President Trump's proposal to cut US defense spending led to a drop in defense stocks

From Yahoo Finance: 2025-03-30 19:16:00

President Trump’s statement proposing a reduction in US defense spending led to a drop in defense stocks. He suggested cutting the defense budget in half, expressing the need for a strong military while aligning with broader efforts to reduce government expenditures. Uncertainty remains on the potential impact of these proposals.

Despite the mixed signals from the White House, the defense industry is embracing technological advancements like AI and drones. Morgan Stanley’s report highlights a record-high global military expenditure of $2.4 trillion in 2023, with significant growth driven by innovations in defense technology. This resurgence presents investment opportunities across various sectors.

Moog Inc. (NYSE:MOG-A) is among the best aerospace and defense stocks to buy, with a strong financial performance in the fiscal first quarter of 2025. The company reported growth in aerospace and defense sales, with a record $1.3 billion in bookings. Moog Inc. secured a major contract with Lockheed Martin, reinforcing its position in the industry.

Amidst the potential of aerospace and defense stocks, AI investments are gaining traction for higher returns. While Moog Inc. presents a solid investment opportunity, AI stocks are seen as more promising for faster growth. Investors looking for AI stocks with significant upside potential should explore opportunities beyond traditional defense sectors.

Read more: Among the Best Aerospace and Defense Stocks to Buy According to Analysts