Best AI defense stocks to watch in 2026 feature autonomous drones, swarm control systems and advanced battlefield analytics reshaping modern warfare.
Sectors & Industries
September 5, 2025
Table of Contents
War isn’t just about boots on the ground or jets in the sky anymore it’s about algorithms, autonomy, and real-time data. Artificial intelligence has moved from the lab to the battlefield, powering everything from drones that can fly without GPS, to software that helps generals make split-second decisions, to cybersecurity platforms that defend entire networks before humans can even react.
In 2026, investors have a unique opportunity: some of the most important breakthroughs in AI are happening inside defense companies, both from nimble startups pivoting into military applications and global primes retooling their platforms with autonomy and machine learning.
This guide takes a closer look at the best AI defense stocks to watch in 2026, highlighting the flagship AI products and programs that are reshaping modern warfare—and the companies driving them.
AI Product: Drone Payload Systems for Tactical Missions
BladeRanger began its journey in solar farm maintenance, utilizing its SolarDrone hardware and DeepSolar analytics platform to clean solar panels efficiently and boost energy output by up to 30%. However, in 2025, the company executed a strategic pivot toward defense by inking an exclusive U.S. distribution agreement with Nukkleus Defense Technologies. Under this contract, BladeRanger’s AI-powered drone payload systems—originally developed for precision aerial maintenance—are now being adapted for reconnaissance, surveillance, and tactical operations.
These payloads integrate onboard sensors, computer vision, autonomous target tracking, and real-time analytics—making them suitable for both civilian infrastructure monitoring and military-grade ISR (Intelligence, Surveillance, Reconnaissance) tasks. Their modular design allows rapid integration onto various airframes, from commercial quadcopters to military-grade unmanned aircraft, giving BladeRanger a flexible, dual-use technological backbone.
BladeRanger’s transition into defense neatly exploits its asset-light, dual-use capability model. Instead of investing in manufacturing or becoming encumbered by U.S. defense procurement bureaucracy, it leverages Nukkleus’s supply chain, contracting expertise, and security clearances. This positions BladeRanger to scale rapidly while keeping its capital structure lean.
From an investment standpoint, the timing is compelling: the global drone payload market is forecasted to accelerate from $11.8 billion (2025) to $33.3 billion by 2030, driven by growing military adoption of autonomous ISR systems. BladeRanger’s public listing on the Tel Aviv Stock Exchange (TASE: BLRN) further enhances accessibility for global investors seeking exposure in a micro-cap firm with a clear growth trajectory in AI defense.
Operationally, BladeRanger is building credibility fast—with hints of potential follow-on U.S. DoD contracts and expansion into allied defense markets. While liquidity and scale remain modest, its high-fold growth potential and its ability to convert commercial drone technologies into military-grade solutions make it a uniquely compelling story entering 2026.
Market Performance:
.png)
AI Product: ConductorOS and VANE Systems
BigBear.ai has positioned itself as one of the Pentagon’s most trusted AI partners, building software that fuses data from multiple sensors and assets into a single operational picture. The company’s flagship products include ConductorOS, an orchestration platform that coordinates drones, satellites, and sensors, and VANE (Virtual Anticipation Network), a predictive system that helps identify threats and anticipate battlefield developments.
In 2024 and 2025, BigBear.ai’s technology was put to the test in some of the toughest military environments:
Beyond exercises, BigBear.ai has been embedded in key defense modernization programs. In March 2025, it secured a $13.2 million DoD contract to modernize ORION, the Pentagon’s force-management system. It is also an active contributor to the Army’s Project Lynchpin, integrating AI directly into battlefield operations.
BigBear.ai matters because it is moving from demonstrations to operational deployments, solidifying its role as a core technology provider for the U.S. military. While other defense primes are focused on hardware, BigBear.ai fills a critical gap in AI software orchestration—making sure autonomous drones, sensors, and command systems actually work together on the battlefield.
For investors, BigBear.ai represents one of the purest AI-defense plays on the market. Unlike large primes with diversified portfolios, its business is centered on defense and intelligence analytics, giving it high exposure to the Pentagon’s growing AI budget. With the Department of Defense requesting over $13 billion for autonomous systems in 2025, BigBear.ai stands to benefit from long-term spending trends.
