The aerospace industry is riding a wave of growth as global conflicts across the world have sparked a surge in demand. This has led to swelling backlogs and a flood of orders from every corner of the globe. Meanwhile, recent administration changes in the United States have shaken things up. European countries are ramping up their aerospace orders and are eager to secure advanced technology.
Some nations have hesitated over U.S. orders amid shifting policies, but cancellations seem unlikely since trade wars have simmered down a bit. Beyond geopolitics, the industry is buzzing with other trends. The commercial aviation sector is roaring back with record passenger traffic. This has pushed airlines to modernize fleets with fuel-efficient aircraft.
Moreover, AI software is making defense aircraft more potent, and the entire industry has seen a bump in growth. The following 15 are gaining the most.
A huge in-process machining center producing parts for aircraft and aerospace systems.
Methodology
For this article, I screened the best-performing aerospace stocks year-to-date.
I will also mention the number of hedge fund investors in these stocks. 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).
15. AAR Corp (NYSE:AIR)
Number of Hedge Fund Holders In Q4 2024: 19
AAR Corp (NYSE:AIR) is an aerospace and defense aftermarket solutions company.
The stock is up significantly so far in 2025 as AAR Corp announced the sale of its Miami-based Landing Gear Overhaul business to GA Telesis for $51 million.
The transaction is expected to close in the first quarter of 2025. It is a part of AAR’s strategic portfolio optimization plan. It is anticipated to be immediately accretive to margins and earnings.
AAR Corp reported robust financial performance for the second quarter of fiscal year 2025, with sales reaching $686 million, up 26% year-over-year.
Moreover, AAR signed a multi-year component repair agreement with Cebu Pacific Air to provide nacelle maintenance, repair, and overhaul services for its A320 fleet powered by CFM56-5B engines.
The consensus price target of $81.5 implies 16.85% upside.
AIR stock is up 13.61% year-to-date.
14. Heico Corp (NYSE:HEI)
Number of Hedge Fund Holders In Q4 2024: 67
Heico Corp (NYSE:HEI) is an aerospace, industrial, defense, and electronics company.
The stock is up significantly so far in 2025, as Heico reported record-breaking financial results for Q1 2025. Revenue of $1.03 billion increased 15% year-over-year and exceeded analyst expectations by 5.1%.
Net income surged by 46% to $168 million, and EPS of $1.20 beat forecasts by 27%. Operating income rose by 26%, and EBITDA increased by 22% year-over-year to $273.9 million.
Heico also made some acquisitions that boosted the company’s financials.
The consensus price target of $271.4 implies 0.06% upside.
HEI stock is up 15.88% year-to-date.
13. Woodward Inc (NASDAQ:WWD)
Number of Hedge Fund Holders In Q4 2024: 35
Woodward Inc (NASDAQ:WWD) makes energy control solutions for aerospace and industrial markets.
The stock is up significantly so far in 2025 due to Woodward reporting Q1 FY2025 EPS of $1.35, which exceeded the consensus estimate of $1.14 by $0.21. This beat was driven by growth in its Aerospace segment, which saw a 7% increase in revenue to $494 million.
The Industrial segment also performed well in power generation, oil and gas, and marine transportation markets despite challenges in China. The company reaffirmed its FY2025 guidance with adjusted EPS expected between $5.85 and $6.25.
Plus, Woodward announced a 12% increase in its quarterly dividend from $0.25 to $0.28 per share.
Revenue also grew 14% year-over-year to $3.3 billion.
The consensus price target of $197.38 implies 2.22% upside.
WWD stock is up 16.19% year-to-date.
12. RTX Corp (NYSE:RTX)
Number of Hedge Fund Holders In Q4 2024: 80
RTX Corp (NYSE:RTX) is one of the biggest aerospace and defense companies.
The stock is up significantly so far in 2025 as Raytheon secured a follow-on contract with the U.S. Army Futures Command to enhance its Rapid Campaign Analysis and Demonstration Environment (RCADE).
It also got a $529 million contract to supply Patriot air defense systems to the Netherlands and a $946 million contract for Patriot systems with Romania.
2024 financial performance was solid, with $80.7 billion in sales, up 9% year-over-year, and an adjusted EPS growth of 13%. The company also has a backlog of $218 billion.
The consensus price target of $166.4 implies 22.5% upside.
RTX stock is up 17.82% year-to-date.
11. StandardAero Inc (NYSE:SARO)
Number of Hedge Fund Holders In Q4 2024: 35
StandardAero Inc (NYSE:SARO) is an aerospace engine aftermarket company for fixed and rotary wing aircraft.
The stock is up significantly so far in 2025 as StandardAero announced the pricing of a secondary offering of 36 million shares at $28.00 per share by affiliates of The Carlyle Group and GIC Private Limited. This was an upsized offering.
