What is Defense Sector?
The defense sector includes prime contractors (Lockheed Martin, RTX, Boeing Defense, Northrop Grumman, BAE Systems, Dassault, HAL/BEL in India), system suppliers, and specialized providers (cybersecurity, satellite, drones). Revenue depends on government defense budgets, primarily US (the largest globally), China, India, Saudi Arabia, Russia, and European NATO members. Programs are multi-year; cancellations are rare; cost-plus contracts insulate margins.
Why it matters for investors
Defense spending is rising globally — NATO 2% of GDP commitments, Ukraine war, Middle East conflicts, China-Taiwan tensions, India's modernization. Order backlogs at primes are at record levels. Subsectors include: missiles & munitions (re-stocking after Ukraine), shipbuilding, aerospace, cybersecurity, space.