10 Best Mid Cap Defense Stocks to Buy According to Analysts

1. CAE Inc. (NYSE:CAE)

Market Cap: $7.27 billion

Share Price Upside Potential: 40.85%

CAE Inc. (NYSE:CAE) is a technology company specializing in simulation training and critical operations support solutions. It operates in two segments: Civil Aviation and Defense and Security.

On February 13, the company reported impressive results for the third quarter of fiscal 2025, with consolidated revenue growing 12% year-over-year to $1.22 billion. Adjusted segment operating income was posted at $190 million, up 31% from the prior year. Adjusted EPS was logged at $0.29, compared to $0.24 per share for Q3 2024. The company’s backlog stood at $20.3 billion, which included $2.2 billion in new orders.

The strong financial results have bolstered investor sentiment around the stock. ClearBridge Mid Cap Strategy stated the following regarding CAE Inc. (NYSE:CAE) in its Q4 2024 investor letter:

“We also benefited from our strong stock selection in the industrials sector. CAE Inc. (NYSE:CAE), which provides simulation training and critical operations support to both civil and defense aviation customers, reported solid quarterly earnings stemming from its defense business. In addition to the company’s strong market share and customer demand in civil flight simulation, its strong growth in its defense business and active approach to improving its balance sheet should be long-term growth catalyst.”

Late last month, CAE Inc. (NYSE:CAE) was awarded two notable contracts. First, it clinched an agreement to provide management, engineering, and maintenance services to support the C-130J Weapon Systems Trainer for the Royal New Zealand Air Force. Second, it won a $180 million contract to support the US Army under the Advanced Helicopter Flight Training Support (AHFTS) program.

Overall, CAE ranks first among the 10 Best Mid Cap Defense Stocks to Buy According to Analysts. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CAE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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