$14.6B Just Poured Into Defense Tech: 4 Stocks I'd Own Now

The headline these days for investors are focused on big topics like Iran, energy prices, inflation, the Fed, and even recent trade discussions with China. That's how an interesting story about a record 14.6 billion pouring into defense tech companies slipped through the cracks. We caught wind of it and focus our proprietary quant to uncover the defense tech stocks with the best chance to benefit and soar in the months ahead. All right, that's why today I will share with you four stocks that make the grade, including a littleknown defense company most investors have never heard of and yet it ranks number one in the entire industry. Plus, we are going to discuss everyone's favorite defense tech play in Palunteer and explain why it didn't make the cut today. So, if you like datadriven stock ideas like this, then hit that like button. It helps YouTube to show more videos like this to you in the future. All right, let's take this from the top so you understand the full scope of the investment thesis. Last week, uh, Israel's finance and defense ministries picked two venture funds, uh, Adir Capital and, uh, Sling Capital to back with national guarantees. Each fund gets about 33 million in guarantees from the government, and each has to raise at least $150 million on top of that. The focus on drones, autonomous systems, and electronic warfare. That is a serious government initiative putting its own credit behind startup money on top of a wave of investments that has already reached record size. As I mentioned earlier, venture investors put 14.6 billion in defense tech in just the first five months of 2026. Indeed, that is a new record. Now, for comparison, that dwarfs the 9.6 billion investments made for all of 2025, which by the way was a record, right? So, we're pacing well ahead of that in 2026. But here's the catch. A big chunk of that money is going to just one company and that's Androl uh which unfortunately is a private firm at this time. So why should a public stock investor care about these private company investments? Because governmentbacked startup funding points to a lot more contract spending ahead that indeed will benefit publicly traded defense firms. All right. Every one of those drones and autonomous systems has to be integrated, tested, powered, and bolted onto platforms that are exist and public companies own those platforms. Before we dive into which companies will benefit the most, I should probably tell you who the heck I am. I'm Steve Wrightmeister, but everyone calls me Righty. I'm a partner at Wall Streetzen.com, where a quant rating system analyzes a wide array of data points to find the best stocks ready to outperform. And here's how it works. So our Zen Marine quant model analyzes every stock across 115 different fundamental, technical, and AI factors. The results are then boiled down to an intuitive letter grade of A through F. Indeed, the higher the grade, the higher the expected return. Now, on top of that, we also provide seven unique component grades for key areas like value, growth, momentum, and more. This all helps point out each stock's unique strengths and weaknesses. All right, here's why these ratings matter. The defense industry as a whole grades as a D. Yeah, lowly D in our system. So owning the entire theme like with an ETF is not the right call. You have to be very selective about the stocks you pick in this group. Okay, the backdrop is in place. So let's take everyone's favorite defense tech stock for uh for a ride. Of course, I'm talking about uh Palanteer with the symbol PLRT, which earns only a middle of the pack C rating after that full 115 factor review. Now, right now, there are literally thousands of stocks that outrank it in our system, which is why for me, a C- rating means see you later. On top of that, the value grade is rock bottom in the uh bottom 11% of all stocks we review. All right, it may be a great company and there may be great growth ahead, but right now it's wildly expensive. That greatly decreases the odds of future share price success. That is why it's not on our favorite stock list today. All right, I'm about ready to spell out the bullish details for the four stocks that do make the grade. But before I get them, here's something that might interest you greatly. I've put together a list of three stocks I believe could double in the coming year. Now, I located them using the same Zen rings quant I used to review the stocks in this video today. You can get this special report for free by visiting wall streetzen.com/double or clicking the link in the description down below or the QR code that's coming up on your screen. All right, let's get back to it. Our first of four defensive tech stocks featured today will be a value and safety play in science applications international with a symbol of sic. Now this is the company Washington usually calls first when the military needs its software and networks and data systems modernized. Timing looks pretty darn good here because new drones and autonomous systems are useless until they plug into the military networks and that integration work is exactly what this company does night and day. And there is an impressive pattern of strong execution forming here. That's because science applications has beaten earnings estimates for five straight quarters most recently uh in late August. That earnings momentum is likely continue with their December earnings report because they have a massive I mean massive three years of business already booked on hand which adds greatly to the visibility of more growth ahead. Okay, we have the growth in place. Gladly we have value too which shows up quite clearly from their palm tree for PE of only 11. Note the average stock these days trades for closer to 19. So 11 is pretty dirt cheap these days. Now let's appreciate the outlook for these shares through the lens the Zenering quant model. Science application scored in the top 5% of all stocks leading to an Agrade which is our firm strong buy recommendation. Strong buy is an accurate description as our A-rated stocks have outperformed the S&P by about 3 to1 over the past 20 years. All right, the component grades helps to highlight more of the impressive strength for these shares. And that starts with financials uh coming in the