense stocks profiting from our trillion dollar budget