Best stocks: Defense, including these 2 names, may be in secular bull market as global conflicts mount

Geopolitical tensions, particularly escalations in Iran, have spurred gains in energy and aerospace/defense stocks, with WTI crude up 7% following recent attacks. Axon Enterprise (AXON) and RTX Corp (RTX) are highlighted as breakout stocks benefiting from increased defense spending and security concerns; analysts suggest adjusting stop-loss orders to $665 for AXON and $130 for RTX, or using the 50-week moving average around $120 as a trailing stop for longer term investors. While geopolitical events create short-term opportunities, the long-term value of these stocks depends on structural trends, positioning them as strategic portfolio hedges against global volatility.

Analysis

Recent geopolitical escalations, particularly events in Iran, have significantly influenced market dynamics, leading to sharp price gains in specific aerospace, defense, and energy equities. Notably, West Texas Intermediate (WTI) crude experienced a 7% increase following the attack in Iran. Within the aerospace and defense sector, Axon Enterprise (AXON) and RTX Corp (RTX) have demonstrated significant breakouts since being highlighted approximately a month prior to the article's date of June 16, 2025. For AXON, the breakout prompts a suggested adjustment of the investment stop-loss to its rising 50-day moving average near $665. RTX, a prominent supplier of rockets, missile systems, and aircraft engines, is anticipated to maintain its uptrend despite a recent volume spike and an RSI reading above 70; analysts propose that traders might consider the $130 level to reduce exposure, while long-term investors could use the 50-week moving average around $120 as a trailing stop. In the energy sector, performance among selected stocks has been varied over the past month: Expand Energy Corporation (EXE), up 2.8%, and Williams Companies (WMB), up 2.7%, outperformed the S&P 500's 1.6% gain. Conversely, EQT Corp (EQT) at +0.9% and Kinder Morgan (KMI) at +0.7% underperformed the benchmark. The broader market assessment points towards a potential secular bull market for defense-oriented stocks, driven by persistent global conflicts, positioning these and energy stocks as valuable portfolio hedges against geopolitical instability, although long-term value remains tied to structural and secular trends rather than isolated geopolitical events.

Key Decisions for Investors

• Given the assertion of a secular bull market in defense stocks due to ongoing global tensions, investors might consider maintaining or establishing long-term positions in names like AXON and RTX, potentially allowing for wider stop-loss parameters.
• Investors holding Axon Enterprise (AXON) should evaluate raising their stop-loss to the rising 50-day moving average near $665, while RTX Corp (RTX) holders could use the 50-week moving average around $120 as a trailing stop for investment positions, or the $130 area for traders to consider reducing exposure.
• Exercise selectivity within the energy sector; while geopolitical events like the Iran attack boosted WTI crude by 7%, individual stock performance varies, with EXE and WMB outperforming the S&P 500 recently, unlike EQT and KMI.
• Strategically utilize aerospace and energy stocks as portfolio hedges against geopolitical volatility and for their potential counter-cyclical performance, rather than viewing them solely as short-term reactionary investments to specific conflicts.