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Best Defense Stocks to Buy for Geopolitical Uncertainty
After major global events, friends and colleagues often reach out asking what it all means for markets, what will happen next and how investors should respond. While I’m always willing to share a view, the most honest position is usually the simplest one: I don’t know. In highly complex systems like global politics and financial markets, precise predictions are rarely durable. More often, they become an exercise in false certainty that anchors investors to a specific outcome and limits flexibility when conditions inevitably change.
That dynamic was on display again over the weekend, when President Donald Trump threatened additional tariffs on several EU nations following escalating tensions tied to Greenland. The headlines triggered a wave of messages asking for my take. The truth is, it’s unclear how events will unfold or where negotiations ultimately land.
What is clear, however, is how to position a portfolio for uncertainty without needing to forecast specific outcomes. Investors don’t need to predict the next geopolitical turn to prepare for a more volatile and security-focused global backdrop.
I’ve written extensively about the role of gold, gold miners, and energy stocks in environments like this. Another area quietly showing persistent strength is defense and aerospace. As governments reassess security priorities and increase spending, the sector continues to attract capital, and several stocks stand out on both fundamental and technical grounds. Among them are Teledyne Technologies ((TDY - Free Report) ), AAR ((AIR - Free Report) ), and Innovative Solutions and Support ((ISSC - Free Report) ).
Image Source: Zacks Investment Research
Teledyne Technologies: A Leading Aerospace Stock
Teledyne Technologies is one of the highest quality operators in the defense and aerospace space, with a business spanning advanced instrumentation, digital imaging, aerospace electronics, and defense systems. Its products are deeply embedded in mission-critical applications across defense, space, maritime, and industrial markets, giving the company a durable competitive position and highly recurring demand.
That quality has translated into exceptional long-term stock performance. Teledyne has compounded shareholder value steadily for decades through a combination of organic growth, disciplined acquisitions, and strong execution. It remains a clear industry leader with a reputation for reliability and technological depth.
From a fundamentals standpoint, Teledyne carries a Zacks Rank #2 (Buy). The stock trades at roughly 24.4x forward earnings, which represents a modest premium to the broader market. However, that valuation is supported by consistent execution, strong cash flows, and an earnings growth outlook of nearly 10% annually over the next 3–5 years. In an environment where capital is gravitating toward defense stalwarts with proven track records, Teledyne’s combination of momentum, institutional sponsorship, and business quality could continue to support higher prices.
Image Source: Zacks Investment Research
AAR: Stock Pushes to All-Time High
AAR provides aviation services and logistics solutions to both commercial and defense customers, with growing exposure to military sustainment, supply chain management, and aircraft maintenance. As global defense activity increases, demand for these operational and support services has strengthened meaningfully.
The stock has started the year with impressive momentum, pushing to fresh record highs just last week. That price action is being reinforced by improving fundamentals. AAR currently holds a Zacks Rank #2 (Buy), supported by broad earnings estimate revisions. Most notably, current quarter earnings estimates have risen 11% over the past 30 days, signaling improving visibility and stronger-than-expected operating trends.
Valuation remains reasonable given the growth profile. Shares trade at approximately 21.7x forward earnings, while sales are expected to grow 15.2% this year and earnings are forecast to climb roughly 24%. With strong momentum, improving estimates, and increasing defense exposure, AAR stands out as a stock that appears to be re-rating higher.
Image Source: Zacks Investment Research
Innovative Solutions and Support: Shares Breakout
Innovative Solutions and Support is a smaller, more specialized player in the defense and aerospace ecosystem, focused on avionics systems used in military and commercial aircraft. While less well known, the company operates in a niche that benefits directly from fleet upgrades, modernization programs, and rising defense budgets.
ISSC is setting up as a potential momentum standout. The stock carries a Zacks Rank #1 (Strong Buy), driven by a dramatic surge in earnings expectations. Current quarter earnings estimates have jumped 233% over the last 60 days, reflecting a sharp improvement in underlying business conditions.
From a technical perspective, shares have just broken out from a textbook momentum base, a pattern often associated with the early stages of sustained advances, particularly in small-cap stocks when fundamentals inflect. While ISSC carries higher volatility than larger defense names, the combination of explosive estimate revisions and improving price action suggests it could emerge as a leadership name within the smaller-cap defense universe.
Image Source: TradingView
Should Investors Buy shares in ISSC, TDY and AIR?
Periods of geopolitical uncertainty are going to reward preparation over prediction. Defense and aerospace stocks offer that preparation by aligning portfolios with enduring spending trends that are largely independent of headlines. Teledyne provides stability and quality exposure to the core of the defense ecosystem, AAR adds momentum and earnings acceleration, and ISSC offers huge upside potential as a small-cap name.
For investors looking to position for uncertainty rather than forecast it, these names represent compelling ways to gain targeted exposure to one of the market’s strongest and most resilient sectors.
