Are Defense Stocks Going Through a Storm?
Goldman Sachs recently downgraded defense stocks.
Staff or Guest writer for The Dog of Wall Street.
2023-01-14 11:35

The defense industry has always been a lucrative sector for investors, as it tends to thrive during times of geopolitical turmoil and uncertainty. But, recent developments in the industry have left some analysts questioning whether or not the sector has reached a peak in terms of growth and profitability.Are Defense Stocks Going Through a Storm?
Goldman Sachs recently downgraded defense stocks, citing the current prices as reflective of a global superpower struggle, but not of the possibility of increased defense spending. This has caused stocks such as Raytheon (NYSE: RTX) to take a hit, with shares dropping 2.5%. Northrop Grumman (NYSE: NOC) and Raytheon (NYSE: RTX) also ended in the red.

This shift in sentiment may be due to the fact that defense spending reached a record high last year, with the fiscal 2023 budget in the United States increasing by 10% on the top line. This, coupled with renewed interest in debt and deficit reduction, has led to talks about caps on discretionary spending and potentially pushing defense spending back to levels seen in previous years.

However, analysts have stated that the probability of this occurring is relatively low. This is because, despite the potential for gridlock in D.C., defense spending is still seen as a necessary investment for national security.

But it's not just a matter of national security, it's also about the economy. The defense industry is a major contributor to the economy, providing jobs and stimulating growth in related industries. So, while the sector may not see the same level of growth as it has in recent years, it's still a strong and stable investment.

In fact, the defense industry is often compared to a "cash cow" for investors - a steady source of income that can weather any storm. All in all, while the defense industry may be facing some headwinds, it's still a solid investment for the long-term. The industry is not going anywhere, and the need for defense will always be there. As the famous quote goes, "if you want peace, prepare for war." And, if you want a stable investment, it's best to keep some chips on the defense industry.

Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

3 weeks ago
Good article
Published On
2023-01-14 11:35

About the Author
Staff or Guest writer for The Dog of Wall Street.

You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

What the heck do we do with NVIDIA (NVDA) now?
NVIDIA could continue higher well into the $400s and I wouldn’t be surprised at all. 
By Mike Sakuraba | 1 week ago

Amazon's Ascent in the AI Era: An Unstoppable Force?
Amazon is set to transform our everyday experiences with AI-powered services, although it must navigate potential regulatory headwinds on its path to dominating the AI race.
By Staff | 2 weeks ago

Will Disney's Big Risk Pay Off?
The Political Tussle That Could Redefine an Entertainment Giant.
By Staff | 2 weeks ago

Musk Stays on as CEO: What This Means for Tesla (TSLA)
Tesla is still on track to be the long-term growth stock that many anticipated a few years ago.
By Mike Sakuraba | 2 weeks ago

Inflation Unraveled, a New Economic Normal
As the economy adjusts to a new normal with higher inflation rates and businesses leveraging their power to raise prices without consumer resistance, both consumers and policy makers must adapt their strategies to navigate the shifting landscape.
By Staff | 2 weeks ago

Is NVIDIA (NVDA) a Buy Ahead of its Earnings?
So with its earnings report on deck, what should we do with NVIDIA’s stock? 
By Mike Sakuraba | 2 weeks ago

PayPal's Roller Coaster Ride
Despite recent downturns, PayPal, equipped with its robust resources, strong brand recognition, and technological adaptability, holds potential for future growth through cryptocurrency, buy-now-pay-later services, business lending, strategic partnerships and acquisitions, especially within developing international markets.
By Staff | 3 weeks ago

2 Stocks To Buy After Earnings Sell Offs
When these stocks sell-off, they can provide one of the best buying opportunities of the year.
By Mike Sakuraba | 3 weeks ago