What Happened?

Shares of security and Aerospace company Lockheed Martin (NYSE: LMT) jumped 4.2% in the afternoon session after President Trump proposed a significantly higher U.S. defense budget of $1.5 trillion for fiscal 2027. 

This figure was well above prior defense spending expectations and represented a potential 50% increase from the previously planned $1 trillion. The news triggered a broader rally across defense stocks, reversing sharp losses from the previous day when the administration had threatened to restrict dividends and stock buybacks at defense contractors. The proposed surge in spending caused investors to rush back into the sector, with Lockheed Martin recovering all of its recent losses. Other defense companies, including Northrop Grumman and L3Harris Technologies, also saw their stocks climb on the news.

After the initial pop the shares cooled down to $518.84, up 4.4% from previous close.

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What Is The Market Telling Us

Lockheed Martin’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 12 months ago when the stock dropped 8.9% on the news that the company reported underwhelming fourth quarter results, with revenue and earnings both falling below Wall Street's expectations. Its full-year EPS guidance also missed significantly. Notably, this quarter's EPS fell short of Wall Street's estimates because the company recorded a $1.3 billion loss in its Missiles and Fire Control (MFC) business segment. Overall, these results could have been better.

Lockheed Martin is up 4.4% since the beginning of the year, and at $518.84 per share, it is trading close to its 52-week high of $522.04 from January 2026. Investors who bought $1,000 worth of Lockheed Martin’s shares 5 years ago would now be looking at an investment worth $1,544.

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