Invesco Aerospace & Defense ETF

PPA

Market cap $8.43B

Major combat operations in Iran, coordinated with Israel, are intensifying risk-off sentiment across global markets, impacting equities, crypto, energy, and logistics. Oil companies like Exxon Mobil (XOM) and Chevron (CVX) may benefit from higher oil prices, but gains depend on supply disruptions and infrastructure damage.

Defense contractors are entering a new era as key pillars of the industrial base, driven by robust, less cyclical demand and government-backed capacity expansion. Book-to-bill ratios and backlogs at LHX, RTX, NOC, and GD signal strong forward revenue visibility, with RTX posting a standout 1.56x ratio and $270B backlog.

The aerospace and defense sector is experiencing parallel growth in commercial and defense markets, with revenues projected to rise from $800B in 2025 to $1.25T by the mid-2030s. Commercial aerospace faces supply chain disruptions and regulatory hurdles, while aftermarket sales and space-related opportunities drive near-term revenue growth.

The Invesco Aerospace & Defense ETF ( NYSEARCA:PPA ) has crushed the broader market over the past year, delivering 44% returns compared to the S&P 500's 16% gain.

SHLD and other defense ETFs are in focus as Q4 earnings loom, with rising global military spending set to validate record contract-driven growth.

CARU and other ETFs slid as Trump's Greenland-linked tariff threat and the EU's retaliation jolted autos, aerospace, tech and banks.

Invesco Aerospace & Defense ETF (PPA) remains a compelling buy, with accelerating price momentum driven by heightened global defense spending and geopolitical tensions. PPA outperformed the S&P 500 in 2025, and is expected to deliver even higher returns in 2026 amid robust industry fundamentals. The ETF's top holdings—BA, RTX, LMT, GE, NOC—show massive backlogs, record profitability, and strong demand, supporting long-term growth prospects.

Invesco Aerospace & Defense ETF is rated Buy, driven by President Trump's proposed $1.5T defense budget and robust U.S. military actions. PPA consistently outperforms the S&P 500, with a 10-year total return of $50,790 on $10,000 invested, and strong top-10 holdings with long dividend histories. The ETF benefits from U.S. government contracts, increased defense and space spending, and a diversified, low-turnover portfolio of established industry leaders.

Trump's $1.5T military budget and rising global tensions could lift defense ETFs and spill over into cybersecurity, AI, manufacturing and space ETFs.

In the last three months of 2025, the tech sector experienced what some called a “correction”.