What's Gone Wrong With Defense Stocks in 2023 (and Why They Could Be Buys Now)

It hasn't been a great year for defense stocks. The likes of the RTX (NYSE: RTX), General Dynamics (NYSE: GD), and Lockheed Martin (NYSE: LMT) are all in negative territory in 2023, and the defense businesses of General Electric (NYSE: GE) and Boeing (NYSE: BA) have both had significant issues this year. What's wrong with the sector, and how should investors look at investing in it? Here's the lowdown.

The chart below shows the performance of the stocks mentioned above. General Electric is the only one that's outperformed the S&P 500 index, mainly because its defense business only represented around 7.6% of its revenue in the year's first half -- GE's operational outperformance has come from other areas of its business.