# Pentagon spending hits near-record on Iran war — ride the defense rally in Lockheed, Raytheon, and Northrop

_AI-generated trading idea · LONG · LMT, NOC, RTX_

> Canonical page: https://commonquant.ai/research/for-you/pentagon-spending-hits-near-record-on-iran-war-ride-the-defe--d59dfb7b-80d9-4df7-91ee-696cfbaa39b5

The U.S. just reported its second-highest defense spending orders ever, driven by the ongoing conflict with Iran. On the same day, reports emerged that the Pentagon is considering directly funding drone companies.

## Idea

Defense spending orders just hit their second-highest level in history because of the Iran conflict, and that spending has to flow somewhere — mostly to the big contractors like Lockheed Martin, Raytheon, and Northrop Grumman. On top of that, the Pentagon is reportedly looking at directly backing drone makers, signaling even more government money heading into the sector. When orders surge this sharply, it typically takes quarters for the revenue to show up in earnings, which means the stock rally often has legs well beyond the initial headline. Even if a ceasefire materializes, the hardware already ordered won't be cancelled.

## Key details

- Symbols: LMT, NOC, RTX
- Timeframes: 1D
- Tags: \#defense, \#geopolitical, \#momentum

## Community

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## News sources

- [US Defense Orders Surge to Near-Record Amid War With Iran](https://www.bloomberg.com/news/articles/2026-05-28/us-defense-orders-surge-to-near-record-amid-war-with-iran) — Bloomberg
- [Unusual Machines and other drone stocks surge on report Pentagon considering stakes in the industry](https://www.cnbc.com/2026/05/28/drone-stocks-unusual-machines-donald-trump-equity-stake.html) — CNBC

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