In this article, we will look at the 12 Best Aerospace and Defense Stocks to Buy According to Analysts.
Defense Spending Uncertainty
On February 13, CNBC reported that President Trump’s statement regarding a potential reduction in US defense spending triggered a drop in defense stocks. During a White House event, the President proposed cutting the defense budget in half, stating that there is no need for the United States to spend nearly $1 trillion on the military. He mentioned plans to discuss this idea with China and Russia in future meetings. This sent mixed signals regarding military spending. On the one hand, he has emphasized the need for a strong military and proposed initiatives like the “Iron Dome of America,” a missile defense system. On the other hand, he also suggested significant cuts to defense spending, aligning with broader efforts to reduce government expenditures.
To discuss this, TD Cowen’s Roman Schweizer joined CNBC for an interview on February 14. He noted that setting aside all the mixed signals and uncertainty around the sector, the government would increase defense spending. This will be a result of the reconciliation plan of the Senate and House, however, the magnitude of this increase is still unclear. Schweizer also noted that some members of both the House and Senate are pushing President Trump to increase defense spending to 4% or 5% of GDP. Moreover, US Secretary of Defense, Pete Hegseth, reiterated that US defense should be pegged at 3% of GDP. Schweizer highlighted that this forms an interesting baseline for a potential $40 billion to $60 billion increase in spending over the upcoming years.
Regardless of the uncertainty in the White House regarding increasing or decreasing defense spending, the industry has been redefining itself with the help of technology and AI. On February 21, Morgan Stanley released a report highlighting megatrends for the industry. The report highlights that innovations in unmanned drones, robotics, autonomy, and artificial intelligence are not only modernizing military operations but also influencing how nations allocate and grow their defense budgets. In 2023, global military expenditures reached a record high of $2.4 trillion, marking a 6.8% increase from the previous year, the steepest annual growth since 2009.
Morgan Stanley’s Global Investment Office views this resurgence in defense spending and technological innovation as an opportunity to enhance productivity and stimulate economic growth. They highlighted that the integration of new technologies can create investment opportunities not only in defense contractors but also in related sectors such as supply chains, transportation, manufacturing, energy, and cybersecurity.
With that let’s take a look at the 12 best aerospace and defense stocks to buy according to analysts.
A shot of a prototype aircraft taking to the skies, the symbol of the companies innovation in aerospace & defense.
Our Methodology
To curate the list of 12 best aerospace and defense stocks to buy according to analysts we used the Finviz stock screener and CNN as our sources. Using the screener we aggregated a list of aerospace and defense stocks for which analysts see more than 30% upside in the next 12 months. After sorting the list by market capitalization, we cross checked the analyst upside from CNN and ranked the stocks in ascending order of this indicator. We have also added the hedge fund sentiment around each stock sourced from Insider Monkey’s Q4 2024 database. Please note that the data was recorded on March 27, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Best Aerospace and Defense Stocks to Buy According to Analysts
12. Moog Inc. (NYSE:MOG-A)
Number of Hedge Fund Holders: 25
Analyst Upside Potential: 31.04%
Moog Inc. (NYSE:MOG-A) is an international company specializing in the design, manufacturing, and integration of precision control components and systems. It operates across four main segments including Space and Defense, Military aircraft, Commercial aircraft, and Industrial Applications.
During the fiscal first quarter of 2025, Moog Inc. (NYSE:MOG-A) reported strong financial results driven by growth in aerospace and defense businesses. Its net sales grew by 6% year-over-year to $910 million, fueled by an 8% rise in Space and Defense sales and a 15% increase in Military Aircraft sales. More notably, bookings reached a record $1.3 billion, driven by strong orders in Space and Defense as well as Commercial Aircraft.
Moreover, in January 2025, Moog Inc. (NYSE:MOG-A) announced securing a significant contract with Lockheed Martin to provide custom electromechanical actuators for the Patriot Advanced Capability-3 Missile Segment Enhancement program. This contract is valued at over $100 million and represents one of the largest awards in the history of the company’s Defense Division. Moog Inc. (NYSE:MOG-A) is one of the best aerospace and defense stocks to buy according to analysts.
11. BWX Technologies, Inc. (NYSE:BWXT)
Number of Hedge Fund Holders: 55
Analyst Upside Potential: 31.91%
BWX Technologies, Inc. (NYSE:BWXT) is a specialty manufacturer and service provider in the nuclear industry. It operates within two main areas, Government Operations and Commercial Operations. Under the Government Operations, the company focuses on manufacturing naval nuclear reactors and related nuclear fuel for the US Naval Nuclear Propulsion Program used in submarines and aircraft carriers. Whereas, within the Commercial operations it engages in designing and manufacturing commercial nuclear steam generators, heat exchangers, pressure vessels, reactor components, and auxiliary equipment.
In the fiscal fourth quarter of 2024, BWX Technologies, Inc. (NYSE:BWXT) achieved record revenue of $746.3 million, growing 2.9% year-over-year. The net income stood at $71.1 million, after improving from $66.3 million in the prior year. Moreover, the company ended 2024 with a backlog of $4.8 billion, up 21% year-over-year, driven by large contract awards across both government and commercial segments.
The management noted that the company completed the expansion of its Innovation Campus in Lynchburg, Virginia, enhancing capabilities for designing and manufacturing microreactors and advanced nuclear fuels for defense and commercial applications. Moreover, BWX Technologies, Inc. (NYSE:BWXT) also made strategic investments in naval nuclear propulsion manufacturing plants to continue to meet the increasing demand for Virginia-class reactor cores and Columbia-class submarine production. It is one of the best aerospace and defense stocks to buy according to analysts.
