Q4 2025 Aerospace and Defense Industry Update

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GCG’s Q4 2025 Aerospace and Defense Industry Update provides an overview of the latest trends in the sector, including recent equity market performance, valuation multiples, and transaction activity.

Select highlights include the following:

  • The A&D sector saw accelerating modernization and demand momentum in Q4 2025, driven by U.S. acquisition reform initiatives, the resolution of Boeing’s labor strike restoring production stability, major commercial and defense orders from the Dubai Airshow, and increased Pentagon investment in autonomous and AI-enabled platforms.
  • M&A activity strengthened materially in Q4 2025 with 118 transactions closed, marking one of the strongest quarters in recent periods, supported by rising aircraft production rates, improving supply-chain stability, continued investment in advanced defense capabilities, and ongoing consolidation, with strategic buyers representing 64% of deal volume.
  • Public A&D equities continued to outperform broader markets in Q4 2025, supported by durable commercial and defense demand, production normalization among aircraft suppliers and OEMs, and sustained government funding for defense programs, with all A&D subsectors exceeding the S&P 500 and NASDAQ over the last twelve months.
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