Sitting at the center of rising global defense spending, Lockheed Martin LMT and Palantir Technologies PLTR stock are standing out amid increased geopolitical tensions, with both spiking sharply on Monday following weekend news that the U.S. and Israel launched renewed military operations against Iran.
While sentiment for the broader aerospace and defense sector is high at the moment, Lockheed Martin and Palantir are among the direct beneficiaries.
To that point, Lockheed Martin supplies the physical systems — fighter jets, missile defense, and advanced weapons — while Palantir provides the digital infrastructure that helps the U.S. government and its allies interpret threats, coordinate responses, and optimize operations through its AI-enhanced platforms.
In modern warfare, both capabilities are indispensable, and geopolitical instability tends to amplify demand for each.
Rising Demand for Defense Hardware & Intelligence Systems
Lockheed Martin’s fighter jets have been active in several military operations within the past year related to the Ukraine-Russia conflict and are being pulled forward for deployment and repositioning near Iran.
This mostly includes Lockheed Martin’s renowned F-16 and F-35 fighter jets. Notably, the F-35 has been involved in significant testing of AI-enabled capabilities, indicating rapid movement toward more autonomous combat systems. Ongoing modernization efforts suggest these aircraft will play even larger roles in future conflicts. Additionally, Lockheed Martin is a key producer of missile defense systems and is scaling production at record levels due to heightened global demand.
It’s noteworthy that Lockheed Martin most recently reported a record $194 billion backlog during its Q4 report in late January, underscoring the scale of future contracted work.
As for Palantir, its intelligence and AI platforms are being embedded in NATO and U.S. operations across multiple conflict zones. Palantir’s AIP platform and Ontology framework are powering NATO command systems and have led to more than $10 billion in U.S. defense contracts. These systems help militaries operate under pressure, with Palantir becoming a core digital infrastructure provider for military decision-making, battlefield intelligence, and national-level threat analysis.
Lockheed Martin’s Enticing Value
Hitting an all-time high of $692 a share in Monday’s trading session, Lockheed Martin stock is still attractively valued given its robust top and bottom lines.
LMT trades beneath the benchmark S&P 500 and its Zacks Aerospace-Defense Industry average in terms of price to forward sales and earnings at 2X and 22X, respectively. Supporting its favorable valuation, Lockheed Martin’s total sales are expected to increase 5% this year to $78.84 billion, with FY26 EPS projected to spike 29% to $29.81.
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Lockheed Martin’s 2% annual dividend yield is also appealing to income-seeking investors, with most of its industry peers having payouts below the benchmark’s 1.09%.
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Palantir’s Compelling Growth
Justifying its stretched valuation has been Palantir’s compelling growth since going public in 2020, benefiting from both increased defense spending and commercial adoption for its AI platforms in regard to streamlining business operations.
At $145 a share, Palantir stock has also experienced a healthy correction from its all-time high of $212, which it hit this past November.
Moving further past the profitability line, Palantir trades at 102X forward earnings, but FY26 EPS is projected to leap 78% to $1.34, versus $0.75 per share last year. Reassuringly, FY26 sales are projected to be up 60% to $7.22 billion, with high double-digit top and bottom line growth in the forecast for FY27 as well, as opposed to Lockheed Martin’s single-digit projections but glaring value.
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Conclusion & Strategic Thoughts
Lockheed Martin and Palantir offer distinct but complementary reasons to be in investors’ portfolios right now, especially in an environment shaped by rising geopolitical tensions, expanding defense budgets, and accelerating adoption of defense-oriented technologies.
Together, they provide exposure to both the hardware backbone and the software intelligence layer of modern national security.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
