Key Takeaways Defense ETFs outperformed in 2025 as global conflicts and NATO's higher spending targets boosted the sector.SHLD and PPA may benefit as Q4 earnings reveal how backlogs convert into revenue growth.Rising AI, cybersecurity and tech adoption are expanding revenue streams for diversified defense companies.The narrative of 2025 was defined by a historic decoupling — while the broader market grappled with tariff volatility and high interest rates, the defense sector operated in a league of its own. ...