As geopolitical tensions mount, from Ukraine to Gaza to Iran, nations are pouring higher quantities of cash into their defense programs — not simply to guard their borders, but additionally to protect in opposition to cyberattacks. Bank of America recognized a number of stocks which might be greatest positioned to revenue from the rising defense sector, a brand new report stated. “Developing greater self-sufficiency in strategic sectors such as Energy and Defense is becoming an increasingly important aspect of resilience at the national level,” the BofA analysts stated in out Tuesday. “The opportunities across advanced defense technologies, their dual-use applications and the value chain are becoming hard to ignore.” As a consequence, world army expenditures are surging. In 2024, defense spending reached $2.7 trillion, or 2.5% of the worldwide GDP, up 9.4% from 12 months earlier than, in keeping with the report. That marks the steepest year-over-year rise in army expenditures for the reason that Cold War. But even past conventional spending on bullets, planes and tanks, “defense technology and dual-use innovations – such as satellite surveillance, autonomous monitoring and cyber defense – are becoming essential components of security resilience. They protect societies from both environmental disruptions and geopolitical shocks,” the BofA analysts stated. Jump in defense spending The BofA report highlights a number of nationwide and regional efforts to bolster safety and safe assets—all of that are poised to spice up world defense spending. In the EU, officers have unveiled a plan to take a position 800 billion euros ($939 billion) to reinforce Europe’s spending on air and missile defense; artillery programs; ammunition and missiles; drones and counter-drone programs; army mobility; AI, quantum, cyber and digital warfare; and strategic enablers and demanding infrastructure. The U.S. has additionally pledged to beef up its already huge army funds. Passed in July, the One Big Beautiful Bill allocates an extra $150 billion to defense spending, notably for the development of the “Golden Dome for America,” a proposed defense system that might defend the U.S. from hypersonic and long-range missiles. Finally, the use of drones for army and infrastructure constructing is booming throughout a number of continents. The rising demand has spurred efforts to create cost-efficient strategies of mass-producing the unmanned gadgets, though BofA additionally argues that “a drone bubble may be forming.” All informed, the financial institution says a number of stocks have room to rally additional. Researchers named a number of of the biggest stocks by market capitalization which might be rated purchase on the funding financial institution and that provide publicity to no less than two of BofA’s safety, know-how and infrastructure-related themes. The financial institution’s inventory picks to capitalize on the pattern embrace Parsons and General Dynamics . Parsons The firm, headquartered about 25 miles west of the Pentagon in northern Virginia, affords crucial infrastructure, cyber and area options for the nationwide safety and intelligence sectors, together with counter-unmanned plane programs, missile defense integration and satellite tv for pc resiliency options. In September, Parsons gained a contract from the National Nuclear Security Administration to ship end-to-end assist for counter-nuclear smuggling programs to nations within the Indo-Pacific area. In June, Parsons joined pressured with IBM and stated it’s going to function prime contractor on a brand new, state-of-the-art air visitors management system. Parsons inventory has jumped 40% within the six months by means of Tuesday. General Dynamics General Dynamics , which makes the U.S. Navy’s submarine fleet at its Electric Boat division , is an aerospace and defense firm that sells armaments and providers to militaries internationally. The firm’s Bath Iron Works builds floor ships for the Navy, whereas its Gulfstream subsidiary makes luxurious, long-range enterprise jets. General Dynamics, additionally based mostly in northern Virginia, has climbed greater than 29% previously six months, greater than double the achieve within the S & P 500 over the identical span. ( Learn one of the best 2026 methods from contained in the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and data right here . )