American Defense Playbook 2025: Critical Minerals at the Frontline
Navigating the 2025 Defense Boom: Where Geopolitics, Minerals, and Markets Collide

The defense industry in July 2025 is a thriving hub of opportunity, propelled by surging global defense budgets, escalating conflicts, and critical mineral shortages. From small-cap firms securing vital resources to large-cap leaders driving military innovation, the sector is riding a wave of geopolitical tensions and the pressing need for resilient supply chains. This article dives into the defense market’s growth, offering investors a clear lens on the trends, numbers, and strategies shaping 2025’s high-stakes landscape.
Large and Small Defense Stocks: Opportunities in a Dynamic Market
The defense sector is a two-tiered arena where giants and upstarts battle for supremacy. Large-cap heavyweights like Northrop Grumman (NYSE: NOC), with a $70 billion market cap, dominate with next-gen aircraft and space systems, securing long-term government contracts that keep cash flowing (1). Lockheed Martin (NYSE: LMT), boasting a $110 billion market cap, rules with its F-35 Lightning II program, a global staple with orders stretching years into the future (2). These titans thrive on stability, backed by the U.S. Department of Defense’s $886 billion budget for 2025 (3).
Small-cap stocks, however, are the scrappy contenders stealing the spotlight. AeroVironment (NASDAQ: AVAV), with a $12 billion market cap, has soared thanks to its drones, which have proven their mettle in Ukraine’s muddy battlefields, delivering pinpoint strikes that outsmart bulkier systems (4). Ducommun (NYSE: DCO), valued at $1.3 billion, is carving a niche in aerospace components, riding the wave of rising defense budgets (5). Military Metals Corp (CSE: MILI | OTCQB: MILIF), a $21.3 million small-cap player as of May 2025, focusing on antimony exploration with projects like West Gore in Nova Scotia, Last Chance in Nevada and Trojarova in Slovakia (6). With antimony critical for munitions and batteries, Military Metals is trying to position itself as a potential player in addressing U.S. supply chain vulnerabilities, especially as China tightens export controls (7). For investors seeking a diversified play, the iShares U.S. Aerospace & Defense ETF (ITA), with $6 billion in assets, blends the stability of giants with the growth potential of smaller firms like Military Metals (8).
