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Lockheed Martin shares have risen nearly 15% since last week's third-quarter results and are up 29% year to date, versus a 12% gain for the S&P 500. The company reported a record backlog of $292 billion, up 63% over the past four quarters from $179 billion, and raised its 2026 free cash flow expectation from a midpoint of $6.65 billion to $7.9 billion. Missiles and Fire Control (MFC) grew sales 24% and contributed nearly 29% of operating profit despite under 22% of revenue, while a seven-year PAC-3 contract is worth $58.6 billion. The stock trades at nearly 23 times trailing P/E versus 18 times for Northrop Grumman, and the author notes the market already prices in much of the expected growth. The author views the company as a growth story for long-term exposure to the defense sector and suggests watching for sustained sales growth that drives higher profit margins.
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Marvell Technology shares fell 13.9% as of 2:44 p.m. ET on Thursday, October 29, after Bloomberg reported that the chipmaker is in advanced talks to acquire Lumentum, a maker of optical components for AI data centers. The report said an announcement could come as early as next week, though nothing has been finalized. Marvell has about $3.93 billion in cash and equivalents, and with Lumentum's $83 billion market cap, the deal is likely to be mostly stock, which would dilute existing shareholders. Marvell's optics acquisition last year was a smaller $3.5 billion deal that included $1 billion in cash. Meanwhile, Marvell's second-quarter revenue rose 37% to a record $2.74 billion.
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