The company’s stock, traded on the NYSE under ticker BBAI, has been volatile but remains a high-growth candidate due to its direct pipeline into U.S. and allied defense programs. As militaries worldwide shift toward AI-driven decision systems, BigBear.ai’s early adoption and proven field testing make it one of the most strategically important AI defense companies heading into 2026.
Market Performance:
.png)
AI Product: XQ-58A Valkyrie “Loyal Wingman” UAV
Kratos Defense & Security Solutions has become one of the most closely watched innovators in unmanned combat aviation. Its flagship program is the XQ-58A Valkyrie, a semi-autonomous “loyal wingman” drone designed under the U.S. Air Force’s Low-Cost Attritable Aircraft Technology initiative. First flown in 2019 at Yuma Proving Ground, the Valkyrie has evolved into a modular AI-enabled platform capable of flying alongside F-22s, F-35s, and F-15s. It can carry weapons inside an internal bay, conduct electronic warfare, perform reconnaissance, and detect battlefield threats in real time.
By 2025, the Valkyrie had moved beyond prototypes into live military exercises:
Kratos has also been testing additional variants of the Valkyrie, including electronic warfare models and strike-capable versions, while simultaneously developing other autonomous platforms like the Mako and Air Wolf drones. This breadth of AI-enabled UAV projects reinforces Kratos as a pure-play defense innovator.
Kratos matters because it is proving that AI-driven autonomy can be deployed at scale—not just in controlled tests but in real-world military exercises. Unlike larger primes with diverse portfolios, Kratos is laser-focused on affordable, rapidly deployable unmanned systems, making it a crucial partner for the Pentagon’s push to expand drone fleets without escalating costs.
For investors, Kratos has been one of the fastest-growing defense stocks, with its valuation rising sharply as demand for autonomous systems accelerates. The company’s position as a mid-tier defense contractor allows it to remain agile, securing contracts with the Air Force, Navy, and Marine Corps while pursuing international customers. Its smaller size compared to Lockheed or Northrop means higher volatility, but also outsized growth potential as militaries invest heavily in loyal wingman drones and AI-enabled air combat systems.
With the Pentagon’s long-term strategy emphasizing unmanned teaming and swarm operations, Kratos is uniquely positioned as the company most directly tied to AI autonomy in combat aviation—making it one of the most important AI defense stocks to watch in 2026.
Market Performance:
.png)
AI Product: LBA Systems Joint Venture
Leonardo, Italy’s largest defense contractor, made a decisive entry into the AI-driven defense race at the 2025 Paris Air Show. There, it announced the formation of LBA Systems, a 50/50 joint venture with Turkey’s Baykar, best known for producing the Bayraktar TB2 drones that have been widely used in modern conflicts.
The joint venture is designed to create next-generation combat UAVs with heavy reliance on artificial intelligence. These drones will feature:
Leonardo has already mobilized resources from its facilities in Turin, Rome, and Grottaglie to accelerate development. By combining Baykar’s proven drone combat platforms with Leonardo’s avionics and payload systems, LBA Systems is aiming to deliver NATO-grade AI drones competitive with U.S. and Chinese offerings.
Leonardo’s pivot is significant because it marks a transformation from a traditional aerospace and defense supplier into a frontline competitor in AI-enabled combat systems. The creation of LBA Systems ensures that NATO and European allies will have indigenous access to AI-powered UAVs without relying entirely on imports from the U.S. or Israel.
From an investment perspective, Leonardo has enjoyed strong momentum: its stock more than doubled in 2025, fueled by new contracts, increased orders from allied militaries, and its push into autonomous systems. The acquisition of Iveco Defence Vehicles in July 2025 also expanded Leonardo’s land systems portfolio, strengthening its ability to integrate AI not only in the skies but also across ground operations.
As militaries worldwide accelerate adoption of AI-powered drones, Leonardo’s combination of European credibility, international partnerships, and expanding product lines makes it a standout stock. For investors seeking exposure to AI defense technology in 2026, Leonardo (LDO) represents one of the clearest plays on Europe’s growing autonomy and AI-driven combat strategies.
