Aerospace and defense sector sees growth from rising procurement

The aerospace and defense sector is seeing significant activity driven by rising defense procurement requests and increased demand for munitions and advanced systems. For fiscal year 2027, munitions requests have reportedly increased by 185%, with missile orders exceeding historical averages.

Major industry players, including Lockheed Martin, RTX, and General Dynamics, are reporting record backlogs and strong book-to-bill ratios, providing multi-year revenue visibility. This growth is supported by both traditional hardware and emerging space and data-centric technologies.

Investors are utilizing various exchange-traded funds (ETFs) to gain exposure to the sector. The Invesco Aerospace & Defense ETF (PPA) offers broad industrial exposure with significant holdings in companies like RTX and Boeing. In contrast, the Global X Defense Tech ETF (SHLD) focuses on a lower-cost, technology-driven approach. Additionally, the First Trust Indxx Aerospace & Defense ETF (MISL) provides diversified exposure to surging U.S. defense spending.