Defense stocks such as Kratos, AeroVironment, Ondas, Northrop Grumman and L3Harris are trading as if global leaders had turned into pacifist hippies, which is probably not the case. x.com 

Theon International is a European defense company with excellent management, executing a roll-up strategy with huge tailwinds from European defense spending. Focused on night vision, it just bought a counter-drone company. Fundamentals improved in the latest quarter, yet the stock is down big on broad defense-market bearishness and sits within 10% of its trailing lows. x.com 

Government spending is defense's version of AI hyperscaler capex but more dependable, and the market isn't pricing it in. Global defense is seen at $3T+ for 2027 versus about $1T of hyperscaler capex, and the Pentagon seeks $80B in wartime spending on top of a $1.5T budget. With Lockheed Martin, Northrop Grumman, Kratos, AeroVironment, AEVEX and Kraken Robotics 24-58% off highs, capital could rotate back soon, especially if institutions diversify from AI, rewarding contrarians in 3-6 months. … Show more

Curtiss-Wright is not cheap at $511 despite falling about 30% since early August, and leadership is in flux. The CFO is stepping down on top of a CEO change on January 1. It remains a 5x stock over ten years, and it is mainly a defense company with a commercial aerospace side business, not the reverse, at a time when defense stocks are struggling. The key question is whether aerospace has legs. x.com 

CACI International looks cheap at about 14x EV/EBITDA given its optionality in electronic warfare, Iron Dome-style missile defense and laser or optical space transmission. x.com 

Electro Optic Systems, nLIGHT and LightPath are defense stocks to own as forward multiples may compress with no high-profile conflicts in sight. US and European rearmament is unchanged and earnings should grow solidly for two to three years, but upside may take patience. Well-managed, profitable firms with backlog growth in the fastest-growing niches should hold up better than cash-burning drone makers. EOS's UAE joint venture, laser contract and $124 million RWS contract add optionality. x.com 

European defense tech clearly leads US peers in battlefield impact, getting real-world combat validation years ahead of most legacy US primes' roadmaps. US allocators still treat Europe's sovereignty buildout as a sentiment trade rather than the multi-year EU procurement policy it actually is. This answers @LarsenJensenUSA asking whether European defense tech has had a greater battlefield impact than American firms. x.com 

Rising regional conflicts and soaring NATO spending commitments favor defense companies such as Rocket Lab and RTX, which carry massive multi-year backlogs. Rocket Lab, a $40 billion space launch and defense technology player, is up about 2,700% from its lows. RTX is up a more modest 69% but acts as a remarkably safe, high-yielding haven when institutions rotate. Both sit on the winning side of a 2026 market where money is rotating into favored sectors rather than lifting the whole index. x.com 

BAE Systems is a straightforward buy because the new era of defense spending is geopolitical, not cyclical, as NATO and allies rearm for a decade and Europe can no longer count on US protection. Long-cycle contracts and a record £80bn-plus backlog give visible revenue, sales grow steadily at 8-10%, and dividends rise about 8% a year. Its cyber, electronic and next-gen air systems have proven vital, and government-backed demand protects margins. It is no longer cheap, but quality rarely is. x.com 

The best valuation-adjusted European and Asian defense names are probably not the obvious winners such as Saab and Rheinmetall, where much of the easy multiple expansion already happened. In Europe, Leonardo ranks first, then BAE Systems. In Asia, Korea Aerospace Industries and Hanwha Aerospace lead, followed by LIG Nex1 and Hyundai Rotem. Per @eliant_capital, this year's geopolitical developments mean European and Asian defense companies are still likely headed a lot higher. x.com  x.com