In what has been described as “Europe’s darkest hour since World War II,” Russian troops mounted a full-scale attack by land, air and sea, invading Ukraine. Heavy artillery fire has been reported, while command centers in the Ukrainian cities of Kyiv and Kharkiv have been hit by missile strikes.
“Russia alone is responsible for the death and destruction this attack will bring,” President Joe Biden said. “The United States and its allies and partners will respond in a united and decisive way. The world will hold Russia accountable.”
While Biden and other world leaders craft their responses, the conflict is pushing financial markets down. In this turmoil, defense stocks have been a bright spot. Here are the top stocks to buy now.
Defense Stocks to Buy: Axon (AXON)
This company reports fourth-quarter earnings today. That’s a small part of the reason it has been rising lately. A much larger reason has been the market momentum driven by a brewing global conflict. For investors, companies like Axon, which produces TASER-branded weapons, represent a unique opportunity. Axon has worked with all branches of the military and provided technology to law enforcement agencies. According to the Government and Military Solutions section of its website, its weapons have kept over 140,000 service members safe.
Axon picked an excellent time to expand its global reach. Earlier this month, the company announced the opening of its first European office of research and development (R&D) in London. Already well-positioned to help supply the U.S. military with important technology, this new office may open it up to global deals as well. The company has been making advances in body camera and taser technology. Both products will likely be in demand if the global conflict continues to escalate. Axon has done well providing for the modern police agency, and its weapons and training-centric business model will serve it well in a time of war.
Lockheed Martin (LMT)
Earlier this month, InvestorPlace contributor Josh Enomoto noted that meeting each step made by Russia was “crucial for global security and cynically positive for defense stocks.”
Since then, it seems investors are betting that this stance will benefit defense stocks. Lockheed Martin is a leader in the defense contracting space and a blue-chip stock. With this in mind, InvestorPlace contributor Muslim Farooque also named it to a list of defense stocks to buy.
Plus, as he noted, there were plenty of reason for LMT to soar beyond Russia-Ukraine tensions. Lockheed beat its 2021 delivery goal for the F-35 fighter jet and added both Finland and Switzerland to its list of international clients. Its core business serving the U.S. Department of Defense and other federal government agencies is another positive.
Lockheed’s expertise doesn’t just include military vehicle production. It spans almost every area of defense, such as weapon systems, aerospace technology and cybersecurity. Any time the U.S. is involved in a conflict, it is a safe bet that LMT will be among the winners. It is a clear pick now among defense stocks to buy.
Defense Stocks to Buy: Northrop Grumman (NOC)
InvestorPlace analyst Louis Navellier advised investors that Northrop Grumman is equally attractive as Lockheed Martin. It’s not hard to see why.
Like its peer, Northrop is one of the country’s leading defense contractors and it has benefitted from its tech-focused business model. Yesterday, investors learned it received a $341 million contract from the U.S. Space Force.
Northrop is a dynamic company with plenty of other divisions beyond space. It receives praise for advances in robotic technology, which is increasingly relevant. Last week it was reported that the global market for artificial intelligence robots is expected to reach $21.4 billion by 2026. A significant portion of this is driven by the U.S. military’s increasing investment in automation and AI tech. As Enomoto also speculates, Northrop products such as the MQ-4C Triton drone could position the company to strongly benefit as military reliance on drone technology increases.
Northrop helps protect the U.S. from air, land, and sea attacks, and it also has robust cybersecurity solutions. Its advances in automation are likely to give it a competitive edge, too. NOC is a stock that investors should be watching very closely.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.