The end of the earnings season is always a good time to take a step back and see who shined (and who didn’t). Let’s take a look at how defense contractors stocks fared in Q1, starting with BWX (NYSE: BWXT).

Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds.

The 14 defense contractors stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 4.2% while next quarter’s revenue guidance was 2.3% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.8% since the latest earnings results.

BWX (NYSE: BWXT)

Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE: BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.

BWX reported revenues of $860.2 million, up 26.1% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ EBITDA and EPS estimates.

“We started 2026 with strong results,” said Rex D. Geveden president and chief executive officer.

Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 19.5% since reporting and currently trades at $174.40.

We think BWX is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q1: Mercury Systems (NASDAQ: MRCY)

Founded in 1981, Mercury Systems (NASDAQ: MRCY) specializes in providing processing subsystems and components for primarily defense applications.

Mercury Systems reported revenues of $235.8 million, up 11.5% year on year, outperforming analysts’ expectations by 14.2%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

The market seems happy with the results as the stock is up 14.6% since reporting. It currently trades at $95.09.

Is now the time to buy Mercury Systems? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Lockheed Martin (NYSE: LMT)

Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.

Lockheed Martin reported revenues of $18.02 billion, flat year on year, falling short of analysts’ expectations by 0.9%. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and full-year revenue guidance slightly missing analysts’ expectations.

Lockheed Martin delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. As expected, the stock is down 7.6% since the results and currently trades at $513.

Read our full analysis of Lockheed Martin’s results here.

General Dynamics (NYSE: GD)

Creator of the famous M1 Abrahms tank, General Dynamics (NYSE: GD) develops aerospace, marine systems, combat systems, and information technology products.

General Dynamics reported revenues of $13.48 billion, up 10.3% year on year. This number beat analysts’ expectations by 5.9%. It was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates.

The stock is up 18.2% since reporting and currently trades at $370.91.

Read our full, actionable report on General Dynamics here, it’s free.

Huntington Ingalls (NYSE: HII)

Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.

Huntington Ingalls reported revenues of $3.10 billion, up 13.4% year on year. This result topped analysts’ expectations by 2.6%. Overall, it was a very strong quarter as it also put up a beat of analysts’ EPS estimates.

The stock is down 25.1% since reporting and currently trades at $272.

Read our full, actionable report on Huntington Ingalls here, it’s free.

Market Update

Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.

Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.

By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.