Wrapping up Q1 earnings, we look at the numbers and key takeaways for the defense contractors stocks, including CACI (NYSE: CACI) and its peers.

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 Q1. As a group, revenues beat analysts’ consensus estimates by 3.4% while next quarter’s revenue guidance was 2.3% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

CACI (NYSE: CACI)

Founded to commercialize SIMSCRIPT, CACI International (NYSE: CACI) offers defense, intelligence, and IT solutions to support national security and government transformation efforts.

CACI reported revenues of $2.35 billion, up 8.5% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a solid beat of analysts’ adjusted operating income estimates but full-year EPS guidance slightly missing analysts’ expectations.

“CACI delivered another outstanding quarter, reflecting the strength of our strategy and our continued ability to win in the market with differentiated capabilities and exceptional execution. Closing the ARKA Group acquisition represents another significant strategic step in advancing our ability to address our customers’ most critical missions in high‑growth, high-demand markets,” said John Mengucci, CACI President and Chief Executive Officer.

Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 1.4% since reporting and currently trades at $505.

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

Best Q1: 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 $235.8 million, up 11.5% year on year, outperforming analysts’ expectations by 14.2%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

Mercury Systems pulled off the biggest analyst estimate beat among its peers. The market seems happy with the results as the stock is up 44.2% since reporting. It currently trades at $119.59.

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

Weakest Q1: Lockheed Martin (NYSE: LMT)

Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.

Lockheed Martin reported revenues of $18.02 billion, flat year on year, falling short of analysts’ expectations by 0.9%. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.

Lockheed Martin delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 4.2% since the results and currently trades at $531.99.

Read our full analysis of Lockheed Martin’s results here.

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 $3.10 billion, up 13.4% year on year. This number surpassed analysts’ expectations by 2.6%. It was a very strong quarter as it also produced an impressive beat of analysts’ adjusted operating income and EPS estimates.

The stock is down 18% since reporting and currently trades at $298.

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

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 $4.4 billion, up 3.7% year on year. This print topped analysts’ expectations by 2.8%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA and EPS estimates.

The stock is down 26.4% since reporting and currently trades at $109.52.

Read our full, actionable report on Leidos 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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