The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how RTX (NYSE: RTX) and the rest of the defense contractors stocks fared in Q1.

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 13 defense contractors stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 3.4% while next quarter’s revenue guidance was 1.7% below.

In light of this news, share prices of the companies have held steady as they are up 2.3% on average since the latest earnings results.

RTX (NYSE: RTX)

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.

RTX reported revenues of $22.08 billion, up 8.7% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates.

"RTX delivered a very strong start to 2026 with organic sales and adjusted operating profit growth* across all three segments, driven by our continued focus on execution and delivering our backlog," said RTX Chairman and CEO Chris Calio.

RTX delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 8.1% since reporting and currently trades at $179.98.

Is now the time to buy RTX? Access our full analysis of the earnings results 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.

Mercury Systems scored the biggest analyst estimate beat among its peers. The market seems happy with the results as the stock is up 38.6% since reporting. It currently trades at $115.00.

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 softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

Lockheed Martin delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 3.2% since the results and currently trades at $537.50.

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 print surpassed analysts’ expectations by 5.9%. Overall, it was a stunning quarter as it also put up a solid beat of analysts’ EBITDA estimates.

The stock is up 10.9% since reporting and currently trades at $347.97.

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

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 result topped analysts’ expectations by 2.7%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.

BWX delivered the fastest revenue growth among its peers. The stock is down 7.9% since reporting and currently trades at $199.51.

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

Market Update

Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?

These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.

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