Shares of the two aerospace companies rose sharply after that, as the US and Iran reported progress in peace talks. Investors reviewed the prospects of the industry, which depends both on the state of international trade, as well as from defense budgets.
The aerospace industry rarely gets the signal, which simultaneously improves both areas of business. When the threat of a major war disappears, oil is getting cheaper, air travel comes to life, since the fuel is close to 30% operating costs of airlines. At the same time, planned defense spending does not disappear anywhere. NATO priorities, in particular, the development of defense systems using artificial intelligence, remain unchanged. Companies, which also produce civilian engines, and missile weapons, find themselves in a double win.
Shares of Rocket Lab jumped to 7%, and Redwire grew by 14,3%, and that's it, that the stock has already shown growth on 94,5% since the beginning of the year. This is not uncommon for Redwire, because over the last year the company recorded 98 fluctuations more than on 5%. But even by that standard, the current jump turned out to be significant, the market has significantly changed its perception of the company. Although ten days ago, Redwire fell to 6,2% due to the release of inflation data in the USA for April.
The rapid growth of Rocket Lab and Redwire shares proves it, that the aerospace sector's ability to simultaneously cash in on the civilian aviation market and stable NATO defense contracts makes it highly adaptable to geopolitical changes.
Source: https://universemagazine.com