Market Performance:
.png)
AI Product: Oxford Dynamics Integration into Prophesea
BAE Systems, the UK’s largest defense contractor, has accelerated its AI capabilities through a strategic equity investment in Oxford Dynamics, a London-based deep-tech startup specializing in real-time autonomous decision systems. The collaboration focuses on embedding Oxford Dynamics’ AI technology into Prophesea, BAE’s logistics and asset management platform.
PropheSEA is already used by militaries to manage fleets of warships, armored vehicles, and combat aircraft. With Oxford’s AI, the platform gains predictive capabilities—automatically anticipating equipment failures, suggesting optimal maintenance schedules, and ensuring combat systems remain operational in high-pressure environments. Beyond asset management, BAE is also layering machine learning into its electronic warfare systems, C4ISR suites, and next-gen combat vehicles, strengthening resilience in contested electromagnetic environments.
BAE Systems matters because it is shifting from being a traditional hardware-focused contractor into a leader in AI-enabled defense operations. This transformation aligns directly with the UK’s Strategic Defence Review, which prioritizes rapid innovation and sovereign capabilities in artificial intelligence and autonomous systems.
From an investor perspective, BAE has been one of the strongest performers among European defense stocks. Its shares climbed more than 35% in 2025, supported by increased defense budgets, export contracts, and the rising demand for AI-driven systems. With customers across NATO, the Middle East, and Asia-Pacific, BAE enjoys broad geographic reach and a growing reputation for integrating AI into both battlefield operations and support infrastructure.
For those looking at AI defense stocks in 2026, BAE Systems (BAESY) offers exposure to a company that combines global scale, sovereign credibility, and direct investment in breakthrough AI startups. Its ability to merge cutting-edge software with traditional defense platforms makes BAE one of the most comprehensive AI defense plays available to investors.
Market Performance:
.png)
AI Product: Adversarial AI Security & aiSSEMBLE Toolkit
Booz Allen Hamilton is the U.S. government’s go-to integrator for secure AI systems across defense and intelligence. In 2025, it rolled out adversarial-testing suites to harden Pentagon AI models against real-world vulnerabilities like data poisoning, model theft, or manipulation. These include techniques such as adversarial training, red teaming, and differential privacy—critical for ensuring that battlefield AI cannot be tricked or corrupted during missions.
To deepen its expertise, Booz Allen Ventures also made a strategic investment in HiddenLayer, a startup whose MLSec platform detects and blocks cyberattacks against machine-learning models in real time. Beyond defense, Booz Allen has released aiSSEMBLE, an open-source AI engineering toolkit built for federal programs. aiSSEMBLE standardizes development pipelines for AI, making it easier for the Department of Defense to move projects from R&D into secure deployment.
Booz Allen Hamilton matters because it sits at the intersection of AI innovation and AI security, ensuring that advanced models are not only powerful but also trusted in the harshest operational environments. The U.S. government already spends billions annually on AI modernization, and Booz Allen’s unique position as a systems integrator allows it to win contracts across all branches of the military and intelligence community.
For investors, Booz Allen’s role is strategic: while defense primes like Lockheed or Raytheon build hardware, Booz Allen ensures that AI software systems remain mission-ready and resilient against cyber threats. With more than 2,000 AI scientists and engineers working directly on federal projects, Booz Allen has the scale and expertise to maintain long-term relevance in the defense AI sector.
Its stock (NYSE: BAH) has faced pressure due to volatility in 2025, but the company’s deep pipeline of defense contracts and its leadership in AI assurance and security make it a vital long-term AI defense play. In 2026, as military reliance on autonomous systems grows, Booz Allen Hamilton’s expertise in trusted AI deployment could make it one of the most critical enablers of the Pentagon’s AI strategy.
Market Performance:
.png)
AI Product: Maven Smart System
Palantir is one of the most recognized names in defense AI, with its platforms deeply embedded across the U.S. military and NATO. In 2025, the company secured a $10 billion U.S. Army contract to integrate AI into logistics, command, and intelligence systems a landmark deal that made Palantir one of the Pentagon’s largest software suppliers.