Moreover, StandardAero reported solid Q4 results with revenue growth of 21.8% year-over-year to $1.41 billion and adjusted EBITDA growth of 37.2%. Despite reporting a net loss due to one-off costs, investors focused on the company’s strong revenue trajectory and guidance for 2025.
StandardAero projects revenue between $5.8 billion and $5.95 billion for the year, which implies 12% growth from 2024.
The consensus price target of $34.89 implies 19.07% upside.
SARO stock is up 18.42% year-to-date.
10. Kratos Defense & Security Solutions Inc (NASDAQ:KTOS)
Number of Hedge Fund Holders In Q4 2024: 21
Kratos Defense & Security Solutions Inc (NASDAQ:KTOS) is a tech company that specializes in advanced defense systems.
The stock is up significantly so far in 2025 as Kratos was added to the S&P SmallCap 600 Index on March 24, 2025. This milestone significantly boosted investor confidence as it validated the company’s investability.
Moreover, Kratos announced a $50 million investment to build a state-of-the-art hypersonic system payload integration facility in Indiana. It also secured an additional $59.3 million contract for its BQM-177A subsonic aerial target systems and bought the contract value to $175 million.
Kratos was awarded a potential $50 million contract for short- and medium-range sub-orbital vehicles supporting missile defense missions. Q4 2024 results also came in solid.
The consensus price target of $32.67 implies 0.89% downside.
KTOS stock is up 24.94% year-to-date.
9. Howmet Aerospace Inc (NYSE:HWM)
Number of Hedge Fund Holders In Q4 2024: 58
Howmet Aerospace Inc (NYSE:HWM) makes aerospace components for engines, fastening systems, and titanium structural parts. It also makes forged aluminum wheels.
The stock is up significantly so far in 2025 as Howmet reported record revenue of $1.9 billion for Q4 2024, up 9% year-over-year. This was mostly driven by a 13% growth in commercial aerospace.
Adjusted EPS rose 40% to $0.74, while adjusted EBITDA increased by 27% to $507 million with a margin of 26.8%.
Moreover, Howmet raised its quarterly dividend by 25% to $0.10 per share and repurchased $50 million in stock in January 2025. This announcement led to an over 8% increase in the stock price in the following days.
Revenue grew by 12% year-over-year to $7.4 billion, with commercial aerospace up 20%. Net income surged 51% to $1.2 billion, and adjusted EPS rose by 46% to $2.69. It also raised its guidance for 2025.
The consensus price target of $123.28 implies 10.43% downside.
HWM stock is up 26.02% year-to-date.
8. GE Aerospace (NYSE:GE)
Number of Hedge Fund Holders In Q4 2024: 101
GE Aerospace (NYSE:GE) makes commercial and military aircraft engines.
The stock is up significantly so far in 2025 due to the company announcing a strong profit outlook for 2025, coupled with plans to increase its share buyback program to $7 billion and raise its dividend by 30%.
The company benefited from high demand for its jet engines and maintenance services due to production delays at Boeing and Airbus, which forced airlines to operate older aircraft requiring more frequent maintenance.
Q4 2024 results also exceeded expectations, with a 44% increase in profit from the commercial engines division and a 19% revenue growth year-over-year.
On top of that, GE Aerospace announced plans to invest nearly $1 billion in its U.S. factories and supply chain in 2025. This was double the previous year’s investment.
The consensus price target of $211.31 implies 0.41% downside.
GE stock is up 27.42% year-to-date.
7. VSE Corp (NASDAQ:VSEC)
Number of Hedge Fund Holders In Q4 2024: 17
VSE Corp (NASDAQ:VSEC) provides aftermarket distribution, maintenance, repair, and overhaul services for aviation and fleet assets.
The stock is up significantly so far in 2025 as it announced an agreement to sell its Fleet business (Wheeler Fleet Solutions) to One Equity Partners for up to $230 million, including $140 million upfront cash, a $25 million seller note, and $65 million in potential earn-outs.
This divestiture streamlines operations to focus on higher-margin aviation services, with proceeds earmarked for debt reduction.
In Q4 2024, the aviation segment revenue surged 45% year-over-year, and 2025 guidance projects 35-40% year-over-year aviation revenue growth, with EBITDA margins at 15.5-16.5%.
The company’s December 2024 acquisition of Kellstrom Aerospace expanded VSE’s commercial aerospace engine aftermarket capabilities and contributed 26% year-over-year total revenue growth in 2024 to $1.08 billion and $52 million in Q4 free cash flow.
The consensus price target of $118.67 implies 5.29% downside.
VSEC stock is up 31.87% year-to-date.
