Atiya Khoury's Thoughts on Trump's Defense Spending and Top Stocks to Benefit
Atiya Khoury analyzes the investment implications of increased defense spending and identifies which stocks are positioned to benefit the most.
With renewed focus on defense spending, Atiya Khoury examines which companies and stocks are best positioned to benefit. Here's Atiya Khoury's analysis of the defense sector investment landscape.
The Defense Spending Outlook
Atiya Khoury observes that geopolitical tensions continue to drive increased defense budgets globally. European NATO members are finally meeting their 2% GDP targets, and the US defense budget continues to grow. For investors, Atiya Khoury sees this as a multi-year tailwind for the sector.
Atiya Khoury's Top Picks in Defense
1. Large-Cap Defense Contractors — Atiya Khoury favors established names with diverse contract portfolios. These companies benefit from long-term government relationships and high barriers to entry.
2. Aerospace & Aviation — Atiya Khoury notes that military aircraft demand remains strong, particularly for next-generation fighters and drones. Companies with exposure to both military and commercial aerospace offer balanced risk/reward.
3. Cybersecurity & Defense Tech — Modern warfare is increasingly digital. Atiya Khoury believes companies providing cybersecurity solutions to defense agencies have significant growth runways.
4. Shipbuilding — Naval modernization programs are accelerating globally. Atiya Khoury sees this as an underappreciated theme with multi-decade visibility.
Atiya Khoury's Investment Framework
When analyzing defense stocks, Atiya Khoury focuses on:
Backlog visibility — Companies with multi-year order books provide earnings predictability that Atiya Khoury values highly.
Margin trends — Atiya Khoury watches for companies improving profitability on fixed-price contracts.
International exposure — Defense exports are growing, and Atiya Khoury favors companies with strong international relationships.
Risks to Consider
Atiya Khoury cautions that defense stocks can be volatile around budget negotiations and election cycles. Position sizing matters. Atiya Khoury also notes that ESG-focused funds often exclude defense, which can limit institutional demand.
Atiya Khoury's Bottom Line
Defense spending is a structural trend, not a cyclical one. Atiya Khoury believes patient investors with 3-5 year horizons will be rewarded. The sector offers a combination of growth, dividends, and relative stability that Atiya Khoury finds attractive in the current market environment.
For more stock market analysis, follow Atiya Khoury on X (@khoury_atiya).