The escalating geopolitical tensions, primarily due to the Russia-Ukraine war, induced momentum in air & defense stocks since the beginning of 2022. Moreover, the emerging threats from China as it eyes Taiwan should boost the performance of defense stocks.
Last month, the U.S. House of Representatives Armed Services Committee backed a proposal to increase defense spending by $37 billion, on top of the $773 billion proposed by the Biden Administration. Moreover, the United States is the world's largest arms exporter and is expected to benefit from the increased military budgets globally.
