BAE Systems (LSE: BA) soared another more than 5% this morning (March 2). Babcock (LSE: BAB) share price also rose slightly. These two FTSE100 Defense stocks have already soared due to geopolitical tensions. As the conflict in Iran intensifies, they are once again trying to improve the situation. Will anything be able to stop them?

These days, nothing stands in their way. both FTSE100 Stocks skyrocketed after Russia invaded Ukraine in 2022, and have only climbed higher since then. BAE Systems’ share price is up 52% ​​in the past 12 months and 336% in five months, and its dividend is among the best. Babcock International Group’s performance is even more impressive. The company’s stock price has increased 104% in one year and 420% in five years.

FTSE100 offensive sector

Europe is rearming against President Vladimir Putin and now has Iran to worry about. If China moves against Taiwan, it could quickly score a hat trick. This doesn’t take into account the unpredictable reactions within the White House. It’s a sad reflection on humanity.

These multiple threats certainly make UK defense stocks an attractive proposition, but investors need to tread carefully. Old investment rules still apply, so be careful not to chase past performance or overpay for assets.

Both BAE Systems and Babcock are expensive by traditional standards, currently trading at 27 times earnings. This is comfortably higher than the current FTSE 100 average of around 18 times.

To explain these numbers further, BAE Systems’ average P/E over the past 10 years has been approximately 18x. Over the past decade, Babcock’s P/E ratio has fallen to 3.5x. But a plunge in revenue due to the pandemic has skewed those plans.

Increased profits and backlog

BAE Systems’ full-year results for February showed underlying operating profits for 2025 rose 12% to £3.32bn, beating expectations. Order backlog reached a record high of £83.6bn, while net debt fell by 22% to £3.84bn. Babcock’s last full set landed on November 21st. Underlying operating profit rose 19% to £201m, with contract balances reaching £9.9bn.

But recently, investors have begun to show caution. BAE Systems and Babcock shares are actually lower than they were a week ago, as investors doubt they are pushing their stocks as high as possible at this point. Some people may have profited from it.

A conflict with Iran is currently priced in, so something else may be needed to lift Iran further. That could come in the form of the UK announcing a significant increase in defense spending, or winning another large contract. On the other hand, both stocks could pull back in the short term if some kind of peace agreement is reached. At least until the next threat appears.

It’s interesting to see BAE Systems rising much faster than Babcock today, but not all that surprising. This is a bigger, broader defense and a go-to stock for investors in times of distress. Also, Babcock has outperformed recently, and investors may feel that BAE will flex its muscle.

For investors looking for exposure to the defense sector, both stocks are worth considering over the long term. Stock prices won’t rise forever, but sadly today the winds of war are firmly on BAE Systems and Babcock’s side.