Let’s dig into the relative performance of BWX (NYSE: BWXT) and its peers as we unravel the now-completed Q4 defense contractors earnings season.

Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds.

The 14 defense contractors stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 0.8% below.

While some defense contractors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.2% since the latest earnings results.

BWX (NYSE: BWXT)

Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE: BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.

BWX reported revenues of $885.8 million, up 18.7% year on year. This print exceeded analysts’ expectations by 5.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ revenue and EPS estimates.

“We delivered a strong fourth quarter, and a record year for BWXT,” said Rex D. Geveden, president and chief executive officer.

Interestingly, the stock is up 17.1% since reporting and currently trades at $232.25.

We think BWX is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q4: Leonardo DRS (NASDAQ: DRS)

Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ: DRS) is a provider of defense systems, electronics, and military support services.

Leonardo DRS reported revenues of $1.06 billion, up 8.1% year on year, outperforming analysts’ expectations by 7%. The business had an exceptional quarter with an impressive beat of analysts’ revenue and EBITDA estimates.

The market seems happy with the results as the stock is up 25.7% since reporting. It currently trades at $47.94.

Is now the time to buy Leonardo DRS? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: AeroVironment (NASDAQ: AVAV)

Focused on the future of autonomous military combat, AeroVironment (NASDAQ: AVAV) specializes in advanced unmanned aircraft systems and electric vehicle charging solutions.

AeroVironment reported revenues of $408 million, up 143% year on year, falling short of analysts’ expectations by 14.6%. It was a softer quarter as it posted full-year revenue and EBITDA guidance missing analysts’ expectations.

AeroVironment delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. As expected, the stock is down 15.9% since the results and currently trades at $186.40.

Read our full analysis of AeroVironment’s results here.

Leidos (NYSE: LDOS)

Formed through the split of IT services company SAIC, Leidos (NYSE: LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.

Leidos reported revenues of $4.21 billion, down 3.6% year on year. This print lagged analysts' expectations by 2.5%. Zooming out, it was a mixed quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ revenue estimates.

The stock is down 8.8% since reporting and currently trades at $160.84.

Read our full, actionable report on Leidos here, it’s free.

Mercury Systems (NASDAQ: MRCY)

Founded in 1981, Mercury Systems (NASDAQ: MRCY) specializes in providing processing subsystems and components for primarily defense applications.

Mercury Systems reported revenues of $232.9 million, up 4.4% year on year. This result topped analysts’ expectations by 10.4%. It was a very strong quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

The stock is down 18.7% since reporting and currently trades at $80.69.

Read our full, actionable report on Mercury Systems here, it’s free.

Market Update

Late in 2025 into early 2026, there was hand wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?

These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.

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