AeroVironment Stock And 2 Defense Names Backed By Long Term Military Spending

With inflation trends mixed across regions, central banks adjusting policy carefully, and energy prices still feeding into broader costs, many investors are looking for sectors tied to long-term government and infrastructure spending rather than short-term economic swings. Aerospace and defense stocks fit that theme by focusing on companies that manufacture or provide services to these critical industries, where demand is often linked to multi‑year contracts and public budgets. This article highlights 3 stocks from the Aerospace And Defense screener that can help you explore this theme and decide which opportunities deserve a closer look.

AeroVironment (AVAV)

Overview: AeroVironment is a defense technology company that builds uncrewed aircraft, loitering munitions, and robotic systems, along with space, cyber, and directed energy solutions used by the U.S. military, allies, and commercial customers.

Operations: AeroVironment generates about US$1.36b from its Autonomous Systems segment and US$618.8m from Space, Cyber and Directed Energy, with roughly US$1.42b of revenue from the United States and US$556.4m from international customers.

Market Cap: US$7.3b

AeroVironment provides exposure to uncrewed systems, counter drone defenses, and space communications at a time when governments are committing to long term defense modernization. The company reports a US$2.7b backlog and a pipeline that management says could reach US$35b through 2030. It remains loss making and heavily reliant on U.S. defense contracts, and margins have come under pressure after the BlueHalo acquisition. Legal issues around the SCAR program also remain a watchpoint. Analysts have highlighted the potential impact of higher value platforms such as Titan and AV Halo, and recent contract wins in Germany and with the U.S. Army indicate that its technology is being adopted in multiple geographies.

AeroVironment’s growing backlog and pipeline hint at a much bigger story than current earnings alone suggest, but the real turning points may sit inside the 2 key rewards and 1 important warning sign.

Moog (MOG.A)

Overview: Moog is a diversified aerospace, defense, and industrial company that supplies high precision motion and fluid control systems for aircraft, spacecraft, defense platforms, and industrial automation, with its technology embedded in many mission critical applications.

Operations: Moog generates about US$1.23b from Space and Defense, US$1.01b from Industrial, US$984.7m from Commercial Aircraft, and US$943.8m from Military Aircraft.

Market Cap: US$12.9b

Moog stands out in aerospace and defense because it mixes critical defense and space exposure with growing industrial automation and medical businesses, which can support a more balanced revenue base over time. Recent quarters featured record results and earnings growth that outpaced both the Aerospace and Defense sector and the wider market, supported by a thick order book and rising aftermarket services. At the same time, tariffs, high debt and working capital needs keep cash conversion in focus. Analysts have pointed to solid earnings expansion and higher returns on equity, while also noting that the current share price already reflects ambitious expectations. The key consideration for investors is whether this growth narrative and risk profile align with their own assumptions about Moog’s future.

Moog’s accelerating earnings story, thick order book, and mix of aerospace, defense, and industrial exposure hint at more beneath the surface. The real swing factors sit inside the analyst forecasts for Moog

Thales (ENXTPA:HO)

Overview: Thales is a diversified French group that supplies defence systems, avionics, space technologies, and digital identity and security solutions such as cybersecurity, biometrics, and secure payments to governments and enterprises worldwide.

Operations: Thales generates about €12.59b from Defence excluding Digital Identity and Security, €6.09b from Aerospace, and €3.98b from Cyber & Digital, with smaller contributions and eliminations in Other.

Market Cap: €45.9b

Thales provides exposure to defence and cybersecurity spending, with earnings growth that has outpaced the wider Aerospace & Defense industry and a Cyber & Digital unit tied to high margin, recurring services. The stock is trading below one estimate of fair value and analysts see further upside. At the same time, the business is wrestling with digital integration issues, a cyclical Space division, and a balance sheet funded entirely by external borrowings. Recent wins in tactical communications, sonar and identity platforms, together with a multi year defence upcycle in Europe, indicate that the story is still developing. However, the full picture of potential opportunity and execution risk calls for a closer look at how these moving parts fit together over time.

Thales appears to be a defence and cybersecurity heavyweight, yet its share price story may not fully reflect its Cyber & Digital engine and funding structure. Get the full context inside the analysis report for Thales

The three aerospace and defense stocks in this article are just a starting point. The full Aerospace And Defense screener surfaces 297 more companies with equally compelling stories and data to unpack. Use Simply Wall St to identify, analyze, and filter for the specific catalysts and narratives that matter to you so you can focus on the highest conviction opportunities in this theme.

Take Control of Your Investment Journey

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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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