To the Moon and Beyond: How to Invest in the Aerospace Sector

April 24, 2025 TruthUSA

The aerospace and defense sector is driven by innovation and benefits from long-term government contracts.

They say space is the final frontier. And even though America’s first space shuttle launched in the 1950s, leading aerospace companies today are still piercing deeper into the cosmos and stand at the forefront of cutting-edge technology that could seem out of this world. Many of these companies also have a reliable stream of revenue coming directly from the pocket of the Department of Defense.

In fact, the U.S. Space Force’s top-secret plane made by Boeing recently made its safe return to Earth after spending more than 400 days in orbit, where officials said it had “broken new ground.”

So it’s an exciting time for the aerospace sector. But it’s important to understand what you’ll be getting yourself into before you launch your investing dollars into this industry.

Why Invest in the Aerospace Sector?

The aerospace sector is closely tied to the defense sector. In fact, analysts view it as a unit called the aerospace and defense sector (A&D).

The A&D sector is projected to reach $105.52 billion by 2030, growing at a compound annual growth rate of 5.88 percent, according to an analysis by OurCrowd, a platform for private investments.

Today, the aerospace and defense industry supplies the following five markets: military aircraft, missiles, space, commercial airlines, and general aviation.

Military aircraft accounts for the largest market share, followed by space systems. This is telling because of ongoing conflicts that have recently sparked around the world such as the Ukraine–Russia war and the Israel–Hamas conflict in the Middle East. These and other battles have triggered an increase in defense spending by governments around the globe. And perhaps the biggest customer of the leading aerospace and defense companies in the United States is Uncle Sam. Many are engaged in long-term contracts with the Department of Defense. This could provide a steady, reliable, and hefty stream of income for these companies.

It’s also important to note that the government allocates a portion of its budget to defense. This fuels government spending regardless of where we are in the economic cycle. And it’s one of the reasons why aerospace and defense companies tend to remain stable even in times of economic uncertainty, such as during recessions.

In addition, A&D companies are among the most innovative in the world. They essentially are in the business of inventing new technology. Think unmanned aircraft for everything from military operations to commercial flight. How about virtual and augmented reality being used for training simulations? Or making a family trip into outer space as common as going to Disneyland? The A&D sector has its foot in all of this.

But remember: the aerospace sector isn’t just about technology that leaves this Earth. Air travel has been going through a resurgence with global economic growth and a rise in middle-class populations across the world. This heightens demand for commercial aircraft and aerospace products.

In addition, investing in the aerospace sector can give your portfolio a new layer of diversification. The industry behaves in ways that may not be correlated to other areas of the market. This can provide downside protection.

So if you’re interested, there are many ways to invest in the aerospace sector.

Aerospace Stocks

One of the most popular ways to invest in the aerospace and defense sector is by purchasing shares of the private stocks of companies such as SpaceX. You can access these through platforms such as Nasdaq Private Market and OurCrowd. However, private stocks are typically limited to high-net-worth accredited investors.

Still, you can invest in some of the biggest publicly traded companies in aerospace. Here are some top picks:

Rocket Lab USA Inc.: This space company develops rocket launch and control systems. It also makes spacecrafts and satellite components. It stands out for its Electron launch vehicle. This small orbital rocket launches small satellites into space. Its stock has a one-year return of more than 490 percent.

Vertical Aerospace Ltd: This global aerospace company develops electric vertical take-off and landing (eVTOL) aircraft. Its mission is to revolutionize air travel through electric and eco-friendly aviation. The company is known for its X4 aircraft, which releases zero operating emissions. Its stock has a one-year return of more than 390 percent.

Redwire Corp.: This space company develops payloads for the International Space Station (ISS) and provides engineering for commercial space stations. The company stands out for solar power generation and in-space 3D printing. Its stock has a one-year return of more than 189 percent.

Elbit Systems Ltd.: This company develops airborne, naval, and land systems for defense. Its portfolio includes unmanned aerial vehicles (UAVs), electro-optics, and electronic warfare systems. Its stock has generated a one-year return of more than 102 percent.

Aerospace ETFs

If you don’t want to individually pick stocks in the aerospace and defense sector, you can purchase exchange-traded funds (ETFs) that aim to mimic the performance of the industry as a whole. These ETFs are professionally managed funds that hold leading stocks throughout the aerospace and defense industry. Here are some top picks:

iShares U.S. Aerospace & Defense ETF
Invesco Aerospace & Defense ETF
SPDR S&P Aerospace & Defense ETF
Global X Defense Tech ETF
ARK Space Exploration & Innovation ETF

Risks of the Aerospace Sector

Because the A&D industry is heavily dependent on government spending, changes in budget management, international relations, and shifts in geopolitical tensions could make it a highly volatile sector at times. It’s also fiercely competitive. Aerospace and defense companies can create technology that makes that of others obsolete. Moreover, it’s a highly regulated industry. And compliance pressure could delay or even prevent new tech from coming into market. This is why it’s important to pay attention to what these companies are developing and where they stand against their competitors.

The Bottom Line

The aerospace and defense sector is driven by innovation and benefits from long-term government contracts. But it is a highly competitive and regulated market that needs to be carefully analyzed before you invest. It may be best to start by investing in ETFs that track the broader aerospace and defense industry, as this gives you diversification across many different companies at the forefront of the sector.

The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.

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