Northrop Grumman (NOC) Surged in Q1. Here's Why

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Value Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 500 Index declined by -4.3% in Q1 2025 due to a tariff war and a shift away from AI-related tech stocks. Amid the tech-led sell-off, the benchmark, the Russell 1000 Value Index, outperformed its growth counterpart in the quarter. Against this backdrop, the strategy underperformed the benchmark in Q1. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, ClearBridge Large Cap Value Strategy highlighted stocks such as Northrop Grumman Corporation (NYSE:NOC). Northrop Grumman Corporation (NYSE:NOC) is an aerospace and defense technology company. The one-month return of Northrop Grumman Corporation (NYSE:NOC) was 1.52%, and its shares lost 0.17% of their value over the last 52 weeks.  On May 19, 2025, Northrop Grumman Corporation (NYSE:NOC) stock closed at $471.12 per share with a market capitalization of $67.81 billion.

ClearBridge Large Cap Value Strategy stated the following regarding Northrop Grumman Corporation (NYSE:NOC) in its Q1 2025 investor letter:

"In industrials, defense names RTX and Northrop Grumman led performance as geopolitical tensions remained elevated. Both companies have moved away from fixed-price contracts, and as those contracts have diminished as parts of their business, should see margin expansion over the next few years. European countries have also pledged to increase their spending on defense, which, given the lack of capacity available for European defense companies, should benefit U.S. defense primes."

Northrop Grumman Corporation (NYSE:NOC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Northrop Grumman Corporation (NYSE:NOC) at the end of the fourth quarter, compared to 48 in the third quarter. In the first quarter, Northrop Grumman Corporation (NYSE:NOC) reported revenue of $9.5 billion, down 7% compared to Q1 2024. While we acknowledge the potential of Northrop Grumman Corporation (NYSE:NOC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Northrop Grumman Corporation (NYSE:NOC) and shared the list of best drone stocks to buy according to billionaires. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.