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Best Defense Stocks to Buy for Geopolitical Uncertainty
After major global events, friends and colleagues often reach out asking what it all means for markets, what will happen next and how investors should respond. While I’m always willing to share a view, the most honest position is usually the simplest one: I don’t know. In highly complex systems like global politics and financial markets, precise predictions are rarely durable. More often, they become an exercise in false certainty that anchors investors to a specific outcome and limits flexibility when conditions inevitably change.
That dynamic was on display again over the weekend, when President Donald Trump threatened additional tariffs on several EU nations following escalating tensions tied to Greenland. The headlines triggered a wave of messages asking for my take. The truth is, it’s unclear how events will unfold or where negotiations ultimately land.
What is clear, however, is how to position a portfolio for uncertainty without needing to forecast specific outcomes. Investors don’t need to predict the next geopolitical turn to prepare for a more volatile and security-focused global backdrop.
I’ve written extensively about the role of gold, gold miners, and energy stocks in environments like this. Another area quietly showing persistent strength is defense and aerospace. As governments reassess security priorities and increase spending, the sector continues to attract capital, and several stocks stand out on both fundamental and technical grounds. Among them are Teledyne Technologies ((TDY - Free Report) ), AAR ((AIR - Free Report) ), and Innovative Solutions and Support ((ISSC - Free Report) ).
Image Source: Zacks Investment Research
Teledyne Technologies: A Leading Aerospace Stock
Teledyne Technologies is one of the highest quality operators in the defense and aerospace space, with a business spanning advanced instrumentation, digital imaging, aerospace electronics, and defense systems. Its products are deeply embedded in mission-critical applications across defense, space, maritime, and industrial markets, giving the company a durable competitive position and highly recurring demand.
That quality has translated into exceptional long-term stock performance. Teledyne has compounded shareholder value steadily for decades through a combination of organic growth, disciplined acquisitions, and strong execution. It remains a clear industry leader with a reputation for reliability and technological depth.
From a fundamentals standpoint, Teledyne carries a Zacks Rank #2 (Buy). The stock trades at roughly 24.4x forward earnings, which represents a modest premium to the broader market. However, that valuation is supported by consistent execution, strong cash flows, and an earnings growth outlook of nearly 10% annually over the next 3–5 years. In an environment where capital is gravitating toward defense stalwarts with proven track records, Teledyne’s combination of momentum, institutional sponsorship, and business quality could continue to support higher prices.
Image Source: Zacks Investment Research
AAR: Stock Pushes to All-Time High
AAR provides aviation services and logistics solutions to both commercial and defense customers, with growing exposure to military sustainment, supply chain management, and aircraft maintenance. As global defense activity increases, demand for these operational and support services has strengthened meaningfully.
The stock has started the year with impressive momentum, pushing to fresh record highs just last week. That price action is being reinforced by improving fundamentals. AAR currently holds a Zacks Rank #2 (Buy), supported by broad earnings estimate revisions. Most notably, current quarter earnings estimates have risen 11% over the past 30 days, signaling improving visibility and stronger-than-expected operating trends.
Valuation remains reasonable given the growth profile. Shares trade at approximately 21.7x forward earnings, while sales are expected to grow 15.2% this year and earnings are forecast to climb roughly 24%. With strong momentum, improving estimates, and increasing defense exposure, AAR stands out as a stock that appears to be re-rating higher.
Image Source: Zacks Investment Research
Innovative Solutions and Support: Shares Breakout
Innovative Solutions and Support is a smaller, more specialized player in the defense and aerospace ecosystem, focused on avionics systems used in military and commercial aircraft. While less well known, the company operates in a niche that benefits directly from fleet upgrades, modernization programs, and rising defense budgets.
ISSC is setting up as a potential momentum standout. The stock carries a Zacks Rank #1 (Strong Buy), driven by a dramatic surge in earnings expectations. Current quarter earnings estimates have jumped 233% over the last 60 days, reflecting a sharp improvement in underlying business conditions.
From a technical perspective, shares have just broken out from a textbook momentum base, a pattern often associated with the early stages of sustained advances, particularly in small-cap stocks when fundamentals inflect. While ISSC carries higher volatility than larger defense names, the combination of explosive estimate revisions and improving price action suggests it could emerge as a leadership name within the smaller-cap defense universe.
Image Source: TradingView
Should Investors Buy shares in ISSC, TDY and AIR?
Periods of geopolitical uncertainty are going to reward preparation over prediction. Defense and aerospace stocks offer that preparation by aligning portfolios with enduring spending trends that are largely independent of headlines. Teledyne provides stability and quality exposure to the core of the defense ecosystem, AAR adds momentum and earnings acceleration, and ISSC offers huge upside potential as a small-cap name.
For investors looking to position for uncertainty rather than forecast it, these names represent compelling ways to gain targeted exposure to one of the market’s strongest and most resilient sectors.