Defence stocks set for a breakout year in 2026: deVere
Defence stocks now represent one of the most “strategically important opportunities” for investors, asserts the CEO of global financial advisory giant deVere Group.
The analysis from Nigel Green comes as geopolitical pressure forces governments into sustained military spending and long-term security commitments that are reshaping global markets.
He says: “Across Europe, the Middle East, East Asia, the Americas and the Arctic, political decisions are translating directly into defence budgets and procurement pipelines.”
The UK and France have confirmed readiness to deploy forces to Ukraine once a ceasefire is secured, signalling that post-war security will rely on permanent military frameworks rather than temporary guarantees.
In the Middle East, the war involving Israel and Gaza continues to elevate regional risk, reinforcing demand for air defence, intelligence capability and naval protection.
In East Asia, rising pressure between China and Taiwan is accelerating defence investment across the Indo-Pacific, with Washington under president Donald Trump reinforcing allied deterrence.
Latin America and the Arctic now sit firmly inside that global security equation. Recent US military action in Venezuela has underlined Washington’s readiness to project power in its own hemisphere, while renewed strategic focus on Greenland has pushed Arctic security into the top tier of defence planning as competition intensifies over northern sea routes, surveillance infrastructure and missile detection systems.
Nigel Green, chief executive officer of deVere Group, says, “Defence stocks are moving into a year where geopolitical reality is shaping fiscal policy in real time.
“Governments globally are committing capital to military capability at a scale that creates durable demand for the sector.”
This shift marks a clear change in how defence is viewed by markets. The sector has moved from a reactive allocation to a strategic pillar of portfolio construction.
The forces driving defence performance in 2026 are structural rather than cyclical. National security now sits at the centre of economic planning, and that reality is rewriting how risk and opportunity are priced.
Nigel Green says, “Security spending has become one of the most protected areas of government budgets. While other departments face political trade-offs, defence lines are being expanded because leaders understand that military readiness underpins economic stability.”
The implications for defence companies are substantial. Procurement cycles are lengthening, order books are deepening, and investment is accelerating into missile defence, cyber warfare, space-based surveillance, autonomous systems and integrated command platforms.
“These are multi-year programmes backed by sovereign balance sheets, offering a level of earnings visibility that remains scarce across global equity markets,” notes the deVere CEO.
He continues: “Markets are witnessing a global alignment around defence as a strategic necessity. When policy moves in that direction across continents, capital follows.
“Few sectors combine bipartisan backing, long-term contracts and strategic relevance in the way defence now does. This combination gives investors something increasingly rare in today’s markets, confidence in future cash flows.”
Valuations across the sector remain compelling when measured against forward earnings potential and contract backlogs.
Several major defence manufacturers are expanding production capacity to meet rising global demand for air defence interceptors, surveillance technology and battlefield systems, reinforcing expectations of sustained revenue momentum.
Portfolio strategy for 2026 should increasingly reflect this reality, deVere believes.
“Defence exposure now offers more than tactical positioning. Alignment with the dominant forces shaping global policy and capital allocation has become a central consideration for serious investors.
“Defence stocks reflect how the world now operates. Treating the sector as peripheral means misreading where political will and fiscal resources are being directed.”
As geopolitical pressure points multiply from Ukraine to Gaza, from Taiwan to Venezuela, from the Baltic to the Arctic, defence sits at the centre of global economic and strategic planning.
Nigel Green concludes: “Defence equities stand at the intersection of overarching policy, security and technology. This position gives the sector one of the strongest outlooks in markets today.”