top 20% of all stocks, meaning it's a very well-run uh company with strong operational metrics. Then we have a top 18% showing for our AI factor grade. Now this is our usage AI to find patterns in the data pointing to more timely stocks. looking pretty good on that front. Then we make a big leap in the top 3% of all stocks for safety, which is what you would expect for a large government contract like this. And the standout grade is for value in the top 2% of all stocks. It's not just about that forward PE, but actually based upon 21 different value measures. The the risk here is almost laughable, and that's if defense spending ever shrinks, this company would feel the pain. But since when have defense budgets ever declined? Right? Here we have a true defense insider with a massive backlog of business leading to healthy earnings momentum. On top of that, we get value and safety as well. That makes it a great start to our list of top defense tech stocks today. I should note that science applications is also one of the top 20 stocks featured in my Zen investor newsletter portfolio. Feel free to do a Google search to learn more about my newsletter. Okay, next up is a company that builds military aircraft and the one NATO has been uh lining up to buy. That brings us to the smart money play in Amber with a symbol of EMBBJ. Amber is the Brazilian aircraft maker that sits right behind Boeing and Airbus in producing commercial jets. The reason it's in a defense stock video is the KC390, which is a military transport plane that NATO countries have been ordering as they rebuild their air fleets. Now, thinking about the timing, Europe is spending on defense like it hasn't in decades. A transport aircraft is what every air force needs first. This gives Amber a second growth engine for their business beyond advances in their commercial jets, the benefit of which showed up in spades in the past earnings report. Now, Wall Street expect about 62 cents per share in earnings. Amazingly, they delivered $1.19. That is nearly a 100% earnings beat, which does not grow on trees. Growth is nice, but growth plus value is much much nicer. And that's nice to see as they have a PEG ratio about 1.18. That's nicely below the average stock these days with a PEG ratio of 1.5. Now, that's not dirt cheap, but more of a GARP stock, right? Growth at a reasonable price. Indeed, we have that in these shares. In terms of Wall Street coverage, only two analysts are following shares. We both are on board and buckled up, one with a strong buy and one with a buy recommendation. And gladly both have fair value targets pointing to ample upside potential ahead. And you got to remember when coverage is that thin, there's plenty of room for more analysts to show up in the future, which help boost shares when they uh add new coverage as buyer strong. Let's pop the hood on the Zen ratings where Amber scores in the top 5% of all stocks. That means we have another coveted A-rating stock on our hands. The component grades highlight even more to like starting with the top 20% showing for safety. Next, we move up to growth in the top 18% of all stock, which foreshadows more of those healthy earnings beats ahead. And the standout grade is for sentiment in the top 3% of everyone every stock we track. This means the smart money crowd uh is on board. Wall Street analysts with estimate revisions and upgrades, institutional money flows, and yes, insider buying. Following the smart money is always been a popular approach. That's good to know they are already on board these shares. One important consideration here is the commercial aviation cycle. Now airlines are fickle about deliveries and when they push orders out a manufacturing in the space can feel that pain in uh earnings and in the share price. Gladly the defense side of the business helps cushion that blow but doesn't erase it. Right. The big picture is that things are going very well for the firm especially the increase in NATO orders leading to a nearly 100% earnings beat in the most recent quarter. That is why the smart money is on board and maybe you should be on board too. All right. Next up we had the bluest of blue chip defense names. Even better is a chance to buy it on a juicy dip. But a quick ass before we get to that stock, and that's if you're enjoying this video, then it's time to hit the subscribe and the notification bell. Now, I publish data driven stock analysis like this every single week. And these small actions can help ensure you don't miss any of my future video releases. All right, let's forge ahead with our blue chip buy the dip opportunity in Lockheed Martin with a symbol of LMT. Now, you know the name. Lockheed is the biggest defense contractor on the planet with one of the largest contract backlogs in the business covering things like F-35 fighter jets, uh, missiles, missile defense systems, hypersonics, and more. You name it, they're involved. When fresh venture money floods into drones and autonomous systems, those systems end up being bolted to Lockheed's platforms. Quality stocks like this rarely go on sale. And yet, we are sitting here 25% off the summer highs. for a business with this kind of backlog. That is the kind of pullback long-term investors dream about. Indeed, opportunity is knocking. Note that there is no dimming of their business outlook as they are coming off another solid earnings beat. Better still, they finished the quarter with a record backlog of more than, get ready for this, $230 billion in business. This emboldened management to raise their fullear forecast. So, shares dropped 25% all the while business prospects have only gone up. That is the disconnect worth paying attention to for investors at this time. Now, to be honest, Wall Street as a whole is only lukewarm on these shares. But the highest ranked analyst covering the stock right now is also on the pounding the table with the highest fair value target, meaning he probably knows something that others are missing. Gladly Zen rings is all smiles on these shares. After the full 115 factor review, they score in the top 4% of all stocks, pointing to a truly stellar investment profile. This leads to Lockheed earning another elite A rating which bodess well for the future share price outperformance. Also we have the component grades starting off with a healthy top 