Industrial Growth Drivers: Howmet Aerospace and Generac Positioned for Long-Term Gains

The industrial sector has emerged as a strong performer over the past year, with Howmet Aerospace (NYSE: HWM) and Generac Holdings (NYSE: GNRC) leading the charge through strategic exposure to high-growth end markets. Both companies have seen significant price appreciation, diverging from the typical AI-centric tech rally. Howmet is capitalizing on a global aerospace market projected to expand from approximately $434 billion in 2026 to $846 billion by 2035. In Q4 2025, the company's commercial aerospace division accounted for 53% of total revenue, while the defense aerospace segment contributed 17%. Despite a massive five-year run of over 700%, the company remains a focal point for investors ahead of its Q1 2026 earnings report on May 7. However, Howmet's valuation is currently stretched, with a forward price-to-earnings (P/E) ratio of 55. This elevated multiple suggests that the market has priced in significant growth, leaving little room for operational missteps in upcoming quarterly reports. Simultaneously, Generac is diversifying its revenue streams by providing critical backup power infrastructure for hyperscale data centers. In Q4 2025, Generac's commercial and industrial division saw a 10% increase in sales, reaching $400 million. CEO Aaron Jagdfeld indicated that momentum with data center customers is expected to add significant volumes to the company's backlog over the next several quarters. While Generac's shares have climbed nearly 100% over the last year, the company is still recovering from a five-year decline of more than 35%. With a forward P/E of 25, the stock reflects growing optimism regarding its role in the data center ecosystem. Both companies face the challenge of maintaining execution to justify their current momentum.