Defense, Solar, and Refining Stocks Split as the Iran Conflict Raises Energy Risk

Key Points

• Renewed escalation in the Iran conflict has lifted oil prices and kept energy-security concerns at the center of the market.
• SAIC’s defense IT exposure and strong fiscal second-quarter results make it a steadier way to play higher national security demand.
• SolarEdge still faces financing and residential-solar headwinds, while Marathon Petroleum has benefited most directly from elevated refining margins.

Months into the war between the United States and Iran, the conflict has entered another period of intensification. The many ups and downs over the last several months, in which a ceasefire has numerous times appeared to be emerging before attacks resume, have provided opportunities for select industries and companies to thrive. Now, with multiple commercial supertankers struck in recent weeks, escalation is prompting a divergence across the market.

As oil remains near multi-week highs, defense contractors are able to benefit from a sustained increase in government outlays. At the same time, concerns about energy security may prompt skittishness among players across the space. Oil refiners are enjoying crack spreads that are close to all-time highs as far as profitability goes. The three companies below represent each of these corners of the market and have responded very differently to the latest round of fighting in the Iran conflict.

SAIC Is a Steady Compounder in the Defense IT Space

Science Applications International Corp. NASDAQ: SAIC plays a pivotal role in intelligence systems, cybersecurity, and mission IT, allowing the contractor to benefit across all phases of a war like the one in Iran. Results for its latest quarter—Q2 fiscal 2027, ended July 31, 2026—were strong across the board, including organic revenue growth of about 5%, adjusted EBITDA of $193 at a 10.3% margin, and $131 million in free cash flow. The company also posted an impressive earnings beat with earnings per share (EPS) of $3.01, 70 cents ahead of estimates, despite this metric being lower on a year-over-year (YOY) basis due to a large legal settlement a year earlier.

SAIC also provided insight into its contract pipeline, which helps make the case for its strengths going forward. A $400-million recompute contract for an unspecified U.S. intelligence agency, coupled with a recompute win rate of more than 90% for the latest quarter, means that SAIC is highly capable of generating new business.

Management boosted fiscal 2027 earnings outlook by 75 cents on the low end and 65 cents on the high end, alongside an increase in anticipated revenue as well. The company's backlog is also robust. In short, SAIC appears to be functioning well in an environment practically designed to ensure its success. One thing that may give investors pause, however, is that after climbing nearly 26% year to date (YTD), SAIC stock may not have as much room to rally in the near term.

SolarEdge’s Recovery Still Faces a Difficult Setup

After several highly tumultuous years, SolarEdge Technologies NASDAQ: SEDG appeared to be an early beneficiary of the Iran war. Shares climbed in the weeks immediately following the onset of U.S.-Israeli strikes and then spiked in early June as European demand rose amid market volatility.

In the time since, however, the picture has gotten cloudier. Even with fairly strong Q2 2026 results—including 20% YOY revenue improvement to more than $346 million and a non-GAAP operating profit for the first time in multiple years, plus gross margin expansion to 28.6%—shares of SEDG have now fallen significantly from those mid-year highs.

Higher energy prices should help to boost solar adoption, which would be a boon for the company. However, rising Treasury yields due to energy-fueled inflation concerns also mean the cost of financing its projects has soared, potentially harming demand. At the same time, a tepid U.S. residential market may also be a drag on SolarEdge's business. The result is a company that, despite a fairly strong set of fundamentals, has an overall Reduce rating across Wall Street analyses.

Marathon Is the Clearest Winner, But Not a Risk-Free One

High gas prices, near-record crack spreads, and concerns about supply have all made for an excellent environment for oil refiners. Marathon Petroleum Corp. NYSE: MPC, one of the world's largest such companies, is no exception.

Marathon's Q2 2026 earnings report was stellar, as Q2 profit surged nearly fourfold to $5.1 billion on a 54% YOY jump in revenue. Adjusted EBITDA more than doubled as well, thanks in large part to excellent crack spreads amid the near-closure of the Strait of Hormuz.

Shares of MPC have predictably shot upward in this environment, climbing over 140% YTD. Analysts remain largely optimistic about MPC's viability for investors, with 12 out of 17 calling shares a Buy even as the stock has surged past the consensus price target of $330.50. Of course, the danger for investors is that the same major catalyst—crack spreads driven by supply concerns—can reverse just as quickly. So while it may seem that Marathon is easily the winner of the three stocks on this list, investors should be mindful that it still carries risks amid a very volatile war.