President Donald Trump is proposing setting U.S. military spending at $1.5 trillion in 2027, citing “troubled and dangerous times.”

Defense stocks pay relatively high dividends, but there are alternative areas of the market for investors to consider if they want steady income.

The president offered few details in his post on Truth Social, other than to say the money would pay for his “Dream Military.”

President Donald Trump caused some commotion for investors in U.S. defense contractors this week. First, Trump criticized the companies for taking too long to produce military equipment and also failing to maintain it while at the same time paying out billions in dividends and stock buybacks to investors.

The US raid on Venezuela and tensions over Donald Trump’s plans for Greenland have refocused attention on global military spending, handing fresh impetus to Europe’s rallying defense stocks.

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered: Section 1.  Purpose.

Defense stocks spiked a day after Trump sent the sector tumbling with his comments that he wouldn't allow buybacks and dividends from defense firms.

This could turn out to be a double-edged sword for Kratos. On the one hand, Kratos is already experiencing strong revenue growth, with an average annual increase of 12% over the last five years. A $1.5 trillion defense budget could turbocharge that growth.