AeroVironment And 2 Defense Stocks To Improve Your Portfolio

The U.S. decision to reopen a Cold War era military base in Greenland underlines how governments are still investing heavily in security and long range power projection. That kind of spending tends to ripple through everything from aircraft to surveillance systems. For investors, this highlights a focused way to gain exposure to sustained defense budgets. This article breaks down three stocks from the U.S. aerospace and defense supply chain that may warrant a closer look.

The stocks covered below are just a small sample of what is happening across aerospace and defense, and a broader screen surfaced 73 more companies with equally compelling stories that are not unpacked here. To go deeper, head straight into the Aerospace And Defense screener to identify, filter, and analyze the highest conviction ideas in this theme.

AeroVironment (AVAV)

Overview: AeroVironment is a defense-technology company focused on uncrewed aircraft systems, counter-drone and precision strike solutions, with additional space, cyber and directed-energy products.

Operations: The business generates about US$1.4b from Autonomous Systems and US$584 million from Space, Cyber and Directed Energy, with roughly US$1.4b from the United States and US$556 million from international customers.

Market Cap: US$7.9b

AeroVironment matters for the Aerospace And Defense theme because its drones and counter-drone systems plug directly into how militaries now monitor, protect, and strike over long distances.

"A $465 million EHEL award that Nawabi now describes as “the first ever production contract for direct energy systems in U.S. military history.”

What happens to AeroVironment’s long-term earnings power depends heavily on how one unseen pressure shapes the profitability of these flagship programs.

That pressure is the real story. Read the full narrative for AeroVironment to see how AeroVironment’s contract profile, margins and capital needs could be quietly decoupling.

Rocket Lab (RKLB)

Overview: Rocket Lab designs, manufactures, and launches small and medium-class rockets and spacecraft systems that serve commercial, aerospace, and defense customers.

Operations: The business generates about US$544 million from Space Systems and around US$225 million from Launch Services, reflecting a space hardware heavy model.

Market Cap: US$41.8b

Rocket Lab matters for the Aerospace And Defense theme because its Electron launches, Neutron development, and space systems work directly support military and government space missions.

"Neutron's successful operation should be that turning point, but Neutron's failure would risk the entire company."

What happens to Rocket Lab’s long term margins and cash generation depends on how one still unproven piece of its launch roadmap performs.

That hinge point around Neutron is exactly what the full narrative for Rocket Lab unpacks, including how Rocket Lab’s wider space hardware engine could absorb setbacks and accelerate the upside story.

Lockheed Martin (LMT)

Overview: Lockheed Martin builds military aircraft like the F-35, along with missiles, mission systems, and space hardware for governments worldwide.

Operations: Lockheed Martin generates about US$31.2b from Aeronautics, US$19.8b from Rotary and Mission Systems, US$16.4b from Missiles and Fire Control, and US$13.8b from Space. Approximately US$54b comes from the United States, and about US$23b comes from international customers.

Market Cap: US$123.6b

Lockheed Martin matters for this Aerospace And Defense screen because its fighter jets, missile systems, and space programs sit directly on top of how modern militaries project airpower and protect allies. The next phase of execution will show how much of that demand actually turns into stronger profitability.

"2026 is the “prove it” year: guidance points to better margins and mid-single-digit sales growth."

What happens to Lockheed Martin’s appeal now hinges on whether one pressure inside its aero and missiles ramp deepens or finally eases.

If that pressure point matters to you, read the full narrative for Lockheed Martin to see whether aero and missiles ramps are quietly masking or accelerating Lockheed Martin’s next phase.

Seeking Fresh Alternatives Before They Fly

Strong ideas rarely stay under the radar for long. While momentum builds and entry points narrow, fresh watchlists can slip away before the crowd notices. Consider building your list early.

• Track cash rich businesses that still look overlooked by filtering for a curated 29 high quality undervalued stocks before pricing fully reflects their balance sheet strength.
• Spot compact, high potential companies with real earnings power by running through a focused set of 38 profitable AI stocks that aren't just burning cash while the story is still forming.
• Zero in on operators with staying power using the curated list of solid balance sheet and fundamentals (23 results) before broader attention catches what their fundamentals are already signaling.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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