Analysis indicates that while data analytics company Palantir saw a significant stock price surge after reporting strong earnings, investors should consider lower-valued traditional defense stocks due to its high price-to-earnings (P/E) ratio of 150. The article recommends Lockheed Martin (P/E 22) and General Dynamics (P/E 24) as alternative investments to capitalize on the growth in US defense spending.

Lockheed Martin recently secured a $35 billion contract to quadruple the production rate of THAAD missile interceptors, bringing its backlog to a record $230 billion. It also raised its full-year revenue guidance to over $80 billion and free cash flow to over $7 billion. General Dynamics, as a primary contractor for nuclear-powered submarines, saw its backlog increase to $136.5 billion, with a book-to-bill ratio of 1.4, and raised its full-year revenue guidance to $55.7 billion.