Over the past year, defense stocks have benefited from increased outlays on weapons by the United States and its allies due to the Ukraine war. Still, companies have struggled with supply snags, higher costs, and labor shortages.
Nevertheless, Russia’s aggression has created lucrative opportunities for the defense sector, driving the demand for weapons being transferred from the United States to Ukraine. This is expected to boost revenues for the companies within the industry.
The global aerospace and defense market size is expected to expand at a CAGR of 5.9%, reaching $1.05 trillion by 2028. According to Statista, defense outlays are predicted to increase up to $998 billion in 2032.
Moreover, the National Defense Authorization Act has authorized $858 billion in total defense spending and contains several provisions that will interest companies that do business with the U.S. government. In addition, the act includes substantial investments related to aircraft technology, electronic warfare, 5G technology development, and artificial intelligence programs.
Given this backdrop, investors could consider investing in Raytheon Technologies Corporation (RTX), Lockheed Martin Corporation (LMT), and…
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