We recently published a list of Goldman Sachs Defense Stocks: Top 12 Stock Picks. In this article, we will take a look at where Howmet Aerospace Inc. (NYSE:HWM) stands against other top defense stock picks from the Goldman Sachs Portfolio.

After a subdued start to the year, American defense stocks are beginning to see improved returns. Investors are buoyed by President Trump’s plans for a $1 trillion defense budget for fiscal 2026, adding to the momentum from last month’s unveiling of the F-47 and announcement to resurrect the country’s shipbuilding industry.

READ ALSO: 10 Best Mid Cap Defense Stocks to Buy According to Analysts and 10 Best Performing Defense Stocks So Far in 2025.

The sector has received another boost after market chatter that tariff negotiations to address trade imbalances could include commitments from foreign countries to buy weapons from the US. In a statement released on April 8, Vietnam’s prime minister asked for a 45-day delay in the imposition of tariffs and stated his country would buy more American goods, including weapons, to tackle the trade gap.

On April 11, Goldman analyst Noah Poponak adjusted his ratings and price targets for defense stocks, and the most notable adjustment was a prominent Navy shipbuilder receiving a double upgrade on the back of an executive order signed by Trump to revitalize the sector. Poponak expects the stock to benefit, with shipbuilding expected to be a high priority within the defense budget.

The firm is known for its expertise in stock recommendations, helping investors identify high-potential companies. GS boasts a vast network of analysts, covers a wide range of stocks. It also has a research team led by analysts and economists from around the world, offering insights on the economy and the broader market.

In a report released in March this year, Goldman Sachs Research projected a significant increase in defense spending by EU member nations. Military expenditure in the euro area accounted for 1.8% of the GDP in 2024, and is projected to rise to 2.4% by 2027. The firm’s analysts estimate the increased spending to positively impact GDP growth, with every €100 spent on defense to boost GDP by approximately €50.

Defense stocks have rallied in Europe this year, as regional capitals unlocked billions to supercharge their militaries. While recent tariffs have sparked a major plunge in shares over the past couple of weeks, this has been a year to remember for several European defense contractors, with significant returns so far in 2025.

With that said, let’s head over to the list of the top defense picks from the Goldman Sachs stock portfolio.

Engineers examining stress tests of an aircraft engine, working to make sure its ready for flight.

Methodology

For this article, we scanned Goldman Sachs’ 13F portfolio as of December 31, 2024. From there, we picked the top 12 defense stocks according to their stake value and ranked them in ascending order.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Howmet Aerospace Inc. (NYSE:HWM)

Stake Value as of Q4 2024: $144,773,105

Howmet Aerospace Inc. (NYSE:HWM) is one of the top defense picks from the Goldman Sachs stock portfolio. The company manufactures components for aircraft engines, fasteners, aluminum wheels for trucks, and titanium structures for aerospace and defense applications.

The stock has gained 94% over the past year, with year-to-date returns of nearly 13% as of the close of business on April 18. Howmet Aerospace Inc. (NYSE:HWM) has attracted significant investor interest due to its robust financial performance. In February, the company reported major year-over-year revenue and net income increases for the fourth quarter and full year 2024.

According to Insider Monkey’s database for Q4 2024, 58 hedge funds held a stake in the company, improving from 45 at the end of the third quarter. Hardman Johnston Global Equity Strategy stated the following regarding Howmet Aerospace Inc. (NYSE:HWM) in its Q4 2024 investor letter:

“From a sector standpoint, the main drivers of the portfolio’s outperformance during the fourth quarter were Industrials and Materials. Within Industrials, Howmet Aerospace Inc. (NYSE:HWM) and Vertiv Holdings Co. were the largest contributors to outperformance. Howmet reported an earnings beat during the quarter with broad-based strength spanning across all key segments. In particular, the company’s Engine Products and Fasteners segment performed well. During the earnings call, management spent significant time describing the emerging new growth driver of industrial gas turbines, which are used in gas power plants, which have become a focus for investors due to accelerating demand from AI data centers. Howmet is the leading supplier to the three major producers of these engines and will benefit from both initial purposes and the long-term maintenance demand.”

On April 9, Howmet Aerospace Inc. (NYSE:HWM)’s board of directors approved a dividend of 10 cents per share on the company’s common stock and 93.75 cents per share on the outstanding preferred stock, reiterating its commitment to shareholder returns.

Overall, HWM ranks 10th among the Goldman Sachs Defense Stocks: Top 12 Stock Picks. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than HWM but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.