At the same time, Palantir deployed its Maven Smart System with NATO, giving allied forces a shared AI brain to fuse sensor data and streamline battlefield command. Maven narrows down thousands of simultaneous data streams—radar, drone feeds, satellite imagery—into actionable intelligence, helping commanders cut through noise and make informed decisions in seconds.
Palantir’s existing platforms, Gotham (used by intelligence agencies) and Foundry (used for logistics and operations), are also being increasingly tailored for defense-specific AI workflows such as predictive maintenance of equipment, mission planning, and supply chain optimization under combat stress.
Palantir matters because it is turning AI into an operational advantage, moving beyond data analytics into direct battlefield applications. With NATO and the U.S. Army both adopting its systems, Palantir is now one of the most globally entrenched AI defense providers. Its ability to synchronize allies’ systems is strategically crucial ensuring that multi-nation coalitions operate on the same intelligence picture during conflicts.
From an investment standpoint, Palantir offers a pure AI defense software play that scales differently than hardware contractors. Unlike Lockheed or Raytheon, Palantir does not build aircraft or missiles; instead, it builds the decision-making layer that allows those platforms to operate cohesively in the field. With defense budgets worldwide earmarking billions for AI modernization, Palantir’s contract wins point to long-term recurring revenue.
For investors in 2026, Palantir (PLTR) combines commercial AI credibility with defense dominance, making it a key stock for those seeking exposure to AI-driven national security technologies. Its role in the U.S. Army’s modernization efforts and NATO’s joint operations solidifies it as one of the most strategically important AI defense companies in the world.
Market Performance:
.png)
AI Product: AMORPHOUS™ Swarm Control Platform
L3Harris has emerged as one of the most aggressive adopters of AI in multi-domain operations. In February 2025, the company unveiled AMORPHOUS (Autonomous Multi-domain Operations Resiliency Platform for Heterogeneous Unmanned Swarms), an open-architecture command-and-control platform.
AMORPHOUS allows a single operator to control thousands of unmanned assets across air, land, sea, and space. Unlike traditional systems, it gives drones and vehicles decentralized autonomy—allowing each platform to adapt in real time, reroute missions, and redistribute tasks if others fail. This design makes the swarm resilient even if communications are jammed or partially degraded.
Beyond swarm technology, L3Harris has also invested heavily in counter-drone systems, advanced ISR sensors, and AI-enabled electronic warfare. Its VAMPIRE platform, originally developed as a counter-UAS system, is now being tested with AI targeting layers to better detect and intercept autonomous threats.
L3Harris matters because it is building the connective tissue for future autonomous warfare. With AMORPHOUS, the company isn’t just adding AI to individual drones—it is enabling coordinated, leaderless swarm operations, a concept the U.S. Army and Defense Innovation Unit have already tested in live exercises. This approach is central to the Pentagon’s Joint All-Domain Command and Control (JADC2) initiative, which aims to integrate every sensor and shooter into a seamless AI-driven network.
From an investor standpoint, L3Harris offers exposure to one of the most advanced AI swarm-control platforms in the market. The company’s defense-heavy portfolio, combined with international contracts in Europe and NATO, has kept its revenue base stable and its stock performance strong. As militaries prioritize unmanned teaming and resilient AI-enabled C2 systems, L3Harris (LHX) is well positioned to remain a leader in this segment through 2026 and beyond.
Market Performance:
.png)
AI Product: Hivemind Autonomy for MQ-28 Ghost Bat
Boeing has been steadily pushing into AI autonomy through both internal R&D and external partnerships. In early 2025, its advanced development unit, Phantom Works, signed a strategic partnership with Shield AI to integrate the company’s Hivemind autonomy software into Boeing’s defense platforms. This includes the MQ-28 Ghost Bat, an autonomous “loyal wingman” UAV originally developed in Australia, which is now being adapted for U.S. and allied operations. With Hivemind onboard, Ghost Bat gains GPS-denied autonomy, allowing it to navigate and execute missions in contested environments where satellite guidance is jammed or unavailable.
Beyond drones, Boeing’s AI work extends to predictive maintenance and logistics across its defense and commercial aircraft. The company’s venture arm, HorizonX, has invested in AI startups like Shift5, which develops real-time avionics cybersecurity and anomaly detection software, and other firms working on data analytics for mission systems. Boeing’s AI efforts are also being tested on autonomous teaming and manned-unmanned integration for fighters, helicopters, and surveillance aircraft.
