LMT – Defense Contractors Shun Anthropic AI Tools amid Trump Ban

Defense contractors like Lockheed Martin LMT -1.31% ▼ are complying with the Trump administration’s ban on AI startup Anthropic’s tools. The Pentagon has ordered companies doing business with the U.S. Defense Department to remove all Anthropic AI models from their supply chains. LMT has swiftly followed suit to avoid risking billions in contracts.

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Shares of defense companies like LMT, Northrop Grumman NOC -1.16% ▼ , and RTX RTX -2.66% ▼ are in focus amid the ongoing U.S.-Iran war. They have seen volatility, with two days of surges followed by a decline yesterday during a broader market rout.

Why Trump Banned Anthropic

On February 27, Trump ended a weeks-long dispute with Anthropic over safety guardrails on its Claude AI tools, used by the military. When Anthropic refused the administration’s requirements, Trump banned the company across all federal agencies, with a six-month phase-out. Anthropic plans to challenge the ban in court.

Defense Secretary Pete Hegseth labeled Anthropic as a national security risk in the supply chain. He posted, “Effective immediately, no contractor, supplier or partner that does business with the United States military may conduct any commercial activity with Anthropic.”

Lockheed Martin said it will follow the president’s and Defense Department’s orders. It also noted that the company will see “minimal impacts” from the change since it does not rely on any single AI provider.

LMT Secures $1.9B Defense Contract

LMT is one of the leading players in the aerospace and defense sectors. Today, the company announced that it has secured a $1.9 billion contract to upgrade the C-130J aircraft’s Maintenance and Training System IV (JMATS IV). It is an indefinite-delivery/indefinite-quantity deal for ongoing production, updates, support, and training devices through February 2039. It has a 5-year base period, optional 5-year extension, and 3 more years for deliveries. The Air Force Lifecycle Management Center awarded it, starting with $1,000 from 2026 funds.

Is LMT a Good Long-Term Stock?

Analysts remain cautious about LMT’s long-term outlook. On TipRanks, LMT stock has a Hold consensus rating based on three Buys and 11 Hold ratings. The average Lockheed Martin price target of $659.31 implies 1.3% downside potential from current levels. Over the past year, LMT shares have surged 48.8%.

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