Will Defense Stocks Soar on Trump's $683 Billion Budget Boost?
The Congressional Budget Office (CBO) has laid out the bull case for defense stocks, concluding in a report that the full military buildup advocated by the Trump Administration would boost spending by $683 billion over the next decade. Those would be massive gains, but investors would be wise to hold off on making stock purchases based on this report.
The report excluded overseas contingency-operations funding because they are, by nature, hard to predict. It does include Trump campaign promises that call for increasing the Navy fleet by 25%, to 355 vessels, and expanding the Air Force by five additional fighter squadrons. Those orders would create windfalls for General Dynamics (NYSE: GD) and Huntington Ingalls (NYSE: HII), the nation's two primary military shipbuilders, and for F-35 fighter manufacturer Lockheed Martin (NYSE: LMT), among others.
A Lockheed Martin F-35A fighter, which figures to be a significant part of any military buildup. Image source: Lockheed Martin.
Source: Fool.com
