Defense stocks have taken center stage in early 2026, propelled by a confluence of geopolitical tensions, surging military budgets, and a renewed focus on advanced technologies. According to MarketBeat, as of January 3, 2026, the five defense stocks drawing the most attention—Boeing, Rocket Lab, GE Aerospace, RTX, and Sidus Space—have all experienced the highest dollar trading volumes in recent days. This surge comes on the heels of the U.S. government’s dramatic move to oust Venezuelan leader Nicolas Maduro, a decision that has sent ripples through global markets and heightened investor interest in the defense sector.
The defense industry is often seen as a safe harbor during times of uncertainty. As MarketBeat explains, shares of companies involved in military, aerospace, homeland security, and government-defense programs typically generate steady revenue from government contracts. This stability can help them outperform or at least hold their ground when other sectors falter, especially during economic slowdowns or spikes in geopolitical risk.
Each of the top five companies identified by MarketBeat brings a unique set of capabilities to the table. Boeing, for example, operates through three major segments: Commercial Airplanes; Defense, Space & Security; and Global Services. The company’s portfolio includes everything from military aircraft and satellites to missile defense and human spaceflight systems. Rocket Lab, meanwhile, has carved out a niche in the space sector, providing launch services, spacecraft design and manufacturing, and constellation management for both space and defense clients. GE Aerospace, formerly known as General Electric, splits its business between Commercial Engines and Services and Defense and Propulsion Technologies, offering jet and turboprop engines and integrated systems for a wide range of aircraft, both military and commercial.
RTX Corporation, which operates the Collins Aerospace, Pratt & Whitney, and Raytheon segments, delivers cutting-edge aerospace and defense products and services to civil and military customers around the globe. Sidus Space, the smallest of the five, has positioned itself as a "space-as-a-service" provider, specializing in satellite manufacturing, Low Earth Orbit (LEO) launch and deployment, and space-based geospatial intelligence and data analytics.
This heightened investor interest in defense stocks is not happening in a vacuum. As reported by Nasdaq on January 6, 2026, the sector’s recent surge follows the U.S. action in Venezuela and a broader backdrop of rising global tensions. The sector had already performed strongly in 2025, buoyed by escalating defense spending as conflicts simmered across multiple regions. President Trump’s revival of the Monroe Doctrine—a 19th-century policy asserting U.S. dominance in the Western Hemisphere—has further underscored the administration’s willingness to take bold action in the region. Trump has also pointed to Colombia, Cuba, and even Greenland as areas of strategic interest, famously stating, “We need Greenland, from the standpoint of national security.”
These moves have not gone unnoticed by global observers. Some experts warn that the U.S.’s assertive stance could embolden China to act more aggressively toward Taiwan or encourage Russia to adopt a more confrontational posture. The world is witnessing a new era of rearmament, with tensions flaring between China and Taiwan, India and Pakistan, and ongoing conflicts across the Middle East. According to Global X, global defense spending could soar to $3.6 trillion by 2030, a 33 percent jump from 2024 levels, as nations race to invest in artificial intelligence, autonomous drones, and sophisticated cyber defenses.
Within the United States, defense spending remains a rare point of bipartisan consensus. Lawmakers from both sides of the aisle support robust military budgets, recognizing the need to maintain technological superiority and global readiness. This alignment has provided a powerful tailwind for defense companies, with MarketBeat noting that these stocks often attract investors looking for stability amid market turbulence.
European defense stocks, too, have been on an upward trajectory since the onset of the Russia–Ukraine war. Governments across the continent have ramped up military spending, partly in response to pressure from the Trump administration. The sector saw a brief pullback late last year as signs of progress emerged toward ending the conflict in Ukraine, but the overall trend remains upward as new threats and uncertainties continue to emerge.
Meanwhile, the commercial aerospace business is enjoying its own renaissance. As Nasdaq points out, global air traffic is on the rise, fueled in large part by the expanding middle class in emerging economies. This growth is expected to provide a long-term boost for companies like Boeing and GE Aerospace, whose commercial aviation segments stand to benefit from increased demand for new aircraft and related services.
For investors seeking broader exposure, exchange-traded funds (ETFs) have become a popular vehicle. Top holdings in major aerospace and defense ETFs—such as the iShares U.S. Aerospace & Defense ETF (ITA), SPDR S&P Aerospace & Defense ETF (XAR), Global X Defense Tech ETF (SHLD), and Select STOXX Europe Aerospace & Defense ETF (EUAD)—include GE Aerospace, Lockheed Martin, Northrop Grumman, Boeing, and Palantir. These funds offer diversified access to the sector’s leading players and have seen significant inflows as the defense theme gains traction.
Despite the bullish sentiment, MarketBeat’s analysts caution that investors should do their homework. While Boeing currently holds a Moderate Buy rating, the firm notes that top-rated analysts believe there may be better buys among the five highlighted stocks. In addition, MarketBeat recently released its top five short plays for January 2026, underscoring the importance of understanding both the opportunities and risks in the current market environment.
What’s driving this renewed focus on defense? At its core, it’s a combination of old and new threats—traditional military rivalries layered with emerging risks from cyber warfare, unmanned systems, and rapid technological change. As governments and companies alike scramble to adapt, the defense sector finds itself at the crossroads of innovation and security, with far-reaching implications for investors, policymakers, and ordinary citizens.
With global defense budgets on the rise, new technologies reshaping the battlefield, and geopolitical flashpoints multiplying, the momentum behind defense stocks shows little sign of abating. Whether this trend continues will depend on a host of unpredictable factors—from diplomatic breakthroughs to technological disruptions—but for now, the sector is firmly in the spotlight.