Aerospace & Defense Stocks Soar Amid Record Military Spending

Global military expenditures reached a historic $2.7 trillion in 2023, propelling aerospace and defense stocks to outperform broader markets. The iShares U.S. Aerospace & Defense ETF (ITA) has surged 42% year-to-date, nearly tripling the S&P 500's gains.

Lockheed Martin secured pricing certainty for 300 F-35 jets through Lots 18-19, with deliveries commencing in 2026. General Dynamics benefits from dual tailwinds—a Gulfstream business jet recovery and submarine contract backlog. Boeing shows early signs of operational stabilization as narrow-body aircraft demand rebounds.

NATO's push for increased defense budgets across member states creates multi-year visibility for sector leaders. Market differentiation has become pronounced, with investors rewarding companies demonstrating contract visibility and execution capability.