With the UAE freezing roughly US$30b of annual trade with Iran and new US sanctions reshaping key shipping and finance routes, defense and aerospace stocks are suddenly in sharper focus for investors watching geopolitical risk. The stakes are high, and sitting on the sidelines may mean missing meaningful shifts in capital flows. This article breaks down 3 stocks exposed to this story and how they could be affected.

The stocks covered below are just a starting sample, and the full screen surfaced 31 more companies in global defense and aerospace with equally compelling narratives that are not covered in this article. To identify your own highest conviction ideas, head straight to the Global Defense & Aerospace Stocks screener and analyze these companies side by side based on the factors that matter most to you.

Elmet Group (ELMT)

Overview: Elmet Group manufactures precision refractory metal components and high power microwave systems that power radar, missile tracking, directed energy and other defense and aerospace applications, putting it squarely in the Global Defense & Aerospace Stocks theme. Beyond defense and government work, it also sells into industrial, medical, semiconductor and energy markets, which can broaden its demand base over time.

Operations: Elmet Group generates most of its revenue from Critical Materials and Components at about US$196 million, with around US$32 million from Engineered Microwave Products, and virtually all of its roughly US$228 million in sales come from the United States, with only a small contribution from Europe.

Market Cap: US$550 million

For investors tracking defense supply chains, Elmet Group offers direct exposure to components and high energy systems tied to radar and missile programs that may see more attention as sanctions push governments to secure critical materials and domestic capability. The company sits at an earlier stage, with revenue growth but recent losses and reliance on external borrowing, so progress toward its internal margin targets and cash generation will matter more than short term share moves. The large order backlog in aerospace, defense and government work, plus fresh index inclusion and IPO cash, give Elmet tools to work with, but the mix of tungsten price swings, board inexperience and financing risk raise questions that are worth studying more closely before taking a view.

Elmet Group’s growing order backlog and fresh IPO cash are only part of the picture. The bigger question is whether the balance sheet can support that plan. Review the Elmet Group financial footing in the Elmet Group financial health report

AEVEX (AVEX)

Overview: AEVEX is a U.S. defense technology contractor focused on unmanned aerial and maritime systems, building UAS, unmanned surface vehicles and mission software that feed directly into U.S. autonomous warfare and surveillance priorities. Through its Tactical Systems hardware and Global Solutions services, AEVEX supports airborne intelligence, surveillance and reconnaissance, counter UAS and specialized mission aircraft work that fit squarely within the Global Defense & Aerospace Stocks theme.

Operations: AEVEX generates about US$585 million of revenue from Tactical Systems and roughly US$112 million from Global Solutions, with around US$689 million coming from the United States and only about US$8 million from other countries.

Market Cap: US$2.1b

AEVEX provides focused exposure to the push for autonomous systems, from low cost drones to long range precision strike platforms, at a time when U.S. and allied defense agencies are placing greater emphasis on unmanned capabilities and mission software. Management has identified an opportunity pipeline in the billions of dollars and capacity to produce over 1,000 units per month. If that capacity is utilized, earnings could change over time. Recent margin compression and reliance on external funding highlight the importance of execution quality. The company is also active in M&A, including a proposed BlackSea Technologies deal, which could broaden its reach across air, surface and subsea domains but adds integration and balance sheet risk that investors may want to monitor closely.

AEVEX looks like an acceleration story in unmanned systems, where capacity, contracts and acquisitions could reshape the earnings profile. Get the full picture in the analyst forecasts for AEVEX and see what might be hiding behind those margins

Boeing (BA)

Overview: Boeing is a US aerospace and defense company that builds and supports commercial jetliners, military aircraft, missile defense systems, satellites and human spaceflight platforms, tying it directly to the Global Defense & Aerospace Stocks theme. Through its Commercial Airplanes, Defense, Space & Security and Global Services segments, Boeing supplies aircraft, weapons systems and mission support to airlines and governments worldwide.

Operations: Boeing generates about US$43.4b of revenue from Commercial Airplanes, US$29.4b from Defense, Space & Security and US$21.3b from Global Services, with around US$47.8b reported from the United States and sizeable contributions from Asia, Europe and the Middle East.

Market Cap: US$165.9b

Boeing gives you direct exposure to large scale defense and aerospace programs at a time when trade routes, missile defense and regional security are moving up government priority lists, reinforced by contracts like the F 15 deal with a potential US$131.23b ceiling. The company carries a very large commercial and defense backlog and is working through milestones such as 737 MAX 7 certification and key military programs, which together underpin the long dated revenue story. At the same time, high debt, pressure on cash flow coverage and past quality issues mean the thesis depends on steady execution rather than headlines alone. For investors who want both defense exposure and potential upside from commercial recovery, Boeing is a complex story that merits closer inspection.

Boeing’s large commercial and defense backlog could be masking the real story. Step into the 4 key rewards and 2 important warning signs (1 is major!) to see how high debt and execution hurdles might reshape the risk reward trade off.

Curious About Alternatives Before You Move On

Some of the most interesting breakouts start flying before the crowd even notices. Fresh ideas get caught quickly, and information advantage drops fast, so consider acting while opportunities are still emerging.

• Spot potential momentum shifts early by reviewing hand picked companies in the 19 high quality undiscovered gems while they are still under the radar for now.
• Position around structural demand trends by scanning the curated 38 power grid technology and infrastructure stocks before grid upgrade stories move from quiet build up to full momentum.
• Explore durable compounding stories by filtering for financially resilient businesses through the list of solid balance sheet and fundamentals (51 results) while balance sheet quality may still be mispriced.

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.