Why Defense Stocks and ETFs Can Continue to Soar

Defense stocks are surging following the U.S. move to oust and capture Venezuelan leader Nicolas Maduro. The sector had already performed strongly last year due to rising defense spending amid escalating geopolitical tensions.

President Trump has revived the Monroe Doctrine of the 1820s, emphasizing the need for U.S. dominance in the Western Hemisphere, and has referenced Colombia and Cuba in recent remarks. He also stated, “We need Greenland, from the standpoint of national security.”

Some experts are concerned that these actions could embolden China to move on Taiwan and encourage more aggressive posturing from Russia. Rising tensions between China and Taiwan, between India and Pakistan, and ongoing conflicts across the Middle East are already driving a renewed global focus on rearmament, with the potential to push military spending even higher.

Global defense spending could surpass $3.6 trillion by 2030, up 33 percent from 2024 levels, according to Global X, as countries accelerate investment in AI, autonomous drones, and advanced cyber defenses. In the U.S., increased defense spending remains one of the few areas of bipartisan agreement.

European defense stocks, which have been climbing since the start of the Russia–Ukraine war, surged further in 2025 as governments ramped up military spending, partly in response to pressure from Trump. They had a brief pullback late last year amid signs of progress toward ending the war in Ukraine.

At the same time, global air traffic continues to expand, with the rising middle class in emerging economies expected to be a key driver of future travel demand. This trend should provide ongoing support for commercial aerospace businesses over the long term.

To learn more about 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), please watch the short video above.

GE Aerospace (GE), Lockheed Martin (LMT) , Northrop Grumman (NOC) , Boeing (BA) , and Palantir (PLTR) are among the top holdings in these ETFs.

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The Boeing Company (BA) : Free Stock Analysis Report

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

GE Aerospace (GE) : Free Stock Analysis Report

Global X Defense Tech ETF (SHLD): ETF Research Reports

iShares U.S. Aerospace & Defense ETF (ITA): ETF Research Reports

State Street SPDR S&P Aerospace & Defense ETF (XAR): ETF Research Reports

Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report

Select STOXX Europe Aerospace & Defense ETF (EUAD): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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