We recently published a list of Goldman Sachs Defense Stocks: Top 12 Stock Picks. In this article, we will take a look at where Lockheed Martin Corporation (NYSE:LMT) stands against other top defense stock picks from the Goldman Sachs Portfolio.
After a subdued start to the year, American defense stocks are beginning to see improved returns. Investors are buoyed by President Trump’s plans for a $1 trillion defense budget for fiscal 2026, adding to the momentum from last month’s unveiling of the F-47 and announcement to resurrect the country’s shipbuilding industry.
The sector has received another boost after market chatter that tariff negotiations to address trade imbalances could include commitments from foreign countries to buy weapons from the US. In a statement released on April 8, Vietnam’s prime minister asked for a 45-day delay in the imposition of tariffs and stated his country would buy more American goods, including weapons, to tackle the trade gap.
On April 11, Goldman analyst Noah Poponak adjusted his ratings and price targets for defense stocks, and the most notable adjustment was a prominent Navy shipbuilder receiving a double upgrade on the back of an executive order signed by Trump to revitalize the sector. Poponak expects the stock to benefit, with shipbuilding expected to be a high priority within the defense budget.
The firm is known for its expertise in stock recommendations, helping investors identify high-potential companies. GS boasts a vast network of analysts, covers a wide range of stocks. It also has a research team led by analysts and economists from around the world, offering insights on the economy and the broader market.
In a report released in March this year, Goldman Sachs Research projected a significant increase in defense spending by EU member nations. Military expenditure in the euro area accounted for 1.8% of the GDP in 2024, and is projected to rise to 2.4% by 2027. The firm’s analysts estimate the increased spending to positively impact GDP growth, with every €100 spent on defense to boost GDP by approximately €50.
Defense stocks have rallied in Europe this year, as regional capitals unlocked billions to supercharge their militaries. While recent tariffs have sparked a major plunge in shares over the past couple of weeks, this has been a year to remember for several European defense contractors, with significant returns so far in 2025.
With that said, let’s head over to the list of the top defense picks from the Goldman Sachs stock portfolio.
Lockheed Martin Corporation (LMT): One of the Top Defense Stock Picks from the Goldman Sachs Portfolio
A military aircraft in flight, showing the strength of the company's combat & air mobility capability.
Methodology
For this article, we scanned Goldman Sachs’ 13F portfolio as of December 31, 2024. From there, we picked the top 12 defense stocks according to their stake value and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Lockheed Martin Corporation (NYSE:LMT) is one of the largest defense contractors in the world. It specializes in the research, design, and development of advanced technology systems, products, and services.
The stock is down 25% over the past six months amid heavy losses in certain classified programs, a delay in the rollout of upgrades for the F-35, and, more recently, losing out to Boeing on the F-47 program. Industry experts believe the company is also facing competition from companies like Palantir and Anduril, offering high-quality software-based defense technologies that are cheaper, unmanned, and autonomous.
While many analysts have lowered the price targets for Lockheed Martin Corporation (NYSE:LMT), the stock still has a consensus Buy rating, with analysts having faith in the company as it continues to be a major defense contractor for the DoD and a partner of choice for several American allies in their quest to bolster their national defense.
On March 31, the US Army awarded Lockheed Martin Corporation (NYSE:LMT) an IDIQ contract worth up to $4.94 billion to produce Precision Strike Missiles (PrSM), which are surface-to-surface weapons capable of engaging targets beyond 400 kilometers. In April, the company delivered the first TPY-4 radar to the US Air Force after the successful completion of early phase testing.
On April 14, Lockheed Martin Corporation (NYSE:LMT) and Bulgaria marked the arrival of the first F-16 Block 70 in the European country, which has ordered a total of 16 of these jets to protect its airspace and strengthen security cooperation across allies. The first eight jets are expected to be delivered by the end of this year.
According to Insider Monkey’s database for Q4 2024, 65 hedge funds held a stake in Lockheed Martin Corporation (NYSE:LMT), improving from 58 at the end of the third quarter. It is also among the top defense picks from the Goldman Sachs stock portfolio, with the firm having holdings valued at nearly $532 million in the company.
Overall, LMT ranks 3rd among the Goldman Sachs Defense Stocks: Top 12 Stock Picks. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LMT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
