Shares in the aerospace and defense supply chain have drawn fresh attention as investors look for steadier growth profiles beyond the recent IPO spotlight on Space Exploration Technologies, known as SpaceX. The focus is increasingly on industrial players with growing earnings power tied to long-cycle maintenance demand and proprietary aftermarket exposure—particularly Howmet Aerospace and TransDigm Group.
Both companies have reported strong results and are benefiting from industry dynamics that extend beyond new aircraft production, including airlines keeping fleets in service longer and data-center buildouts that increase demand for industrial power generation equipment.
Key takeaways
- Price move: SpaceX has traded below its IPO-day closing level after falling to $147.11 on June 23, even as it rebounded from that low.
- Catalyst: Howmet is seeing stronger aftermarket activity and industrial gas turbine growth, while TransDigm is capturing pricing power from proprietary, sole-source components.
- Key implication: Investors looking for aerospace exposure are increasingly emphasizing cash-generative aftermarket and IP-protected parts, rather than relying solely on new aircraft production cycles.
Why investors are looking past SpaceX
According to the article, SpaceX’s IPO earlier in the month initially vaulted founder Elon Musk to “trillionaire” status in market coverage, but the stock has since come under pressure. The report states that SpaceX shares fell to $147.11 on June 23 and remain below its opening-day closing price of $160.95.
For investors, the main takeaway is that aerospace and defense exposure does not have to mean buying the highest-profile headline story. Instead, investors appear to be shifting toward companies with earnings growth patterns that can hold up through delays in new aircraft deliveries and maintenance bottlenecks.
What’s driving Howmet Aerospace’s momentum
Howmet Aerospace is described as a high-moat supplier supporting aerospace and industrial ecosystems, with the report pointing to a benefit from aircraft OEM production delays. With commercial airlines flying older fleets longer amid robust travel demand, Howmet’s aftermarket business faces an expanding maintenance and overhaul pipeline.
In the first quarter, the article says Howmet reported revenue of $2.3 billion, up 19% year over year, and earnings per share of $1.44, up 71%. It also notes that, in 2025, Howmet’s commercial aerospace spare parts sales rose 48% year over year, lifting spares to roughly 23% of total revenue.
The report attributes the margin potential to mix: aftermarket spare parts are described as carrying higher margins than initial equipment builds. That matters for investors because higher-margin composition can support earnings growth even when the pace of new aircraft production is slower.
Industrial growth: gas turbines and data centers
Beyond aviation, the article frames Howmet’s expansion into industrial gas turbines as a separate growth driver. Data centers require large, uninterrupted electricity supply, which in turn can increase demand for gas turbines used to back up power systems, according to the report.
The company’s gas turbine segment delivered 39% year-over-year revenue growth in the first quarter. Management, as cited in the article, expects the roughly $1 billion gas turbine business to potentially double over the next three to five years, supported by long-term corporate energy contracts. The implication for investors is that Howmet’s earnings mix may diversify further away from purely aerospace-driven demand.
Howmet’s M&A and capital return strategy
According to the article, Howmet finalized a $1.8 billion acquisition of Consolidated Aerospace Manufacturing (CAM) in April. The deal is said to expand Howmet’s fastening systems portfolio and deepen exposure in defense and space.
The report also cites two additional portfolio moves: a $120 million purchase of Brunner in February and the CAM integration. It claims these actions are projected to add roughly $275 million in revenue and $60 million in adjusted EBITDA to the remainder of 2026. It further notes $450 million in share repurchases executed in early 2026.
Investors generally watch for two things in these situations: whether acquisitions raise forward earnings visibility and whether capital returns support per-share growth. The article argues that Howmet’s portfolio optimization and buybacks support a “beat-and-raise” trajectory, while also pointing to a concentrated institutional shareholder base.
TransDigm: IP-driven pricing power and aftermarket exposure
TransDigm Group’s business model, as described, centers on engineered, niche aerospace components rather than commoditized parts. The article states that roughly 90% of TransDigm’s net sales come from proprietary products where it owns the underlying intellectual property.
It also highlights that TransDigm is presented as the sole-source supplier for approximately 80% of the products it sells. That structure can support pricing power when airlines need specific replacements for valves, actuators, or cockpit control components, particularly under regulated maintenance schedules.
For the second quarter, the article says TransDigm reported revenue of $2.54 billion, up 18.3% year over year, and EPS of $9.20, up 11.6% versus the same period a year ago.
Why the aftermarket matters: higher margins and fleet utilization
The article emphasizes the commercial aftermarket as TransDigm’s main opportunity. Because aircraft must comply with strict maintenance schedules based on flight hours—and because OEM delivery bottlenecks can keep fleets in service longer—the aftermarket need for replacement parts can stay elevated, it says.
Commercial transport aftermarket sales rose 16% year over year in the second quarter, according to the report. It also cites an estimated consolidated EBITDA margin of 52.6%, characterizing the margin profile as rare for heavy manufacturing and supportive of earnings quality.
M&A and guidance raise signals
The article presents TransDigm as pursuing growth through acquisitions of small niche component makers that own proprietary IP and integrating them into its operating model while removing inefficiencies. It cites a strategy that includes the January purchase of Jet Parts Engineering and Victor Sierra Aviation for $2.2 billion.
Management, as reported, raised the fiscal 2026 revenue guidance midpoint by $420 million, with targets now ranging from $10.3 billion to $10.42 billion. The article also notes that TransDigm returned $905 million to shareholders via buybacks in the first half of fiscal 2026 while completing a $960 million acquisition of Stellant Systems to expand its defense aftermarket technology footprint.
Investors watching this corner of the market may want to track upcoming quarterly updates from Howmet and TransDigm, particularly any commentary on aftermarket demand durability, gas turbine order visibility, and the pace of integration from recent acquisitions. More broadly, with airline fleet utilization and industrial power infrastructure continuing to influence underlying demand, upcoming macro catalysts—especially data on infrastructure spending, inflation trends, and interest-rate expectations—could shape how investors value long-duration, cash-generative aerospace suppliers.
