Despite the U.S. growing its debt in the trillions annually, the government is not holding back on its military spending plans.
On January 8, President Trump proposed a $1.5 trillion ‘Dream Military’ buildout. The post called for the military to keep the U.S. safe and secure, regardless of the foe. This sent shares of General Dynamics (GD), RTX (RTX), Lockheed Martin (LMT), and Northrop Grumman (NOC). Those are the stocks that investors should watch. Their revenue will continue to expand as the U.S. increases their defense budget.
Before that post, the U.S. president questioned the salary levels of executives at those firms. Regardless, fundamentals are attractive for firms like General Dynamics. The firm already has a $110 billion backlog. Shares are undervalued. They have the potential to grow in the naval shipbuilding sector.
RTX won a bid along with Indra Sistemas, a Spanish-based firm, to supply the U.S. government with new radar systems. The contract is worth $12.5 billion.
LMT stock experienced a surge from a sub-$450 level to close at $542.92 last week. Analysts at Truist wrote that an improved operational performance this year would justify a price target hike. The firm set a $605 price target, up from its previous target of $500.
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