Defense and space stocks are having a moment. Whether due to the upcoming initial public offering (IPO) of SpaceX or the growing need for defense supplies amid conflicts around the world, investors are buying defense stocks for their portfolios at a rapid pace.
This is all fine and well, but the sun doesn’t always shine on the defense/war contractors, especially in programs that are experimental and bound for revisions, such as the Golden Dome missile defense system. If you have money to invest and want a prime contractor in the defense industry with the backlog to get through any Trump-era volatility, then Lockheed Martin (LMT 0.64%) may be just for you.
If you have $7,500 available to invest, here’s why you might want to put it toward buying and holding this stock for the long term.
Image source: Getty Images.
Lockheed Martin manages diversified defense programs
Lockheed Martin operates across the entire defense arena, but mainly focuses on aerospace and missile solutions. These include large existing contracts such as the F-35, the most advanced main fighter jet for the United States and its allies right now. Long-term contracts for the F-35 should generate revenue for decades, including maintenance and project upkeep.
These contracts may also apply in areas like missile procurement, which are used extensively to intercept enemy weapons in places like Ukraine and the Persian Gulf. The company recently announced a quadrupling of production for its precision strike missiles.
All these existing programs are why Lockheed Martin had a record backlog of $194 billion at the end of 2025, a figure that is set to only grow in 2026.
Today’s Change
(-0.64%) $-3.93
Current Price
$607.17
Key Data Points
Market Cap
$141B
Day’s Range
$601.68 – $612.57
52wk Range
$410.11 – $692.00
Volume
33K
Avg Vol
1.6M
Gross Margin
11.04%
Dividend Yield
2.21%
A future in space and weapons tech
What makes Lockheed Martin a perfect starter defense stock is its stable existing programs combined with a long history of pushing the innovation envelope across space and weapons technologies.
In space, Lockheed works with GPS and missile-detection satellites, as well as in non-defense categories like space exploration, both for human and non-human flights. Altogether, the category generates $13 billion in annual revenue, a figure set to grow in the years ahead if Lockheed Martin can capture the enormous opportunity in the growing space economy.
In weapons and aerospace technology, Lockheed Martin has its famous Skunkworks division that works on projects, both unclassified and classified, for the future of the Defense Department. While exact program details can be scarce, it is investing in a wide swath of technologies, including hypersonic missiles, artificial intelligence (AI), and electronic warfare. These technologies are being combined into a new program, Vectis, an advanced drone that can work alongside fighter jets like the F-35 for precision strikes and electronic warfare.
Data by YCharts.
Why Lockheed Martin can weather any budget swings
Proposals for defense projects may ebb and flow, but the United States military and its allies will still need interceptor missiles and fighter jets for the foreseeable future. Lockheed Martin is one of the premier suppliers for both these defense categories.
Revenue was $75 billion and is projected to grow to $77.5 billion to $80 billion this year. Along with the backlog growing to nearly $200 billion, Lockheed Martin’s business is as durable as it gets. The defense budget is projected to grow from $1 trillion this year to $1.5 trillion in 2027, a massive leap that will benefit anyone playing in the defense and space sectors. However, these boom times may not last forever, and Lockheed Martin is one of the defense stocks poised to come out clean on the other side of any downturn in government spending.
What’s more, Lockheed’s stock trades at a reasonable valuation, with a forward price-to-earnings ratio (P/E) of 20. You cannot say that about high-flying players in the sector, such as Palantir Technologies. For this reason, Lockheed Martin would be a great starter defense stock to invest $7,500 in and hold through the market cycle.
