Missile defense is back in the spotlight after RTX’s Raytheon secured a multi year U.S. contract worth up to US$6.3b for SM 3 Block IB interceptors, and that kind of long term order book can reshape expectations across the sector. Investors watching this shift risk sitting on the sidelines while others reassess exposure. This article walks through 3 stocks that appear closely tied to this latest round of missile defense spending.
The three stocks below are only a starter pack, and the full screen pulled up 27 more U.S. defense contractors with missile and air defense exposure that build equally detailed stories around this theme.
If you want to quickly identify which of those might suit your portfolio, head straight to the U.S. Defense Contractors – Missile & Air Defense Systems screener to filter, analyze, and focus on your highest conviction ideas.
AIRO Group Holdings (AIRO)
AIRO Group Holdings plugs into the missile and air defense theme through its drones and avionics, which can support ISR and command links that feed wider interceptor networks.
AIRO Group Holdings runs an integrated drones, avionics, and pilot training platform, with the missile and air defense angle coming from systems that feed targeting, ISR, and navigation data into wider interceptor networks. Most revenue currently comes from Drones at about US$96 million, followed by Avionics at roughly US$6 million and Training at around US$4 million, and the stock is valued at about US$200 million.
"Although the long term move toward electric and hybrid air mobility supports AIRO's Jaunt cargo drone roadmap, the 2027 commercialization target and dependence on certification in Canada's YMX Innovation Zone introduce execution and regulatory risk around when any cargo logistics revenue and related earnings contribution actually materialize."
What happens if a single assumption about how quickly defense customers adopt AIRO Group Holdings’ next wave of ISR platforms fails to hold?
If that adoption curve matters to your thesis, read the full narrative for AIRO Group Holdings to see how AIRO Group Holdings could reprice as execution risk and defense demand decouple.
Parker-Hannifin (PH)
Parker-Hannifin sits in this missile and air defense screen because its motion and control hardware helps power everything from aircraft to launch systems. The real interest today is how that mix is tilting toward higher margin aerospace and filtration work.
Parker-Hannifin manufactures motion and control systems for aerospace and industrial customers, with Aerospace Systems generating about US$7.1b of revenue, Diversified Industrial North America around US$8.4b, and Diversified Industrial International roughly US$6.0b. The stock is a roughly US$120.2b large cap.
"The completion of the Filtration Group acquisition in August 2026, which is expected to create one of the largest global industrial filtration businesses with broader aftermarket exposure and identified synergies, opens scope for a richer mix of recurring service and replacement revenue that could support higher gross margins and steadier free cash flow."
What investors still need to weigh is how one unseen pressure on future defense orders could tilt that margin and cash flow story either way.
That hidden swing factor is exactly what full narrative for Parker-Hannifin unpacks, showing where Parker-Hannifin’s filtration and aerospace mix could either accelerate potential returns or quietly limit further gains.
RADA Electronic Industries (RADA)
RADA Electronic Industries focuses on defense electronics that support air and missile defense, supplying radar, avionics, and data recording systems to air forces and UAV programs worldwide. The business is valued at about US$491 million, putting it in the mid cap bracket for this screener.
RADA Electronic Industries gives you pure-play exposure to radar and sensing gear that underpins air and missile defense, from land-based tactical radars to avionics for UAVs. Forecast growth and strong theme alignment are clear, yet margins and valuation depend on how one unseen pressure on future radar program wins plays out.
That uncertain radar pipeline now meets the detailed analysis report for RADA Electronic Industries so you can see whether upcoming contracts justify treating RADA Electronic Industries as mispriced potential.
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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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