Aviation Leader Harnesses Aerospace Tailwinds as Stock Surges 170%

Aerospace and defense stocks roared last year as the Trump administration touted substantial increases in military spending.

Trends tend to persist longer than most investors expect, and we’re seeing the momentum carry over into 2026. The Zacks Aerospace sector is currently ranked #2 out of 16 Zacks Ranked Sectors, advancing nearly 9% year-to-date through early February.

A leading stock in the sector, FTAI Aviation blends operational excellence with timely innovation. The company, a specialized player in aviation leasing and aerospace products, has emerged as one of the standout performers.

Over the past year, FTAI shares delivered remarkable gains, skyrocketing over 170% as engine demand drove sustained growth. This surge reflects not only the broader aerospace and defense sector's resilience, but also FTAI's unique positioning in high-demand engine aftermarket services along with emerging opportunities like power generation for AI data centers.

Digging Deeper into FTAI’s Ascent

The aerospace and defense industry provided a fertile backdrop for FTAI's climb in 2025. The sector demonstrated robust performance, with resilient growth driven by increasing global defense budgets, commercial air travel recovery, and technological advancements.

Adding to the bullish case, expansion in AI integration, supply chain modernization, and M&A activity led to very strong deal volume. U.S. defense spending ramped up amid geopolitical tensions, while commercial aviation benefited from pent-up demand and fleet modernization. The industry's economic impact exceeded $995 billion in business activity, underscoring its strength even in a volatile macro environment.

FTAI capitalized on these tailwinds through its core focus on CFM56 and V2500 engines—the workhorses of narrowbody aircraft like the Boeing 737 and Airbus A320. A post-pandemic travel rebound created acute engine shortages, as airlines extended asset lives amid production delays from manufacturers.

FTAI's Aviation Leasing segment, which owns and leases engines and aircraft, saw soaring utilization and pricing power. The Aerospace Products division, centered on maintenance, repair, and overhaul (MRO) via its module factory, became a profit engine, delivering high-margin services in a supply-constrained market.

A pivotal development boosting 2025 performance was FTAI's strategic pivot into adjacent high-growth areas. Late in the year, the company announced plans to adapt CFM56 engines for turbine power generation, targeting the explosive energy needs of AI data centers.

This innovative extension—converting aviation assets for ground-based power—addressed a critical bottleneck, as hyperscalers scramble for reliable electricity amid grid strains. The news propelled shares higher in December 2025, highlighting FTAI's agility in monetizing its expertise beyond traditional aviation.

Why 2026 Could Be Another Strong Year

Late last year, FTAI increased its dividend to $0.35 per share, reflecting confidence in future earnings growth, while record orders validated the business model's scalability. The company's asset-light approach—acquiring, enhancing, and redeploying engines—generated strong cash flows, supporting shareholder returns and reinvestment.

Currently, FTAI Aviation FTAI carries a Zacks Rank #3 (Hold), reflecting balanced expectations amid optimism around its growth trajectory. The upcoming Q4 2025 earnings report, scheduled for February 25^th, carries consensus EPS estimates around $1.22—translating to more than 45% growth relative to the prior-year quarter. Revenue projections (+46.2%) support continued expansion into engine services and new ventures.

Risks include commodity-like engine pricing volatility or delays in new projects, but FTAI's proven management and balance sheet strength mitigate these. FTAI stands out for its focused strategy in a vital industry serving both skies and data centers.

Bottom Line

The aerospace cycle remains supportive—commercial fleets modernizing, defense stable—and FTAI's niche in aftermarket engines provides defensiveness with upside. Emerging power generation initiatives add a fresh catalyst in the AI infrastructure boom.

For investors seeking exposure to aerospace resilience with innovative edges, FTAI merits sincere consideration—a company not just riding sector strength but actively shaping its future.

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This article originally published on Zacks Investment Research (zacks.com).

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