As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the defense contractors industry, including RTX (NYSE: RTX) and its peers.

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 14 defense contractors stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4% while next quarter’s revenue guidance was 1.1% above.

While some defense contractors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.8% since the latest earnings results.

RTX (NYSE: RTX)

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

RTX reported revenues of $24.71 billion, up 14.5% year on year. This print exceeded analysts’ expectations by 7.8%. Overall, it was an exceptional quarter for the company with full-year EPS guidance exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $196.75.

We think RTX is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q2: Huntington Ingalls (NYSE: HII)

Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.

Huntington Ingalls reported revenues of $3.42 billion, up 10.9% year on year, outperforming analysts’ expectations by 8.2%. The business had an incredible quarter with a beat of analysts’ EPS estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $281.21.

Is now the time to buy Huntington Ingalls? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Parsons (NYSE: PSN)

Delivering aerospace technology during the Cold War-era, Parsons (NYSE: PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.

Parsons reported revenues of $1.58 billion, flat year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EBITDA guidance missing analysts’ expectations significantly.

Parsons delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 24.8% since the results and currently trades at $46.65.

Read our full analysis of Parsons’s results here.

Kratos (NASDAQ: KTOS)

Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.

Kratos reported revenues of $458.8 million, up 30.5% year on year. This result topped analysts’ expectations by 11.6%. It was a very strong quarter as it also recorded a solid beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.

Kratos pulled off the biggest analyst estimate beat and fastest revenue growth among its peers. The stock is down 8.1% since reporting and currently trades at $47.68.

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

CACI (NYSE: CACI)

Founded to commercialize SIMSCRIPT, CACI International (NYSE: CACI) offers defense, intelligence, and IT solutions to support national security and government transformation efforts.

CACI reported revenues of $2.71 billion, up 17.6% year on year. This print surpassed analysts’ expectations by 0.7%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.

The stock is up 23% since reporting and currently trades at $636.95.

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

Market Update

Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.

Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.

By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.

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