For years, the U.S. has boasted the world's most powerful military... But as you would expect, that title comes with an expensive price tag.

Defense Companies Are Poised to Keep Getting Bigger By Vic Lederman, publisher, Chaikin Analytics For years, the U.S. has boasted the world's most powerful military... But as you would expect, that title comes with an expensive price tag. Last year alone, the U.S. government spent a staggering $997 billion on defense. That's more money than the next nine countries combined. As a percentage of the economy, few other countries spend as much on defense than the U.S. does... From 1960 to 1980, America's spending on defense hardly fell below 5% of GDP. In 1967, near the height of the Vietnam War, that figure soared to nearly 10%. Between 1980 and 2024, defense spending averaged 4.4% of GDP. In short, tens of trillions of dollars have been spent on defense so that America's military remains the most powerful in the world. That amount of spending has drawn plenty of criticism. But it has also been a boon for our country's defense contractors. A handful of these firms now rank as some of the biggest companies in the world... For example, Lockheed Martin (LMT) makes the modern fighter jets that give U.S. air superiority. These include the F-16 Fighting Falcon, F-22 Raptor, and F-35 Lightning II. Today, Lockheed is worth about $108 billion. RTX (RTX) is another big name in the space. The company makes the Patriot missile system and Tomahawk cruise missile. It also supplies the engine used in the F-35. RTX currently has a roughly $211 billion market cap. Meanwhile, Palantir Technologies (PLTR) also has huge government contracts. Its software forms the backbone of many U.S. government arms – including defense and intelligence. Palantir is going to be a big part of America's military in the age of AI. And it's a big reason the company is now worth a massive $363 billion. Looking ahead, these companies (and others like them) are poised to get much bigger. It comes down to a big reason in particular... 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The amount the U.S. government spends on defense relative to GDP is likely to go much higher in the coming years. That's because of China. By now, its military is likely the second-most powerful in the world. Officially, China spends about a third what the U.S. spends on its military. But the country is capable of building things faster and cheaper. As a result, China now has more tanks, artillery, and naval ships than the U.S. In a few more years, it will likely have more fighter aircraft and submarines. Meanwhile, China's economy continues to grow around 4.5% to 5% a year. That outpaces America's annual GDP growth. So China's defense spending will keep on growing. And the only way for the U.S. to stay ahead is to keep spending more. A couple decades ago, China wasn't considered a military rival to the U.S. Today, it is. And that doesn't look like that will change in the foreseeable future. As such, keep your eyes on defense companies... In a world where China is rising militarily, these businesses are set to keep benefiting from big military spending. And turning to the Power Gauge, our system says that defense stocks look appealing right now... In our system, we can measure defense stocks with the iShares U.S. Aerospace & Defense Fund (ITA). The fund holds a basket of the biggest companies involved in U.S. aerospace and defense. Today, ITA earns a "very bullish" rating in the Power Gauge. Out of the 34 rated stocks in ITA, 19 have a "bullish" or better grade right now. And none of them have a "bearish" or worse rating. Of course, it won't be a straight line up for defense stocks in the years ahead. But right now, the Power Gauge is picking up on strength for this corner of the market. Pay attention to defense stocks today. Good investing, Vic Lederman Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 -0.45% 12 12 6 S&P 500 -0.29% 142 235 121 Nasdaq +0.14% 27 54 19 Small Caps +0.5% 726 1015 288 Bonds +1.52% Real Estate +1.01% 1 16 14 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bullish. Major indexes are mixed. *  *  *  * Sector Tracker Sector movement over the last 5 days Communication +2.96% Consumer Discretionary +1.45% Health Care +0.34% Information Technology +0.16% Consumer Staples +0.11% Real Estate -0.31% Materials -0.35% Industrials -0.71% Utilities -1.01% Financial -1.7% Energy -3.35% *  *  *  * Industry Focus Bank Services 62 35 0 Over the past 6 months, the Bank subsector (KBE) has outperformed the S&P 500 by +1.11%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #2 of 21 subsectors. Top Stocks ABCB Ameris Bancorp AX Axos Financial, Inc. ASB Associated Banc-Corp *  *  *  * Top Movers Gainers AVGO +9.41% ENPH +8.57% MU +5.76% POOL +5.47% SWK +4.92% Losers LULU -18.58% KVUE -9.35% AMD -6.58% SCHW -5.72% FAST -4.54% *  *  *  * Earnings Report Earnings Surprises ABM ABM Industries Incorporated Q3 $0.82 Missed by $-0.13 *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. You're receiving this e-mail at STEVENMAGALLANES520.NIMS@BLOGGER.COM. For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized financial advice. © 2025 Chaikin Analytics, LLC. All rights reserved. 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