Is Amentum Stock a High-Conviction Buy for 2026?

In the ever-evolving landscape of industrial and defense contracting, Amentum Holdings, Inc. (AMTM) has emerged as a compelling case study for investors seeking exposure to long-term growth drivers. As 2026 approaches, the question of whether Amentum stock warrants a high-conviction buy hinges on three pillars: institutional buying trends, robust financial fundamentals, and alignment with global industry megatrends.

Institutional Buying Trends: A Mixed but Encouraging Signal

Institutional ownership of Amentum remains a critical barometer of investor sentiment. As of November 2025, institutional ownership stood at 82.49%, with 287 institutional buyers recorded over the past 12 months. This figure underscores sustained interest from large-scale investors, though the composition of these holdings reveals a nuanced picture.

BlackRock, Inc. and Vanguard Group Inc., two of the largest institutional investors, increased their stakes by 88.16% and 18.05%, respectively, in the fourth quarter of 2025. Invesco Ltd. maintained the largest single position with 17.19 million shares, while Verition Fund Management LLC executed a staggering 1,128.0% increase in its holdings. These aggressive moves suggest confidence in Amentum's strategic direction and operational resilience.

However, not all institutional activity has been bullish. JACOBS SOLUTIONS INC. entirely exited its position, reducing its shares from 18.25 million to zero, and Millennium Management LLC saw an 86.3% decline in holdings. Such divergent actions highlight the inherent risks in a sector sensitive to geopolitical and regulatory shifts. Yet, the overall institutional ownership percentage-39.93% as of August 2025-remains stable, indicating a net positive outlook despite short-term volatility.

Fundamentals: A Foundation of Strength

Amentum's financial performance in 2025 provides a solid foundation for optimism. The company reported pro forma annual revenues of $14.4 billion and adjusted EBITDA of $1.1 billion, with a net leverage ratio of 3.2x and free cash flow of $516 million. These metrics reflect disciplined capital management and operational efficiency, critical traits in a capital-intensive industry.

Looking ahead, Amentum's fiscal 2026 guidance projects up to $14.3 billion in revenue and $575 million in free cash flow, signaling continued momentum. The company's $47.1 billion backlog further reinforces this trajectory, offering long-term visibility and reducing exposure to near-term market fluctuations.

Amentum's recent $4 billion 10-year contract with the U.S. Space Force and its pivotal role in NASA's Artemis II mission also demonstrate its ability to secure high-margin, mission-critical contracts. These wins not only diversify revenue streams but also position Amentum at the forefront of the space technology boom, a sector expected to grow exponentially in the coming decade.

Long-Term Growth Drivers: Strategic Alignment with Global Trends

Amentum's business model is deeply intertwined with three enduring megatrends: defense modernization, energy transition, and digital infrastructure. The company's expertise in nuclear energy development, critical digital systems, and space technology places it at the intersection of these trends.

The global push for clean energy, particularly nuclear power, presents a significant opportunity. Amentum's experience in managing complex energy projects aligns with the U.S. and international commitments to decarbonization. Similarly, the digitization of defense systems and the rise of cyber threats have amplified demand for Amentum's advanced engineering and IT services.

The space sector, in particular, is a standout. Amentum's involvement in Artemis II and its support for the U.S. Space Force underscore its role in a $1 trillion global space economy by 2040. With governments and private entities accelerating investments in space exploration, Amentum's technical capabilities and regulatory expertise give it a competitive edge.

Conclusion: A High-Conviction Buy for 2026

While institutional activity has shown some divergence, the overwhelming majority of large investors remain bullish on Amentum's prospects. The company's financial discipline, strategic contract wins, and alignment with high-growth sectors create a compelling case for long-term investment.

For investors with a 2026 horizon, Amentum represents a rare combination of defensive qualities and offensive growth potential. Its backlog, recurring revenue streams, and involvement in mission-critical projects provide downside protection, while its exposure to defense, energy, and space offers substantial upside. In a market increasingly defined by volatility and uncertainty, Amentum's stock emerges as a high-conviction buy for those seeking to capitalize on the next decade of industrial innovation.