2 Defense Stocks to Buy as Global Military Spending Climbs
2026-09-26 12:30
•Todd Shriber •The Motley Fool
• • Axe Cap view
South Africa’s Defense Link to Rising Global Military Budgets
RTX’s expanding backlog reflects broader defense spending trends, offering a cautious read-through for JSE investors.
Global military spending just hit $2.9 trillion, and U.S.-focused RTX leads with a $289 billion order book poised to grow. While RTX isn’t on the JSE, their backlog growth parallels rising demand for defense tech worldwide, which does ripple through our market in subtle ways. South African defense stocks aren’t exactly blockbuster plays, but companies like Barloworld and Motus, which supply logistics and equipment to security sectors, might quietly benefit from higher government budgets diverted to defense. Meanwhile, the USD/ZAR remains key—defense imports and contracts often price in dollars, so a weaker rand adds cost pressure. The flipside? Global budget blowouts could prompt tighter fiscal policies here, squeezing discretionary spending and infrastructure investment. Investors should watch USD/ZAR closely as a pulse on cost pressures tied to global defense procurement. this is just our opinion and not financial advice
We recommend a selective watch stance on Barloworld and Motus, given their indirect exposure, while keeping an eye on USD/ZAR staying above 18.50—if it dips meaningfully lower, cost pressures ease and these names may become more attractive.
- USD/ZAR
- Barloworld
- Motus
- Rand volatility undermining import costs
- South African government budget cuts limiting defense sector growth
6/10
With global military spending reaching $2.9 trillion annually, defense contractors RTX and Honeywell Aerospace are positioned to benefit from increased government defense budgets. RTX boasts a $289 billion backlog that could reach $460 billion by 2028, driven by U.S. military replenishment needs and international demand. Honeywell Aerospace, recently spun off as a standalone company, is investing $500 million to expand domestic facilities and capture more Department of Defense contracts.
Our take is based on reporting first published by The Motley Fool.
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