As investors rotate away from mega-cap tech stocks, two industrial companies offer compelling growth opportunities. Watts Water Technologies benefits from AI data center infrastructure demand with record 2025 results and 8-12% projected 2026 growth. ATI Inc. is positioned in aerospace and defense with strong titanium supply contracts from Boeing and Airbus, posting highest sales since 2012.

The global Aerospace and Defense Materials Market is expected to grow from USD 22.69 billion in 2025 to USD 38.78 billion by 2035 at a CAGR of 5.78%, driven by demand for lightweight materials, defense modernization, and advanced composites. The U.S. market specifically is projected to grow from USD 7.69 billion to USD 11.41 billion. North America leads with 39.89% market share, while Asia Pacific is the fastest-growing region at 8.87% CAGR.

The global High-Entropy Alloy market is projected to grow from USD 1.75 billion in 2025 to USD 5.19 billion by 2035, with a CAGR of 11.46%. The U.S. market is expected to expand from USD 0.42 billion to USD 1.58 billion over the same period. Growth is driven by demand from aerospace, defense, and energy sectors for high-performance, corrosion-resistant materials. Transition metal HEAs and powder metallurgy dominate current market segments, while additive manufacturing is rapidly expanding.

The global additive manufacturing with metal powders market is projected to grow from $46.39 billion in 2026 to $166.41 billion by 2035, at a CAGR of 15.25%. North America dominates with 38.5% volume share, while Asia Pacific is the fastest-growing region at 24.62% CAGR. Stainless steel and titanium alloys lead material types, with powder bed fusion technology commanding 76.2% market share. Aerospace & defense is the largest end-use sector at 39.8% volume share.

Amid potential AI market fatigue, analysts highlight three stocks with strong growth potential: Carpenter Technology, Booking Holdings, and Allegheny Technologies, each demonstrating solid fundamentals across aerospace, travel, and manufacturing sectors.

Specialty materials producer ATI reported strong Q3 earnings, with total sales up 7% year-over-year and aerospace and defense business growing 21%. The company beat analyst expectations and raised its full-year earnings guidance.

Allegheny Technologies (ATI) reported strong third-quarter earnings and raised full-year guidance, benefiting from improving aerospace supply chain conditions and increased aircraft production expectations.

KeyBanc Capital Markets analyst Philip Gibbs upgraded ATI to Overweight, citing expectations of stronger operational performance, gains from aerospace/defense ramp-up, and new contracts, despite potential risks from tariffs and airframe slowdown.

The superalloys market is projected to grow at a CAGR of 9% from 2024 to 2031, driven by rising demand for lightweight and high-performance components in aerospace and automotive industries, as well as increasing use in the power generation sector.

The global aerospace MRO raw materials market is expected to grow at a CAGR of 6.76% during 2025-2030, driven by the increasing global fleet size, the need for regular aircraft maintenance, and advancements in material technology. The market is dominated by the commercial aircraft segment and the Americas region, with the Asia-Pacific region expected to witness the highest growth.

Rocket Lab USA (RKLB) is set to break its own record of 10 launches in a year, with 12 launches planned for 2023. KeyBanc remains confident in Rocket Lab, raising its price target, while expressing skepticism about the outlook for other aerospace stocks like ATI Inc. and Howmet Aerospace.

Eastman Chemical Company is expected to release its Q2 2024 results on July 25. The company is likely to have benefited from cost-cutting and productivity initiatives, as well as its innovation-driven growth strategy. However, soft demand in certain markets is likely to have weighed on its performance.