Boeing matters because it brings scale, integration, and global reach to the AI defense market. While smaller firms like Kratos and BladeRanger focus on niche systems, Boeing has the industrial capability to mass-produce AI-enabled aircraft and deliver them to multiple allied militaries worldwide. Its collaboration with Shield AI is particularly important, since it enables Boeing to leverage proven autonomy software instead of building everything in-house—accelerating the timeline for fielding operational AI drones.
From an investor perspective, Boeing provides exposure not only to AI-enabled defense technologies but also to dual-use commercial aviation applications, where AI is being applied to fleet maintenance, safety systems, and autonomous flight research. With its stock rebounding after prior setbacks, Boeing (BA) is positioned to benefit from the Pentagon’s growing focus on autonomy and the global demand for AI-enabled unmanned systems. For 2026, Boeing represents a large-cap AI defense stock with both strategic partnerships and proprietary development efforts driving its AI future.
Market Performance:
.png)
AI Product: Hivemind-Enabled Missiles & ViDAR Targeting Pods
Raytheon Technologies has been embedding artificial intelligence into its weapons and sensors to make them smarter, faster, and more resilient in modern battlefields. In 2025, Raytheon deepened its partnership with Shield AI, integrating the company’s Hivemind autonomy software into loitering munitions and tactical sensors. This allows missiles and drones to operate cooperatively and independently in denied environments, where traditional GPS and communications may be disrupted.
Raytheon also incorporated ViDAR (Visual Detection and Ranging) into its seekers and targeting pods. ViDAR uses AI-powered computer vision to automatically detect swarms, fast-moving threats, and hidden targets that human operators or legacy sensors might miss. These enhancements directly improve Raytheon’s loitering munitions, naval targeting systems, and missile defense products.
Additionally, Raytheon has taken on a mentoring role through U.S. Navy contracts, supporting AI startups such as Anacapa and Nara Logics. These collaborations focus on accelerating the deployment of AI decision-making technologies for the Department of Defense, helping smaller innovators bring autonomy and adaptive decision systems into mission-critical applications.
Raytheon matters because it combines scale, global reach, and AI integration in some of the most widely deployed systems in the world. From Patriot missile batteries to Tomahawk cruise missiles, Raytheon has begun layering AI into platforms that already form the backbone of U.S. and allied defense strategies. By embedding Hivemind and ViDAR into these legacy systems, Raytheon is effectively giving decades-old platforms a second life with AI autonomy, extending their relevance in modern warfare.
Financially, Raytheon (RTX) has been one of the strongest-performing defense stocks, gaining more than 35% in 2025. With contracts spread across the U.S., NATO, and Middle East allies, Raytheon enjoys a global defense footprint that few can match. For investors, this means exposure to a company that is not only modernizing its existing systems with AI but also actively supporting the broader defense AI ecosystem through mentorship and partnerships.
In 2026, Raytheon stands out as one of the most significant large-cap AI defense stocks because of its ability to operationalize AI at scale across missiles, radars, and autonomous munitions—all while anchoring critical defense alliances worldwide.
Market Performance:
.png)
AI Product: AI-Enabled Forward Area Air Defense (FAAD) Battle Manager
Northrop Grumman has been embedding AI into its missile defense, space, and unmanned systems portfolios. In October 2024, the company unveiled a major upgrade to its Forward Area Air Defense (FAAD) battle manager, equipping it with AI algorithms capable of fusing incoming threats—drones, rockets, and missiles—and generating firing solutions in under 0.25 seconds. This upgrade was validated in live-fire tests at the Yuma Proving Ground, where FAAD’s AI-directed targeting outpaced human decision-making by orders of magnitude.
Beyond air defense, Northrop is developing multifunction adaptive sensors that use machine learning to automatically shift detection modes based on evolving threats, allowing warfighters to respond dynamically without manual recalibration. The company has also partnered with NVIDIA to apply AI to space robotics, training autonomous agents for spacecraft docking, orbital maneuvering, and mission planning through NVIDIA’s Omniverse and Isaac simulation frameworks.