6. Embraer SA (NYSE:ERJ)
Number of Hedge Fund Holders In Q4 2024: 27
Embraer SA (NYSE:ERJ) makes aircraft and systems across commercial aviation, defense and security services.
The stock is up significantly so far in 2025 as Embraer secured its largest-ever executive jet order from Flexjet for up to 182 aircraft, including Praetor and Phenom models. This deal significantly boosted investor confidence.
The order increased Embraer’s backlog by 26% to $29 billion and positioned the company as a leader in the business jet market.
ANA Holdings also ordered 20 E190-E2 aircraft. On top of that, Embraer announced a share buyback program for up to 1,066,667 shares.
The company released optimistic projections for 2025 and expects revenues between $7 billion and $7.5 billion and free cash flow of $200 million or higher.
The consensus price target of $44.5 implies 9.11% downside.
ERJ stock is up 33.29% year-to-date.
5. Triumph Group Inc (NYSE:TGI)
Number of Hedge Fund Holders In Q4 2024: 25
Triumph Group Inc (NYSE:TGI) makes aircraft components and systems for aerospace markets.
The stock is up significantly so far in 2025 due to the company entering a definitive agreement to be acquired by private equity firms Warburg Pincus and Berkshire Partners for $3 billion in an all-cash transaction. Shareholders will receive $26.00 per share.
Net sales grew 11% year-over-year to $315.6 million, and adjusted EPS of $0.27 exceeded consensus estimates by $0.03. Backlog was $1.87 billion.
The consensus price target of $18.78 implies 26.33% downside.
TGI stock is up 36.55% year-to-date.
4. Satellogic Inc (NASDAQ:SATL)
Number of Hedge Fund Holders In Q4 2024: 7
Satellogic Inc (NASDAQ:SATL) is a vertically integrated geospatial company that provides high-resolution Earth observation data.
The stock is up significantly so far in 2025 due to it securing a multi-year contract under NASA’s $476 million Commercial SmallSat Data Acquisition Program to supply high-resolution multispectral imagery until 2028. It landed the contract late last year, but it still drives optimism.
It signed an exclusive agreement granting Maxar access to Satellogic’s satellite constellation for U.S. national security missions, completed a $10 million private placement in December 2024, and established a $50 million at-the-market equity program to fund U.S. market expansion.
It tripled satellite monitoring of North American oil and gas wellheads to over 100 sites.
SATL stock is up 37.19% year-to-date.
3. EHang Holdings Ltd (NASDAQ:EH)
Number of Hedge Fund Holders In Q4 2024: 11
EHang Holdings Ltd (NASDAQ:EH) is a leading Urban Air Mobility technology platform company. It specializes in autonomous aerial vehicles for passenger transportation.
The stock is up significantly so far in 2025 due to the company’s Q4 2024 revenue growing 190.2% year-over-year to $22.5 million and beating guidance by 20%.
Fiscal 2024 revenue also grew 288.5% year-over-year to $62.86 million. The company delivered 2216 eVTOL units and achieved its first annual non-GAAP profitability.
The consensus price target of $24.75 implies 11.09% upside.
EH stock is up 41.51% year-to-date.
2. Elbit Systems Ltd (NASDAQ:ESLT)
Number of Hedge Fund Holders In Q4 2024: 15
Elbit Systems Ltd (NASDAQ:ESLT) is a defense tech company that supplies military systems.
The stock is up significantly so far in 2025 as it reported Q4 revenue of $1.93 billion, up 19%. Net income grew 71% to $119 million.
It also had its fourth consecutive quarter of double-digit revenue growth. These results exceeded analyst expectations of $1.75 billion in revenue and $1.85 per share earnings.
This strong performance was attributed to a backlog of $22.1 billion.
ESLT stock is up 56.94% year-to-date.
1. Astronics Corp (NASDAQ:ATRO)
Number of Hedge Fund Holders In Q4 2024: 32
Astronics Corp (NASDAQ:ATRO) is an aerospace company that specializes in power, connectivity, lighting, and test systems.
The stock is up significantly so far in 2025 due to solid Q4 2024 results. Sales increased 6.8% to $208.5 million, and full-year sales increased 15.4% to $795.4 million.
The Aerospace segment achieved record Q4 sales of $188.5 million due to demand for cabin power and inflight entertainment. Backlog is also strong at $599.2 million, along with a projection of 2025 revenue between $820 million and $860 million.
Astronics expects a ramp-up in sales later this year due to potential increases in Boeing production rates and strong demand for its cabin power and inflight entertainment products.
The consensus price target of $23 implies 13.21% downside.
ATRO stock is up 66.04% year-to-date.
While we acknowledge the potential of ATRO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ATRO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.