Traditionally, conflict has been a profitable endeavor for the U.S. defense industry, with the nation’s production capacity expansion during the Second World War doing much to secure the country’s global dominance in the last 80 years.
In 2026, the situation remains similar, despite many observers turning cynical on the phenomenon, and most major companies that belong to the military-industrial complex have seen significant stock market gains since President Donald Trump, in coordination and collaboration with Israel, launched its latest war against Iran.
With multiple strong contenders in the sector, Finbold decided to examine the relevant firms and find the best two defense stocks to purchase this week as the conflict in the Persian Gulf rages on.
Why Rtx Corporation stock is a buy this week
The Rtx Corporation (NYSE: RTX) – formerly known as Raytheon – is a particularly strong contender for equity purchase in the week starting on Monday, March 9.
Specifically, while the company has a broad lineup that ranges from aircraft components to cybersecurity solutions, its manufacturing of the Patriot air defense missiles could be its critical moat in early 2026.
Indeed, in the current air war against Iran, the biggest danger from the Islamic Republic comes from its missile and drone programs, and the Gulf Countries have already reportedly fired more than 1,000 interceptors.
Additionally, the rate of fire has been such that these nations are allegedly running out of defenses, indicating that Rtx will be required to manufacture, sell, and ship vast quantities of munitions.
Similar logic can be applied to the Terminal High Altitude Area Defense (THAAD) system as, despite its primary maker being Lockheed Martin (NYSE: LMT), the weapon depends on many subcontractors, including Rtx.
Elsewhere, RTX stock might also benefit from President Donald Trump’s request that the American military-industrial complex quadruple production to feed the machine of war and his drive to increase the U.S. defense spending to $1.5 trillion.
So far, RTX shares are up 6.92% in the last 30 days and have risen 3.52% since the war started to their latest closing price of $209.76.30.
Risks of buying RTX stock this week
Lastly, investors should take into account that purchasing RTX stock is not riskless. For example, the Patriot system as a whole has, for a long time, been suspected of not being as efficient as advertised, and should the ongoing conflict reinforce the notion, the defense giant could suffer the consequences in the financial market.
Simultaneously, the reports that the U.S. is moving air defense assets from South Korea and into the Middle East hint that production quotas and timetable might have, so far, not been sufficient for the conflict, with no clear indication of how this might translate into future performance.
Why Palantir stock is a buy this week
While not as traditional a component of the U.S. defense industry as firms like Rtx or Northrop Grumman (NYSE: NOC), Palantir (NASDAQ: PLTR) is deeply embedded across numerous agencies and services within the government, including with the Department of War (DoW).
Additionally, Palantir’s importance for the military has only grown in recent years due to the use of the Maven Smart System (MSS) by the armed forces, including during the ongoing aerial campaign against Iran.
PLTR stock has also reacted strongly to the hostilities and has, in fact, outperformed the traditional war stocks. At the most recent closing bell, Palantir shares were trading at $157.16 after rising 14.56% since the war started and 9.97% in the last 30 days.
Risks of buying Palantir stock this week
While Palantir has arguably been generally competent with its contracts with the American and other governments, the new artificial intelligence (AI) programs are yet to see extensive real-world testing, especially against major opponents with the capability to defend themselves.
Under the circumstances and considering the dubious quality of many commercial AI platforms, there is a degree of danger of unexpected failures that could shake the PLTR stock price.
One possible example of at least some of the issues a military powered by artificial intelligence might face has been the alleged targeting of a park in Tehran called ‘Police Park.’
Considering the bombing took place during the American-Israeli attacks on emergency services in Iran, the supposed incident raised the suspicion among some observers that at least some of the targets were chosen by software with little or no human oversight.
The alleged incident also highlights that the carnage that might be unleashed by AI-powered military systems might lead to public backlash that could also impact the Palantir stock.
Israeli military AI has already been dubbed a ‘Mass Assassination Factory’ by at least one prominent outlet, while the boycott targeting OpenAI after it entered an agreement with the DoW highlights the danger PLTR shares might face.
Featured image via Shutterstock
