Howmet Aerospace (HWM) Positioned to Benefit from Increasing Demand in Aircraft Components

Aristotle Funds, an investment advisor, released its “Growth Equity Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index rising 2.66% and the Bloomberg U.S. Aggregate Bond Index increasing by 1.10%. Within the Russell 1000 Growth Index, healthcare, communication services, and financials were the top-performing sectors, while utilities, real estate, and materials lagged. The U.S. economy showed resilience. However, consumer confidence deteriorated toward year-end, raising concerns about future spending and the labor market. Against this backdrop, the Aristotle Growth Equity Fund (Class I-2) returned 0.95%, underperforming the Russell 1000 Growth Index’s 1.12%. Poor security selection in the information technology and consumer discretionary sectors detracted from performance, while positive contributions from healthcare and industrials improved relative performance. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Aristotle Growth Equity Fund highlighted stocks like Howmet Aerospace Inc. (NYSE:HWM). Howmet Aerospace Inc. (NYSE:HWM) is an aerospace company that provides advanced engineered solutions to aerospace and transportation companies.  On February 25, 2026, Howmet Aerospace Inc. (NYSE:HWM) stock closed at $259.64 per share. One-month return of Howmet Aerospace Inc. (NYSE:HWM) was 24.27%, and its shares gained 94.60% over the past 52 weeks. Howmet Aerospace Inc. (NYSE:HWM) has a market capitalization of $104.51 billion.

Aristotle Growth Equity Fund stated the following regarding Howmet Aerospace Inc. (NYSE:HWM) in its fourth quarter 2025 investor letter:

"Howmet Aerospace Inc. (NYSE:HWM) is a leading global provider of advanced engineered products for the aerospace, power generation, and transportation industries, specializing in jet engine components, aerospace fastening systems, airframe structural parts, and forged aluminum wheels. With operations in 19 countries and a workforce of 24,000 employees, the company manufactures most of its products in North America and Europe. Howmet’s business is structured into four segments—Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels—serving key markets such as commercial aerospace, defense, commercial transportation, and institutional sectors.

We believe Howmet Aerospace stands out as a compelling investment opportunity due to its critical role in the aerospace, defense, and industrial markets. As global travel and air freight continue to grow, and major aircraft manufacturers ramp up production to meet surging demand, Howmet is well-positioned to benefit from increasing orders for its essential aircraft components and engine parts. The company is also set to capitalize on rising defense budgets worldwide and the expanding need for industrial gas turbines driven by the growth of artificial intelligence and data centers. While heavy-duty truck production remains weak, Howmet Aerospace maintains strong market share and is poised to benefit from future cyclical recovery. Ongoing capacity expansions further reinforce the company’s ability to capture opportunities across its diversified end markets. Shares are valued at higher multiples compared to their recent historical averages, but we believe this is justified by the company’s strong earnings growth outlook and consistent track record of exceeding expectations."

Howmet Aerospace Inc. (NYSE:HWM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 71 hedge fund portfolios held Howmet Aerospace Inc. (NYSE:HWM) at the end of the fourth quarter, up from 57 in the previous quarter. In Q4 2025, Howmet Aerospace Inc. (NYSE:HWM) reported revenue of $2.17 billion marking an increase of 15% from Q4 2024. While we acknowledge the potential of Howmet Aerospace Inc. (NYSE:HWM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Howmet Aerospace Inc. (NYSE:HWM) and shared a list of best aerospace and defense stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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