Northrop Grumman matters because it is applying AI not just in one domain, but across air defense, space, and autonomous platforms—making it one of the most diversified AI defense contractors. By bringing AI into FAAD, Northrop has already demonstrated a battlefield-ready system where autonomy directly saves lives and counters high-volume drone and rocket attacks. Its work in adaptive sensors ensures its platforms remain effective in contested electromagnetic environments, while its space initiatives highlight the growing importance of AI in orbital operations and future conflicts beyond Earth.
From an investor standpoint, Northrop Grumman (NOC) has delivered steady performance, with its shares gaining nearly 20% in 2025 as demand for missile defense and unmanned systems surged. With a strong global customer base—including NATO allies and Asia-Pacific militaries—Northrop’s AI-driven innovations are expected to generate both recurring defense contracts and international sales growth.
For 2026, Northrop Grumman stands out as a multi-domain AI powerhouse, making it one of the most strategically important AI defense stocks for investors seeking stability and innovation in equal measure.
Market Performance:
.png)
AI Product: Red Dragon Autonomous Attack Drone
AeroVironment has long been known as a pioneer in unmanned systems, with products like the Switchblade loitering munition and the RQ-11 Raven widely used by the U.S. military. In May 2025, the company unveiled its most advanced AI-driven platform yet: the Red Dragon, a new class of fully autonomous unmanned aircraft built for one-way attack missions in GPS-denied and communications-degraded environments.
The Red Dragon is built on AeroVironment’s AVACORE software architecture, a modular platform that can be applied across aerial, land, and maritime domains. Equipped with the SPOTR-Edge AI perception system, Red Dragon is able to detect, classify, and prioritize targets automatically without continuous human input. The system adapts mid-mission, executing tasks autonomously even when jammed or cut off from satellite navigation.
AeroVironment’s AI innovation isn’t limited to Red Dragon. Its Switchblade series of loitering munitions are being upgraded with AI-enhanced targeting and flight-control software, while its family of ISR drones (Puma, Raven, and Wasp) are being integrated into broader AI-driven command-and-control systems for multi-domain operations.
AeroVironment matters because it provides combat-ready autonomy at scale. Unlike experimental prototypes, the Red Dragon was designed for mass production and rapid deployment, giving the Pentagon and its allies a reliable way to field large fleets of AI-enabled drones quickly. Its proven track record with existing systems like Switchblade ensures credibility, while its AI-powered next-gen platforms push the company into the future of autonomous warfare.
From an investor perspective, AeroVironment (AVAV) offers exposure to both near-term defense demand and long-term AI growth. The U.S. military and allied nations are ramping up procurement of loitering munitions and autonomous ISR platforms, markets where AeroVironment is already a leader. With its blend of field-proven platforms and next-generation AI systems, the company has positioned itself as a key enabler of the Pentagon’s shift toward autonomous and distributed warfare strategies.
For 2026, AeroVironment stands out as the mid-cap defense stock that bridges the gap between established primes and smaller startups—delivering autonomy that is not just conceptual but already battlefield deployable.
Market Performance:
.png)
AI Product: Hybrid Autonomous VTOL Aircraft (Defense Pivot)
Archer Aviation, best known for its electric vertical takeoff and landing (eVTOL) aircraft for urban mobility, made a decisive pivot into defense beginning in late 2024. In December 2024, Archer partnered with Anduril Industries to co-develop hybrid, autonomous VTOL military aircraft, bringing its commercial aviation expertise into direct alignment with Pentagon requirements for autonomy and rapid deployment.
By August 2025, Archer reinforced this strategy with two major acquisitions:
These moves position Archer to deliver AI-powered aircraft capable of vertical lift, autonomous navigation, and hybrid propulsion—ideal for missions in dense urban zones or forward-deployed bases where runways are scarce.
Archer matters because it is transforming from a commercial air taxi startup into a dual-use defense contractor, targeting one of the Pentagon’s most ambitious spending areas: autonomous aerial systems. The Department of Defense requested $13.4 billion for autonomous systems in 2025, and Archer’s vertical-lift platforms directly align with those funding priorities.
