With inflation signals mixed, energy prices tied to geopolitics, and interest rate expectations shifting around fresh data, many investors are looking for sectors that are closely linked to government spending and long-term global security needs. The Aerospace and Defense screener focuses on companies that manufacture or provide services to this part of the economy, where demand often reflects policy priorities as much as the business cycle. This article highlights 3 stocks from that screener, explaining how each one fits into today’s macro backdrop so you can decide whether they deserve a place on your research list.

Redwire (RDW)

Overview: Redwire is a space infrastructure and defense technology company that supplies sensors, avionics, in-space manufacturing, microgravity research facilities, and uncrewed systems to government and commercial customers in the United States, Europe, and other markets.

Operations: Redwire generates about US$210.4m of revenue from its Space segment and US$160.6m from Defense Tech, with roughly US$210.0m coming from the United States, US$136.2m from Europe, and US$24.7m from other regions.

Market Cap: US$2.0b

Redwire offers investors exposure to both the expansion of commercial space activity and growing defense demand, with recent contracts for Stalker and Penguin uncrewed systems helping to build a record backlog and deepen ties with U.S. and allied customers. At the same time, the company is still reporting large losses and relies heavily on external funding and equity issuance. Future returns are likely to be sensitive to how well management turns contract wins and new products like SpaceMD into sustainable, higher margin revenue. If you are looking at Redwire as a potential way to consider long-term space and security spending, the key question is whether its mix of high-growth projects, government contracts, and ongoing dilution adds up to a risk profile you are comfortable with.

Redwire’s expanding backlog and new products suggest a story still taking shape, but the real question is how that growth lines up with its cash needs and dilution risk, which is exactly what the 1 key reward and 3 important warning signs (2 are major!) starts to reveal.

General Electric (GE)

Overview: General Electric, operating as GE Aerospace, builds and services commercial and defense jet engines, aircraft power systems, and critical components used by airlines, militaries, and airframe manufacturers across the world.

Operations: GE generates about US$37.7b in revenue from Commercial Engines & Services, US$11.5b from Defense & Propulsion Technologies, and US$1.4b from Corporate & Other activities.

Market Cap: US$361.9b

GE Aerospace is attracting attention because it couples a very large installed engine base and over US$170b in backlog with high margin services work that can support cash generation for years, while digital tools and AI in maintenance are designed to cut turnaround times and deepen customer relationships. At the same time, the stock carries a rich P/E multiple, relies heavily on commercial aviation health, and faces execution risk as it ramps next generation programs, such as GE9X and CFM RISE, in a tight supply chain. For investors tracking aerospace and defense, the real puzzle is whether that mix of backlog, earnings growth, and higher leverage justifies the current valuation or calls for more caution.

GE Aerospace’s backlog and P/E story is only half the picture. The real tension is how that valuation stacks up against future cash and program risk, which the analyst forecasts for General Electric starts to unpack.

Rocket Lab (RKLB)

Overview: Rocket Lab is a space company that provides launch services and space systems, designing and manufacturing small and medium-class rockets, satellites, spacecraft components, and mission management software for commercial, government, and aerospace contractor customers worldwide.

Operations: Rocket Lab generates about US$452.5m from its Space Systems segment and US$227.1m from Launch Services, with systems and satellite-related work currently contributing the larger share of revenue.

Market Cap: US$40.4b

Rocket Lab gives you direct exposure to the growing space infrastructure “backbone,” combining frequent Electron launches, a larger and more reusable Neutron vehicle in development, and a growing Space Systems business that already accounts for roughly two thirds of revenue. The proposed US$8b Iridium acquisition would add spectrum and a global satellite network, strengthening the case for a vertically integrated platform that can support everything from government missions to IoT and direct-to-device services. Against that, you are dealing with ongoing losses, share dilution, insider selling, and a stock that has seen sharp swings. The core question is whether the potential for recurring services revenue and government contracts outweighs the funding and execution risk.

Rocket Lab’s push toward a vertically integrated space platform, plus the proposed US$8b Iridium deal, could be masking one crucial tension in its story that the analyst forecasts for Rocket Lab quietly brings into focus.

The three stocks covered here are only a starting point, as the full Aerospace And Defense screener surfaces 66 more companies tied to aerospace and defense with equally compelling stories behind their contracts, backlogs, and balance sheets. Use Simply Wall St to identify, filter, and analyze the specific catalysts and narratives that matter to you so you can focus on the ideas in this space that you find most compelling.

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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.