The aerospace and defense sectors are showing signs of a strong breakout that could last for years. These industries, once dominated by government contracts, now provide a range of services from traditional contracting and manufacturing to research and development as well as cyber and data security.
This breakout is thanks to a combination of several factors. First, there is a resurgence of government spending on defense and security, particularly in the United States, China, and India, as these countries seek to upgrade their capabilities. This increased spending is coupled with a demand for improved technological capabilities, such as UAVs and payloads, espionage technologies, advanced weaponry, lightweight materials, and more.
The aerospace industry is also seeing growth because of the improved technology in satellite systems, and the demand for faster and more reliable air travel. With advancements in the aerospace industry comes the need for more efficient airports, better air traffic control, and improved jet engines.
At the same time, the defense industry is undergoing a digital transformation. Companies within this sector are investing heavily in cyber security and data analytics technology, with a focus on improving the reliability and efficiency of their systems.
The combination of these improved capabilities and surge in demand has put a surge in the stock of many aerospace and defense companies. The Lockheed Martin Corporation, Raytheon, and Northrop Grumman are just a few of the companies that are experiencing a multi-year breakout as their stock prices soar.
This trend is likely to continue into the future, particularly with the increasing role of government spending in the aerospace and defense sectors. As these industries continue to grow and innovate, investors should keep an eye on them for future stock breakouts.