From an investor perspective, Archer Aviation (ACHR) offers exposure to both the fast-growing commercial eVTOL sector and the rapidly expanding defense autonomy market. Few companies straddle these two opportunities as directly. Its acquisitions ensure it can prototype quickly, manufacture at scale, and meet military certification requirements without depending solely on outside contractors.
As militaries look for new platforms that can combine survivability, autonomy, and rapid deployment, Archer is positioning itself as a credible supplier of AI-enabled vertical-lift combat aircraft. For 2026, it stands out as a newcomer-turned-contender, bridging commercial innovation with military-grade autonomy.
Market Performance:
.png)
AI Product: Astris AI Subsidiary & AI Fight Club
Lockheed Martin is arguably the most aggressive of all defense primes when it comes to embedding artificial intelligence into its platforms. On December 16, 2024, it launched Astris AI, a wholly owned subsidiary dedicated to deploying secure AI tools across the U.S. defense industrial base. One of Astris AI’s flagship projects is the AI Fight Club—a simulation environment where AI models are pitted against each other in complex multi-domain combat scenarios spanning air, land, sea, and space. The competitions, set to begin in late 2025, are designed to identify weaknesses, refine models, and fast-track the deployment of the most robust AI systems into military use.
Beyond Astris, Lockheed is embedding AI across nearly every tier of its operations:
Lockheed Martin matters because it is not just experimenting with AI—it is operationalizing autonomy at scale. With defense budgets soaring, Lockheed’s ability to integrate AI into both legacy platforms and future weapons systems ensures it will remain at the center of U.S. and allied modernization. The Astris AI subsidiary is especially significant, because it provides a dedicated structure for scaling AI across the defense industrial base, partnering with both large primes and smaller innovators.
From an investor perspective, Lockheed Martin (LMT) combines the stability of a global defense leader with the growth opportunity of cutting-edge AI. Its contracts span across NATO and Indo-Pacific allies, giving it unmatched global reach. While many defense primes are layering AI onto existing systems, Lockheed is proactively building an AI-first ecosystem that will shape how wars are fought over the next decade.
For 2026, Lockheed Martin stands out as the cornerstone AI defense stock—a large-cap player with both proven contracts and pioneering AI initiatives that set the standard for the industry.
Market Performance:
From BladeRanger’s micro-cap payload drones to Lockheed’s Astris AI subsidiary, these companies show how artificial intelligence is becoming the backbone of modern defense. Whether it’s swarm control, predictive maintenance, autonomous UAVs, or secure battlefield data fusion, AI is moving from prototype to operational deployment.
For investors, 2026 is a rare convergence: soaring defense budgets, rising geopolitical demand, and rapid AI adoption. These AI defense stocks are not only shaping tomorrow’s battlefields but also opening some of the most compelling opportunities in the global markets.
Catching stocks like Kratos, Palantir, or AeroVironment right as they announce game-changing AI defense projects can be the difference between riding a breakout move or missing it entirely. That’s where LevelFields AI makes the difference.
The platform scans thousands of company events like contract wins, product launches, or leadership changes—and alerts you in real time when something happens that’s likely to move a stock.
For defense investors, this is powerful. Imagine being notified the moment a contractor like L3Harris unveils new swarm-control software, or when Lockheed Martin launches an AI subsidiary focused on autonomous combat. These are the exact catalysts that trigger the biggest market reactions.
LevelFields AI doesn’t just deliver the headline—it shows you historical win rates, average price impact, and timeframes based on past events, giving you a clear roadmap for trading or investing around defense catalysts.
Instead of getting buried in endless news feeds, you can zero in on the events that matter most—and act with confidence. That’s why both active traders and long-term investors use LevelFields AI to track defense-related AI announcements and build smarter positions.
The top three AI stocks often depend on whether you’re looking for broad AI exposure or specific niches like defense. NVIDIA (NVDA) is considered the backbone of the AI revolution, supplying GPUs that power training models across industries, including defense simulations. Palantir Technologies (PLTR) is a leading AI defense stock, with long-term contracts from the U.S. Army and NATO to provide battlefield decision systems. Microsoft (MSFT) rounds out the list, integrating AI into its Azure cloud platform, enterprise software, and defense partnerships, including Department of Defense cloud and AI projects. These three give investors exposure to hardware, defense-focused software, and enterprise AI ecosystems.
During geopolitical conflict, investors often turn to defense contractors that supply weapons, surveillance, and cybersecurity tools. Historically, Lockheed Martin (LMT) and Northrop Grumman (NOC) benefit from increased demand for aircraft, missile defense, and space-based assets. Raytheon Technologies (RTX) is another strong pick, with deep exposure to missile systems, radars, and AI-powered munitions. In recent years, Kratos Defense (KTOS) and AeroVironment (AVAV) have emerged as more focused AI and drone plays, making them potential high-growth stocks during wartime spending surges. These companies don’t just profit from contracts—they also play a critical role in shaping modern defense strategy.
Elon Musk co-founded xAI, a private company focused on creating AI systems that compete with OpenAI, Google DeepMind, and Anthropic. Since xAI is not publicly listed, there is currently no direct “Elon Musk AI stock” to invest in. However, investors seeking indirect exposure often consider Tesla (TSLA), which heavily integrates AI into its self-driving technology, robotics, and energy optimization systems. Musk also runs SpaceX (private) and has hinted at crossovers between xAI and Tesla products, suggesting that TSLA may benefit most from his AI ventures in the public markets.
Some of the best AI-driven stocks span across different sectors. NVIDIA (NVDA) dominates AI hardware, supplying chips used in everything from ChatGPT to autonomous drones. Palantir Technologies (PLTR) leads in AI for defense and intelligence, with contracts like the U.S. Army’s $10 billion AI modernization deal. Alphabet (GOOGL) is a leader in AI research and cloud infrastructure, while C3.ai (AI) focuses on enterprise AI applications across industries. For defense-focused investors, Lockheed Martin (LMT) and L3Harris (LHX) are standout names, embedding AI into combat systems, swarm drones, and multi-domain command platforms.
Globally, the leaders in AI are NVIDIA, Microsoft, Alphabet, Amazon, and Meta, which dominate infrastructure, software, and research. These companies shape the commercial AI space with cloud computing, generative AI, and large language models. In defense, leadership looks different: Palantir leads in decision-making AI, Lockheed Martin is embedding AI across its aircraft and missile systems, Raytheon is building AI-enabled munitions, and Northrop Grumman has operational AI in its air defense systems. Together, these players highlight how leadership in AI depends on whether you’re looking at consumer, enterprise, or defense applications.
AI stocks under $10 tend to be more speculative but can offer significant upside. BigBear.ai (BBAI) is one of the best-known names, working directly with the U.S. Department of Defense on AI orchestration platforms like ConductorOS and VANE. Another niche player is BladeRanger (TASE: BLRN), a micro-cap listed in Tel Aviv, which pivoted from solar drones into defense with AI-powered payload systems for reconnaissance and tactical missions. Investors should be cautious with low-priced AI stocks—they can be volatile—but these names represent direct exposure to emerging AI defense technologies at an accessible price point.
Among large-cap companies, NVIDIA (NVDA) has shown the fastest growth, driven by surging demand for GPUs used in AI training and inference. Its revenue growth in 2023–2025 outpaced nearly all peers, cementing its role as the foundation of the AI ecosystem. In the defense sector, BigBear.ai (BBAI) has grown quickly thanks to long-term Pentagon contracts and multinational military exercises, while C3.ai (AI) has seen rapid adoption across enterprise clients. On the smaller-cap side, Kratos Defense (KTOS) has expanded rapidly in AI-enabled drones, showing how growth is being fueled not only by commercial tech but also by AI-driven military modernization.
Join LevelFields now to be the first to know about events that affect stock prices and uncover unique investment opportunities. Choose from events, view price reactions, and set event alerts with our AI-powered platform. Don't miss out on daily opportunities from 6,300 companies monitored 24/7. Act on facts, not opinions, and let LevelFields help you become a better trader.
AI scans for events proven to impact stock prices, so you don't have to.
LEARN MORE
:max_bytes(150000):strip_icc()/INV_Booz_Allen_Hamilton_Headquarters_GettyImages-2158483310-2144462f788746d3a9d191b4d58d2640.jpg){kind=link}
