Leonardo S.p.A. stock draws US investor interest amid global defense spending surge and strategic US subsidiary growth

Leonardo S.p.A. stock has gained attention from US investors as global defense budgets expand amid ongoing geopolitical tensions. The Italian aerospace and defense giant, listed under ISIN IT0003856405, reports significant US exposure with 23.2% of its sales originating from the United States, bolstered by its 71.77% stake in Leonardo DRS, a key US-listed subsidiary. This positioning makes it relevant for American portfolios seeking diversified defense plays beyond pure US contractors.

As of: 24.03.2026

By Elena Rossi, Aerospace Defense Analyst: Leonardo S.p.A. stands at the intersection of European industrial strength and US market opportunities, making its stock a watchlist candidate for investors tracking multi-domain defense capabilities in 2026.

Leonardo's Core Business and Recent Market Positioning

Leonardo S.p.A. operates as a global leader in aerospace, defense, and security, with business segments spanning defence systems at 39.7% of revenues, helicopters at 29.5%, aeronautical equipment at 15.4%, and smaller contributions from space systems, aerostructures, cybersecurity, and other areas. The company maintains 129 production sites across Italy (60), the UK (8), the US (27), and 34 other countries, employing 61,265 people. Geographically, sales break down as Italy 18.2%, UK 12.3%, Europe 26.4%, US 23.2%, and rest of world 19.9%.

This diversified footprint underscores Leonardo's resilience. Defence electronics and security form the backbone, including weapons, radars, and cyber solutions. Helicopters serve both civilian and military needs, while aeronautics covers aircraft production. The US presence, particularly through 27 sites, aligns with growing demand from American allies and domestic programs.

For US investors, this structure offers indirect exposure to European defense spending without full currency risk, as USD-denominated revenues provide a natural hedge. The Italian government's 30.2% stake signals stability, with institutional holders like Orbis Investment Management at 1.712% adding credibility.

Strategic US Exposure Through Leonardo DRS and Holdings

Leonardo's 71.77% ownership in Leonardo DRS, Inc., a US-focused defense electronics firm, drives much of its American relevance. DRS specializes in electro-optical/infrared systems, network computing, and tactical communications, aligning with US military modernization priorities. This subsidiary lists separately in the US, providing Leonardo with direct access to Pentagon contracts and NATO-related opportunities.

Additional holdings include 22.8% in Hensoldt AG, a German sensor specialist, and 29.63% in Avio S.p.A., an Italian space launch provider. These assets diversify revenue streams into high-growth areas like advanced sensing and space systems. For US investors, DRS represents a bridge to familiar markets, where defense spending exceeds $800 billion annually, far outpacing Europe's combined budgets.

Recent merger activity, such as the 2022 integration of Leonardo DRS with Israel's Rada, expanded capabilities in electronic warfare and surveillance. This bolsters Leonardo's competitiveness in joint US-European programs, including F-35 supply chains and future combat air systems.

Global Defense Budget Trends Fueling Interest

European nations, including Italy, have committed to 2% GDP defense spending under NATO pledges, driving demand for Leonardo's products. Helicopters and defence systems benefit from rearmament efforts post-Ukraine conflict. The US, as the largest buyer, influences this through alliance interoperability requirements.

Leonardo's involvement in multinational projects like the Global Combat Air Programme (GCAP), partnering with UK and Japan, positions it for long-term contracts. GCAP aims to develop sixth-generation fighters, with Leonardo contributing avionics and sensors. US investors should note potential technology transfers and export opportunities to Indo-Pacific allies.

Cybersecurity, at 3.3% of business, grows amid rising threats, with Leonardo's solutions integrated into US and European networks. Space systems, though smaller at 5%, tap into satellite constellations for defense communications.

Operational Scale and Production Capabilities

With 61,265 employees, Leonardo scales production across helicopters like the AW169 and AW139, used by US Coast Guard and special forces. Defence electronics include OTO 76/127 naval guns and Kronos radars, exported widely. Aerostructures support commercial aviation, providing cyclical balance to defense volatility.

Group companies like Telespazio SpA handle satellite operations, vital for US GPS alternatives and secure comms. Leonardo UK Ltd. focuses on radar and electronic warfare, complementing US subsidiaries. This global network mitigates supply chain risks seen in pure domestic players.

US investors value this execution history, as Leonardo delivers on backlogs without major delays, unlike some peers facing labor shortages.

Why US Investors Should Monitor Leonardo Stock Now

Leonardo offers US portfolios exposure to European defense upside with 23.2% direct US sales and DRS leverage. Unlike US giants like Lockheed Martin, it benefits from cheaper European labor and currency tailwinds against the euro. Italian government backing ensures priority in national programs, spilling over to exports.

Amid US election cycles and budget debates, Leonardo's NATO-aligned products fit supplemental appropriations. Its Israel partnerships enhance tech edge in drones and AI-driven systems. For yield-seeking investors, the stock's dividend history and buyback potential add appeal, though exact figures require current verification.

Compared to US peers, Leonardo trades at potentially attractive valuations given growth in helicopters and electronics, making it a diversification pick.

Risks and Open Questions for Investors

Geopolitical risks loom, including Middle East tensions affecting supply chains. Execution delays in complex programs like GCAP could pressure margins. Currency fluctuations, with euro exposure, impact reported earnings for USD-based investors.

Competition from US firms in joint bids and regulatory hurdles for exports pose challenges. Dependence on government contracts introduces budget risk, especially in austerity scenarios. Cybersecurity threats target defense firms, requiring constant investment.

Shareholder concentration, with Italy at 30.2%, may limit agility. Investors must watch order intake and backlog conversion for sustained growth. Overall, while positioned well, prudence dictates monitoring quarterly updates.

Disclaimer: This is not investment advice. Stocks are volatile financial instruments.