Howmet's Superalloy Blades Now Serve Two Booms, Jet Engines and AI Power Plants, as Rivals Move In

Howmet heads into its October 29 Q3 print guiding $2.575B in revenue. Engine Products is running at 37.7% segment margins, and its gas turbine business is growing 38% on data-center power demand. GE Aerospace's $11.75B CPP deal and SpaceX's in-house blade ambitions have pushed the stock about 18.6% lower over 90 days, well below the $248 average price Howmet paid for $800M of its own shares this year.

HWM · Industrials · October 27, 2026

S&P 500 Position

Howmet sits in S&P 500 Aerospace & Defense alongside GE Aerospace, whose stock moves read through directly to HWM, as the October 20 sell-off showed. GE's $11.75B CPP acquisition gives it in-house casting capacity and turns a key industry buyer into a casting competitor. ATI is the closest listed specialty-materials comparable; Zacks ran a head-to-head comparison of the two on October 23. The defining competitive dynamic is that engine primes are vertically integrating at the same moment demand for aero spares and IGT blades is peaking.

Index Weight: Data unavailable | Rank: Data unavailable

Company Overview

Howmet is a precision-metallurgy company that sells into two of the tightest supply chains in industry: commercial aero engines and heavy-duty gas turbines. Engine Products produced 53.9% of Q2 2026 segment sales at a 37.7% adjusted EBITDA margin. The company says the segment can supply more than 90% of the structural and rotating components in an aero engine. These single-crystal and equiaxed superalloy castings sit in the hottest sections of the engine, and qualification cycles run for years. That is why the business carries software-like margins on a foundry cost base. The current story is the second demand curve. Gas turbine revenue hit $341M in Q2 2026, up 38% year over year. CEO John Plant told analysts Howmet holds more than 50% global share in industrial gas turbine blades. Management expects the roughly $1B gas turbine business to double in three to five years, driven by natural-gas generation for data centers. Its analyst day framed the U.S. data-center buildout as requiring more than 70 GW of new capacity. On the aero side, the Q2 2026 10-Q points to rising commercial and defense demand, including engine spares, which is the highest-margin, most annuity-like revenue in the stack. The competitive map is shifting. GE Aerospace agreed to buy casting supplier CPP for $11.75B, a vertical-integration move by one of the largest buyers of castings. SpaceX has said it will cast industrial gas-turbine blades and vanes in-house. