Rare Earth Supply Could Lift These U.S. Defense Stocks

Rare earths used in everything from fighter jets to electric motors have moved from obscure chemistry topic to front-page supply story, and that shift now has real money attached to it. With Phoenix Tailings planning a US$375 million processing plant in New York, investors face a fresh set of winners and laggards tied to secure materials. This article breaks down three stocks that appear especially exposed to that news and explains how the changing rare earth supply picture could influence their long term potential and risk.

The three stocks below are a starter set only. The full screen surfaced 19 more U.S. defense and advanced manufacturing companies with similarly strong rare-earth-linked stories that are not covered in this article.

Head straight into the U.S. Defense & Advanced Manufacturing Benefiting from Secure Rare Earth Supply screener to identify, compare, and analyze the highest-conviction ideas from this broader group.

Allient (ALNT)

Overview: Allient designs and supplies precision motion systems, motors and controls that power rare-earth-magnet-heavy equipment for industrial, medical, aerospace and defense customers worldwide.

Operations: Allient generates about US$574.8 million from controlled motion products, with roughly US$381.6 million in North America and US$168.8 million in Europe.

Market Cap: US$1.6b

Allient operates at the intersection of rare earth magnets and real-world hardware, turning secure material supply into motion systems that keep defense and industrial customers running.

Expectations for continued acceleration in industrial automation, robotics and data center infrastructure now rest on Allient’s record Q2 2026 bookings of US$201.3 million and US$298 million backlog that is largely scheduled to ship over the next 3 to 9 months, which could support revenue and earnings if this order flow converts as planned.

What happens to Allient’s margins if a single unseen pressure on its magnet-heavy projects shifts just a little off the current path?

That quiet pressure point is exactly where the opportunity sits, and the full narrative for Allient shows how Allient could turn rare earth risk into accelerating advantage.

Ducommun (DCO)

Overview: Ducommun supplies complex electronic and structural components for missiles, radar, aircraft and space systems across aerospace, defense, industrial and medical markets.

Operations: Ducommun generates about US$492.9 million from Electronic Systems and roughly US$372.1 million from Structural Systems, highlighting a balanced engineered hardware portfolio.

Market Cap: US$2.6b

Ducommun matters for this rare-earth-linked screen because its cables, enclosures, motors and aerostructures plug directly into missile and radar programs that depend on reliable access to high performance materials.

Elevated global defense spending and the replenishment of missile and radar inventories, with Ducommun reporting its missile business up 68% year-on-year in Q2 2026 and missiles, radar and electronic warfare now over 20% of total revenue, points to ongoing program ramps that can support higher defense revenue and earnings over the next several years.

What happens to Ducommun’s margin ambitions if a single assumption about the durability of this high spec defense demand quietly shifts course?

If that assumption matters to your thesis, the full narrative for Ducommun explains how Ducommun could address rare earth supply risk and potentially strengthen its programs.

Woodward (WWD)

Overview: Woodward provides control solutions and aftermarket services for aerospace and industrial equipment, including aircraft engines, flight controls, actuators, motors and sensors.

Operations: Woodward generates about US$2.7b from Aerospace and roughly US$1.5b from Industrial products and services worldwide.

Market Cap: US$19.4b

Woodward matters for this rare-earth-focused screen because its actuators, motors and sensors sit deep inside aircraft and defense systems that rely on high reliability magnet technology.

Woodward's content on LEAP and GTF engines, together with aftermarket services where repair and spare LRU revenue is already comparable to legacy narrow body levels and repair volumes are expected to cross over between late fiscal 2026 and 2027, points to further growth in commercial aerospace revenue and earnings as newer fleets mature into heavier service cycles.

The open question is how far Woodward can translate that heavier service mix into higher, more durable margins if one key cost assumption shifts.

If that cost line is the swing factor you care about, the full narrative for Woodward explains how Woodward could turn heavier service workloads into greater flexibility in generating free cash flow.

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