13% showing for that AI timeliness grade we talked about before. Financial strength comes in the top 8% of all stocks pointing to truly operational excellence for this uh blue chip. Value is surprisingly good in the top 8% as well. No doubt that recent dip has a lot to do with that value equation. And the standout grade is the top 7% showing for safety, which makes a lot of sense for a blue chip defense name like this one. The greatest risk here is program charges. Now, big contractors sign fixed price deals. And when prices run higher than expected, the company eats the difference, right? Lockheed has taken multibillion uh dollar charges twice in the p locked has taken some pretty big charges like this in over the past two years. And yeah, it could happen again. However, a quality stock like this rarely goes on sale. And yet, that is exactly what is taking place now. And if you believe worldwide defense spending will continue to increase in the future, which is uh one of the shortest bets around, then you have to consider snapping up shares on this recent 25% dip. Okay, before we get to the last stock, I have one quick thing for you. And if you want to stay a step ahead of the market, then you need to join me this uh coming Monday for my live presentation. And that is when I share my updated market outlook and trading plan to outperform. It's also when I unveil my trade of the week based upon our proven Zen rings quant model and my greater than 40 years of investing experience. Now, it's a free event, but you do need to register. Just go to wall streetzen.com/live or click the link in the description or scan the QR code that's coming up on your screen. Hey, even if you can't join live this money, you should still sign up. That's because we send a replay to all registrants so you can watch when it's more convenient. All right, just pause the video for a moment to sign up. I'll be patient and wait for you and I look forward to seeing you there on Monday or on the replay whenever you watch it. All right, now on to the highest rated defense stock in our entire system and almost nobody on Wall Street bothers to cover it. That makes it the hidden gem pick of our video today. Drum roll please. It's Estronics with a symbol of ATRO. All right, these guys make the electronics inside aircraft like power systems, connectivity and the tests equipment militaries use to make sure it all works. These are absolutely essential products. Our quant model ranks as the number one out of 85 defense stocks ahead of everyone else uh we're talking about today including Loheed. And just like with Loheed, our final [snorts] pick is also on sale. Astronic spiked to about 90 back in July and since seen a pullback of about 30% from the highs. But here comes the part I like the most. We have a tremendous turnaround unfolding. Truly, Estronics is the phoenix rising from the ashes. That's because after two years of nasty losses, they are back in the black in a big way. Even better is the signs of earnings momentum showing up with four healthy consecutive earnings beats. The latest quarter came in at 70 cents per share versus a measily 3 cents per share a year ago. Yeah, that kind of earnings momentum. Wall Street sees this turnaround continuing into the future with another 41% earnings growth expected in the year ahead. That's about two and a half times the pace of their industry peers. Now, as with most tener rounds, they typically remain undervalued for a while. That is most certainly the case here with a modest PEG ratio of 1.0, about 1/3 less expensive than the average stock traded uh today. I already told you this was a hidden gem, and that's because Wall Street is pretty much asleep at the wheel with just one covering analyst. Gladly, it's a highly ranked analyst coming from TD Cowan who is pounding the tables that shares should be about 50% higher to reach their fair value target. And as I already pointed out, it is indeed the highest rated stock in the video today. Not just A-rated, but actually in the top 1% of all stocks reviewed based upon those 115 different factors. All right, let me put that another way. It is more attractive than 99% of all stocks re review. So maybe it is better to call it an A+ shares. All right, as you would expect with that rating, the component grades reveal a lot more to like in Astronics. Safety comes into the top 20% of all stocks. More importantly, sentiment is in the top 19%, which tells you the smart money crowd is circling these shares, even if Wall Street's a little asleep. Financial strength is in the top 7%, proving the turnaround is in full swing. And the standout grade, as it should be in a story like this, is growth. Top 1% of the entire market, which foreshadows more earnings beats ahead. The main weak spot is that this is not that large of a company. We're talking about three billion market cap. Thus, you should expect a little more volatility than some of the other stocks you might be considering. However, turnarounds offer some of the best upside potential of any stocks you could find. That's because you blend outsiz earnings growth with attractive value. Not to mention the top 1% showing from the Zen ratings. And not to mention the great time to get on board after the recent 30% dip. That makes Astronics the perfect pick to close out our video today. And again, it's the number one ranked defense stock. All right, perfect for today. Remember, pullbacks like the ones in Lockheed and Astronics don't stick around forever. So, if you're interested in those stocks, then you should research them soon to determine if they deserve a spot in your portfolio. Thus, a good time to remind you the Zen rings are updated daily on Wall Streetzen.com. So, always be sure to check the current ratings on any stocks you're considering before making any buy, hold, or sell decisions. All right. Now, I want to hear from you. Which of these four stocks do you like the most? And are there any other defense tech stocks I didn't mention that you like even better? Share it all with our investment community in the comments section below. And do you have a few minutes to discover some more great stocks? Then check out the video that's coming up on your screen right now where I share the top four AI stocks I'd buy even over invidia. That is the one that you want to watch next.