10 Best American Defense Stocks To Buy According to Hedge Funds

1. GE Aerospace (NYSE:GE)

Number of Hedge Fund Holders: 86

GE Aerospace (NYSE:GE) is a leading American defense stock, recognized for its pivotal role in aerospace, particularly in the development and production of military aircraft engines. Its Aviation segment plays a critical role, providing essential propulsion technology to defense contractors and military forces worldwide.

GE Aerospace (NYSE:GE) has been showing strong quarterly performance, prompting UBS to maintain a positive outlook and raise its price target to $230. The company’s steady revenue growth, expanding margins, and strong cash flow generation for Q3 have been notable, even with ongoing supply chain challenges. The company’s revenue and EBIT for the quarter met consensus expectations, boosting UBS’s confidence and leading to increased EBIT projections for 2027 and 2028. Though there are concerns about a potential reversal of mix benefits in 2025, the firm expects only a modest impact on the company’s financials. The anticipated reduction of 700-800 LEAP engine deliveries this year is also projected to contribute roughly a $0.10, or 2%, boost to 2024 earnings per share EPS.

Additionally, despite profit declines in the Defense & Propulsion Technologies segment and a 4% dip in total engine deliveries due to supply chain issues, the company remains optimistic, with the Commercial Engines & Services segment seeing a 29% jump in orders and a 10% rise in services revenue. Additionally, GE Aerospace (NYSE:GE) is investing $1 billion in MRO to boost aftermarket capacity, including the launch of a new LEAP MRO facility in Poland.

While we acknowledge the potential of GE, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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