Buy These Stocks BEFORE April 3

One of the more striking developments over the past month has been the decline in defense stocks.

Heavyweight defense contractors like Lockheed Martin (NYSE: LMT), RTX (NYSE: RTX), and Huntington Ingalls (NYSE: HII) are all down.

And smaller, tech-centric or niche defense companies like AeroVironment (NASDAQ: AVAV) and Kratos Defense and Security Solutions (NASDAQ: KTOS) are down even more.

That’s not what you’d expect when we’re fighting a major war in the Middle East.

The most recent estimates suggest the United States spent $16.5 billion through the first 12 days of the war.

Meanwhile, Secretary of Defense Pete Hegseth has already asked lawmakers for another $200 billion in supplemental funds to pay for operations in Iran and refill American munition stockpiles.

However, he also said that figure “could move” higher.

“Obviously, it takes money to kill bad guys, so we’re going back to Congress and folks there to ensure that we’re properly funded for what’s been done, for what we may have to do in the future, ensure that our ammunition is refilled, and not just refilled, but above and beyond,” Hegseth said.

Indeed, munitions supplies were already low, as many were shipped off to defend Ukraine and others deployed to Israel to aid in its wars against Hamas and Iran.

However, the overarching issue with America’s missile shortages is that our defense industrial complex lacks capacity.

The fact is stocks of missiles, rockets, and interceptors sat on the shelves for decades. With no immediate need to refill stocks, the military stopped ordering them and manufacturers stopped making them.

Now demand has spiked back up and contractors are pivoting back into production. But that takes time and long-term commitments.

Again, this was already an issue, but the war with Iran has turned it into a crisis.

Just for example, the U.S. military has reportedly fired more than 850 Tomahawk cruise missiles in four weeks of the Iran war. And if you add in munitions expended in last year’s operations that figure rises to more than 1,000.

However, the Pentagon typically only buys about 90 Tomahawk missiles each year on average.

So we’re burning through Tomahawks at nearly 10x the rate that they’re ordered.

Furthermore, RTX — the missile’s primary manufacturer — only has enough capacity to produce 600 Tomahawks a year at best. And while the company recently announced a framework agreement with the Defense Department to scale production up to 1,000 missiles per year, it’s going to take years to roll out.

Lockheed Martin just signed a new deal with the Pentagon too.

Just last week, in fact, the company said it would quadruple its precision missile production. And this comes after Lockheed already signed a separate $5 billion precision missile contract with the government last year.

So, again, it’s kind of surprising to see that both of these stocks — and those of other defense companies — are down.

Well, that’s only because they had such big runs in 2025.

You see, when Wall Street adjusts for risks, firms and managers often sell off their biggest winners. And few sectors have performed as well as defense.

Of course, you’d also include precious metals among the big winners over the past 12–18 months. Yet, despite a massive uptick in geopolitical uncertainty and surging inflation, those have sold off as well.

So, to be clear, both defense and precious metals have sold off for effectively the same reasons — profit-taking and risk adjustment — neither which have anything to do with their fundamental outlook.

In the case of defense, in particular, the dichotomy is eye-popping considering the amount of money pouring into defense.

Further to that point, the missile deals and $200 billion supplemental I just mentioned are just the start of another massive wave in defense spending.

That wave will hit in full on Friday, April 3, which is when President Trump is scheduled to release his FY2027 defense budget request.

Trump’s last budget request for FY2026 totaled $848 billion. And his “Big Beautiful Bill” added another $156.2 billion, bringing the total figure to $1 trillion.

And over the past few months, Trump has been calling for another massive increase — this time to $1.5 trillion.

Like last year, that figure could be reached through a combination of spending bills and supplementals. But it will also undoubtedly include another major boost to the baseline budget request, which is poised to come in somewhere around AT LEAST $900 billion.

So the key takeaway here is that now is time to buy the dip on defense contractors.

This sell-off is completely at odds with what’s taking place around the world and in Washington, D.C.

Investors should also hone in on President Trump’s signature defense initiative — the Golden Dome.

The companies involved with that project are going to be among the biggest beneficiaries of higher defense spending. And you can get all the details on that right here.