When investors think of military-related artificial intelligence (AI) stocks, Palantir Technologies (PLTR +0.43%) It comes to mind often. Considering the company’s role in finding Osama bin Laden and its use of AI to provide analytical insights, you can hardly blame them.
Palantir’s P/E ratio of 215x makes it difficult for investors to make a bull market on the stock. But these investors should know that it’s not the only defense tech stock connected to AI. These three stocks could benefit as militaries increasingly seek the benefits of AI as conflicts erupt around the world (including the current war with Iran).
Image source: Getty Images.
Nvidia
Nvidia (NVDA 0.22%) It remains popular for its dominance in the AI accelerator market. Still, of all the uses that investors tend to cite, defense-related uses of the technology rarely enter the discussion.
But military applications are actually Nvidia’s focus. As an example, the company installed a DGX GB300 system at the U.S. Naval Postgraduate School. Along with this, the Navy has been exploring AI in operations, robotics, and maritime research.
Additionally, the Department of Defense uses the company’s AI for logistics, planning, data analysis, and training for self-driving vehicles, including fighter jets. In addition, foreign militaries are also leveraging Nvidia’s AI, leading to increased surveillance and export restrictions on the technology.
Today’s changes
(-0.22%) $-0.44
current price
$198.43
Key data points
Market capitalization
$4.8 trillion
daily range
$195.82 – $199.84
52 week range
$95.04 -$212.19
volume
13K
average volume
178M
gross profit
71.07%
dividend yield
0.02%
All of this strengthens Nvidia’s bullish case. Its net income for fiscal 2026 (ending January 25) increased by 65%, and it remains on a rapid growth trajectory despite a market capitalization of $4.6 trillion.
Even though a P/E of 39x is reasonable given its growth rate, such a market capitalization often deters growth investors. So even if its high market cap lowers its earnings multiple, NVIDIA is on track to continue to outperform the market, and its military applications should give investors another reason to buy the stock.
microsoft
microsoft‘s (MSFT +2.20%) In recent years, the cloud has received less attention in defense-related applications. But the company’s Azure Government platform is one way Microsoft can make money from AI.
Azure is also one of the few cloud providers certified under the Joint Warfighting Cloud Capability (JWCC). This allows applications like Azure Arc to manage hybrid environments from data centers to tanks in the field. Additionally, products such as Microsoft Mesh can perform tasks such as mission planning and hardware repair.
Products such as digital twins enable battlefield simulation and training. Additionally, Microsoft enables data sharing by managing permissions secured through a Zero Trust security architecture.
Today’s changes
(2.20%) $9.04
current price
$420.26
Key data points
Market capitalization
$3.1 trillion
daily range
$412.14 – $420.82
52 week range
$355.67 – $555.45
volume
561K
average volume
38M
gross profit
68.59%
dividend yield
0.83%
Over the past four quarters, Microsoft reported net income of more than $119 billion, up 29% annually, but with a market capitalization of $2.9 trillion, it faces some of the same size-related challenges as Nvidia.
Still, the P/E ratio is 24 times, near the lowest level in several years. This suggests that holding Microsoft stock could make investors feel more secure in these uncertain times, as the market becomes more aware of the company’s role in military applications.
palo alto networks
Investors tend to see palo alto networks (PANW +1.74%) As a more general cybersecurity company with multiple security suites. Government-related products may not receive as much attention as next-generation firewalls or Prisma Cloud, but they play an important role in defense. This includes solutions from recently acquired Israeli-based cybersecurity company CyberArk.
One of the products is Golden Dome, a zero trust solution that integrates satellites, interceptors, radars, and tactical systems into one integrated defense solution. Other products include FedRAMP High, which protects government clouds that require the highest level of security. Additionally, Palo Alto designed its solution to work on-site and in the cloud, making it suitable for both central headquarters and the battlefield.
Today’s changes
(1.74%) $2.86
current price
$166.97
Key data points
Market capitalization
$136 billion
daily range
$165.00 -$170.25
52 week range
$139.57 -$223.61
volume
15K
average volume
11M
gross profit
73.50%
Thanks in part to these products, operating profit increased by 50% over the subsequent 12 months. Net income for the period was $1.3 billion, but profits were largely unchanged thanks to a one-time income tax benefit in the previous fiscal year.
Other notable financial metrics include a market capitalization of $133 billion. This makes Palo Alto smaller than many military AI-enabled companies. Also, while the P/E ratio of 90 makes it look expensive, the Forward P/E ratio of 44 suggests that the valuation is more reasonable.
After all, with established government ties and rising business revenue, Palo Alto’s stock price could rise if the conflict continues to escalate.
