Why These Defense Stocks Are Gaining This Week

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1. Embraer S.A. (NYSE:ERJ)

Weekly Gains: 20.27%

Embraer S.A. (NYSE:ERJ) is a Brazil-based jet manufacturer that produces aircraft for commercial and executive aviation and defense purposes. It tops the charts for defense stocks that are gaining this week, with returns of over 20% during the period.

Last month, the company signed a $7 billion agreement with Flexjet to supply 182 aircraft and 30 options. Later in the month, Japan’s ANA also placed an order for 15 Embraer S.A. (NYSE:ERJ) E190-E2 planes to support its domestic operations.

On February 27, Embraer S.A. (NYSE:ERJ) declared robust results for the fourth quarter and full year 2024. It generated a revenue of $2.3 billion in Q4, up 17% from last year. Full year revenue stood at $6.4 billion, the highest ever in the company’s history. A key highlight was a 40% increase in Defense & Security revenue compared to last year.

Adjusted EBIT for Q4 was $265 million, with a margin of 11.5%. For 2024, the company generated $780 million with an 11.1% margin. Embraer S.A. (NYSE:ERJ) ended the year with a record order backlog of $26.3 billion.

Overall, Embraer S.A. (NYSE:ERJ) ranks first among the defense stocks that are gaining this week. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ERJ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

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