Aerospace and Defense Industry Sees Record Profitability with Upside Momentum Expected to Continue

The aerospace and defense industry is experiencing record profitability, leading to blistering upside momentum. Companies in this sector continue to display substantial earnings growth power, making it a good time to initiate or hold stakes in investment vehicles such as the iShares Aerospace & Defense ETF.

The aerospace and defense industry is experiencing a period of unprecedented profitability, fueling a blistering upside momentum for investment vehicles such as the iShares U.S. Aerospace & Defense ETF (ITA). Companies within this sector are displaying substantial earnings growth power, making it an opportune time for investors to initiate or hold stakes in the ETF.

The iShares U.S. Aerospace & Defense ETF (ITA) has seen its price appreciate by 35% year-to-date and 41% over the past twelve months [4]. This robust performance is underpinned by the strong financial results and elevated full-year forecasts from major aerospace and defense companies. For instance, GE Aerospace reported a 24% year-over-year revenue growth in the June quarter, with its financial performance driven by a 30% increase in its commercial engines and services segment [4]. Similarly, RTX Corporation (RTX), a significant holding in the ETF, reported second-quarter adjusted revenue growth of 9%, with its segment operating profit and earnings per share growing by 12% and 11% respectively [4].

The aerospace and defense sector's growth is supported by the robust demand from both segments. Companies like Boeing (BA) have seen their commercial aerospace segment report massive year-over-year revenue growth of 89% in the first quarter of 2025 [4]. The global commercial aircraft order backlog hit a new high in May, surpassing 16,000 aircraft [4].

The iShares U.S. Aerospace & Defense ETF (ITA) received a buy rating with a high quant score of 4.41, further vindicating the sector's strong fundamentals [4]. The ETF's top holdings, which make up 71% of its entire portfolio, include companies such as General Dynamics (GD), TransDigm Group (TDG), and Howmet Aerospace (HWM), all of which have reported impressive financial performance and growth [4].

The aerospace and defense industry's growth is also reflected in the broader market, with the iShares U.S. Aerospace & Defense ETF (ITA) experiencing significant share price gains from its top holdings. For example, General Dynamics Corp. reported year-over-year revenue growth of 8.9% in the second quarter of 2025, with its earnings per share jumping 14% [4]. The company's backlog surged to a record $103.7 billion, with new orders accounting for $28.3 billion [4].

The record profitability and growth in the aerospace and defense sector are likely to continue, supported by the robust demand for commercial aircraft and other services, as well as geopolitical tensions and record defense spending from major countries. This makes it a good time to initiate or hold stakes in investment vehicles such as the iShares U.S. Aerospace & Defense ETF (ITA).

References:
[1] https://www.marketscreener.com/news/cts-2025-second-quarter-earnings-presentation-ce7c5cd3d189f622
[2] https://finance.yahoo.com/quote/ITA/
[3] https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/godrej-enterprises-groups-aerospace-business-inks-pact-with-pratt-whitney/articleshow/122876274.cms
[4] https://seekingalpha.com/article/4804129-ita-record-profitability-is-likely-to-extend-a-blistering-upside-momentum