The Zacks Aerospace-Defense industry continues to benefit from rising global defense spending, military modernization initiatives, and intensifying geopolitical tensions worldwide.
Demand for advanced defense systems and long-term procurement programs is accelerating as governments prioritize national security investments across multiple regions.
Commercial aviation adds another layer of opportunity, with global air passenger demand expected to more than double by 2050 at a CAGR of 3.1%, reaching 20.8 trillion Revenue Passenger Kilometers.
Despite strong long-term fundamentals, the industry continues to wrestle with supply-chain disruptions, labor shortages, and component constraints that are delaying aircraft production and fleet modernization.
The U.S. Department of War unveiled President Trump’s proposed fiscal 2027 defense budget in April 2026, seeking a record $1.5 trillion in funding, approximately 42% higher than current levels.
That proposal allocates more than $756.8 billion toward new military capabilities, underlining continued government investment in next-generation defense technologies and the domestic defense industrial base.
The Zacks Aerospace-Defense industry currently carries a Zacks Industry Rank of 105, placing it in the top 43% of more than 246 Zacks industries tracked.
Stocks in the industry have collectively surged 4.5% over the past year, lagging both the Zacks Aerospace sector’s 8.9% gain and the Zacks S&P 500 composite’s 23.2% advance.
On a trailing 12-month EV/Sales basis, the industry is trading at 2.91X, compared with the S&P 500’s 5.87X and the broader sector’s 3.28X, suggesting relative value.
Against that backdrop, three stocks stand out as compelling buys: GE Aerospace (GE), RTX Corporation (RTX), and General Dynamics (GD).
GE Aerospace, headquartered in Evendale, OH, is a leading designer, developer, and producer of jet engines, components, and integrated systems for military, commercial, and business aircraft.
In June 2026, GE Aerospace and Wolfspeed signed a memorandum of understanding to accelerate adoption of high-voltage silicon carbide technology by developing standardized power modules for aerospace, defense, and industrial applications.
The Zacks Consensus Estimate for GE’s 2026 sales calls for an increase of 15.2% year over year, while 2026 EPS is expected to improve 17.4% year over year, with the stock carrying a Zacks Rank of 2 (Buy).
RTX Corporation, based in Waltham, MA, provides advanced systems and services for commercial, military, and government customers across the globe.
In July 2026, RTX’s Raytheon and NATO launched feasibility studies to expand AMRAAM missile production in Europe by qualifying additional regional suppliers and accelerating deliveries to allied forces.
The Zacks Consensus Estimate for RTX’s 2026 sales calls for an increase of 6% year over year, with 2026 EPS expected to rise 9.9% year over year, and the stock holding a Zacks Rank of 2.
General Dynamics (GD), headquartered in Falls Church, VA, operates across mission-critical information systems, land combat vehicles, shipbuilding, and business aviation segments.
At the end of the first quarter of 2026, General Dynamics reported a solid backlog of $130.84 billion, with estimated contract value totaling $188.44 billion when potential contract value is included.
The Zacks Consensus Estimate for GD’s 2026 sales calls for a 4.7% improvement year over year, while 2026 EPS is projected to rise 7.3% year over year, with GD also carrying a Zacks Rank of 2 (Buy).
All three companies offer investors diversified exposure to both defense modernization trends and commercial aerospace growth at a time when government procurement pipelines remain historically deep.
