Figures released this April by the Stockholm International Peace Research Institute (SIPRI) estimated global defense spending for 2023 at a record high of $2.44 trillion, having risen 6.8% compared to the previous year. This is the biggest spike in military expenditure since 2009 and the ninth successive year defense spending had increased.
With defense bills worth a whopping $916 billion during the year, the United States accounted for 37.5% of the world’s total military spending in 2023. The figure was 2.3% higher than last year and represented more than two-thirds (68%) of NATO’s overall defense expenditure in 2023. $588 billion was spent in Europe, which was 16% higher than in 2022, and made up 24% of the global spending. The spike was triggered by a substantial increase in defense spending by both Russia and Ukraine, while several other countries in the region also bolstered their defenses with war returning to the continent after decades of peace.
Asia incurred $560 billion on defense in 2023. The figure was 40% more than what it was a decade ago in 2014. A major chunk of this expenditure came from East Asia and South Asia, while oil-rich monarchies in the Middle East also spent hefty amounts on strengthening their national security.
The surge in defense spending over the last two years, specifically after Russia’s invasion of Ukraine in February 2022 has created a boom in the global defense industry. The ongoing conflict in the Middle East involving Israel and Hamas has further bolstered their finances. Lockheed Martin Corporation (NYSE:LMT) posted a revenue of $67.6 billion in 2023, representing a 2.4% increase year-over-year. The company’s earnings also grew $1.2 billion compared to 2023.
Since the beginning of the Russia-Ukraine conflict, Lockheed Martin Corporation (NYSE:LMT)’s share price has gained 29%, due to strong demand for its weapons, especially HIMARS, GMLRS, and the F-35 fifth-generation fighter jet. The stock is projected for further growth with no end in sight to the war in Europe and the aggravating situation in the Middle East. In April, this year, the United States announced $95 billion in fresh military aid for Ukraine, Israel, and Taiwan. Experts believe a major chunk of this amount is going to go into the procurement of advanced weapons from companies such as Lockheed Martin Corporation (NYSE:LMT). It is one of the best aerospace and defense stocks to buy now, with 47 hedge funds bullish about the company’s prospects in Q1 2024, according to Insider Monkey.
RTX Corporation (NYSE:RTX) is another stock that is flying high amid strong financial results. After a solid 2023, during which it posted nearly $69 billion in revenue, the company had a robust first quarter of 2024 as well, with sales totaling $19.3 billion and registering a 12% YoY growth. Its earnings per share of $1.34 was also 10% higher than in the first quarter of last year. RTX Corporation (NYSE:RTX)’s share price has spiked 15% since the start of the Ukraine war in early 2022.
Anticipating a sustained demand for its weapons, RTX Corporation (NYSE:RTX) expects a total revenue between $78-99 billion for FY2024 and an EPS in the range of $5.25 – $5.40. According to Insider Monkey’s hedge funds database, 62 hedge funds are bullish on the company. Their optimism stems from RTX Corporation (NYSE:RTX)’s impressive backlog of $196 billion, of which $78 billion is related to defense orders, including a $2.8 billion guided-missile order by NATO.
We considered 14 weighted metrics to rank 15 countries that have the best military in the world. These include GDP and defense spending (20%), technological capabilities (15%), manpower and special forces strength (15%), nuclear weapons (10%), aircraft including fighter jets (10%), aircraft carriers and submarines (10%), tanks and artillery (5%), military satellites in orbit (5%), overseas military bases (5%), and cybersecurity capabilities (5%).
It was seen where each country ranked on a given metric and then was assigned a weighted score accordingly. Finally, all weighted scores were aggregated to get an overall score. Countries with the best military in the world are ranked in ascending order of their overall weighted scores.
The country with the best military in the world is the United States.
1. United States
GDP (2023): $26.95 trillion
Defense Expenditure (2023): $916 billion
Technological Capabilities Rank: 3
Nuclear Weapons: 5,550
Manpower: 1,328,000
Special Forces Rank: 1
Tanks: 4,657
Artillery: 3,556
Aircraft/Fighter Jets: 5,209
Aircraft Carriers: 11
Submarines: 64
Military Satellites: 218
Overseas Military Bases: 759
Cyber capabilities Rank: 1
Weighted Score: 1.65
The United States has the best military in the world. The country outranks all counterparts in ground forces, aerial, and naval strength. In 2023, Washington spent a staggering $916 billion on defense expenditure, which represented close to two-fifths of the world’s military spending and 68% of NATO’s defense expenditure during the year. The United States has the largest fleet of fighter jets and aircraft carriers in the world, which alone is a testament to its military power. Moreover, the country enjoys a distinct geographic advantage through its 759 overseas military bases across 80 countries, which allow it to strike enemy targets anywhere in the world at will. The United States is also the third most technologically advanced country in the world and ranks first in the globe for cybersecurity capabilities.
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