Top US Defense Stocks in 2025: Lockheed Martin, Northrop Grumman, and L3Harris Poised to Withstand Tariff Pressures
Discover how leading US defense companies maintaining domestic supply chains are positioned to resist new tariff impacts in 2025, according to Morgan Stanley's latest analysis.
Key Insights
- Defense firms with US-based supply chains for national security are expected to be less affected by recent tariffs, Morgan Stanley analysts highlight.
- Companies primarily serving the US government face reduced risks from retaliatory tariffs by foreign nations.
- Lockheed Martin, Northrop Grumman, and L3Harris are identified as strong contenders to navigate the evolving tariff landscape effectively.
Leading US defense contractors such as Lockheed Martin (LMT) and Northrop Grumman (NOC) are anticipated to be relatively shielded from the consequences of recent tariff implementations, according to Morgan Stanley's 2024 report.
Historically, these defense companies have maintained supply chains within the United States to uphold national security standards. This strategic positioning minimizes their vulnerability to international tariff retaliations. Additionally, firms predominantly engaged with the US government enjoy further insulation from global trade tensions.
Morgan Stanley highlights Lockheed Martin, Northrop Grumman, and L3Harris Technologies (LHX) as prime examples of defense stocks well-equipped to endure the current tariff environment. In contrast, companies with significant commercial client exposure, such as General Dynamics (GD) and Textron (TXT), may experience heightened pressure.
Despite these strengths, recent market activity showed shares of Lockheed Martin and Northrop Grumman each declined approximately 4%, while L3Harris saw a near 3% drop amid broader market fluctuations. General Dynamics and Textron faced steeper declines, falling over 6% and 7% respectively.
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