Let’s dig into the relative performance of Leonardo DRS (NASDAQ: DRS) and its peers as we unravel the now-completed Q2 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 13 defense contractors stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.9% while next quarter’s revenue guidance was 1.1% above.

While some defense contractors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.5% since the latest earnings results.

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 $913 million, up 10.1% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS and EBITDA estimates.

Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 19.8% since reporting and currently trades at $37.30.

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

Best Q2: Huntington Ingalls (NYSE: HII)

Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.

Huntington Ingalls reported revenues of $3.42 billion, up 10.9% year on year, outperforming analysts’ expectations by 8.2%. The business had an incredible quarter with a beat of analysts’ EPS estimates.

The market seems content with the results as the stock is up 4% since reporting. It currently trades at $291.72.

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

Weakest Q2: Parsons (NYSE: PSN)

Delivering aerospace technology during the Cold War-era, Parsons (NYSE: PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.

Parsons reported revenues of $1.58 billion, flat year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.

Parsons delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. As expected, the stock is down 26.3% since the results and currently trades at $45.73.

Read our full analysis of Parsons’s results here.

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 $901.6 million, up 18% year on year. This print met analysts’ expectations. It was a strong quarter as it also recorded full-year EBITDA guidance beating analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

The stock is down 9.5% since reporting and currently trades at $157.26.

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

RTX (NYSE: RTX)

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a variety of products and services to the aerospace and defense industries.

RTX reported revenues of $24.71 billion, up 14.5% year on year. This number beat analysts’ expectations by 7.8%. Overall, it was an exceptional quarter as it also put up full-year EPS guidance exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

The stock is up 3.2% since reporting and currently trades at $201.03.

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

Market Update

Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.

Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.

By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.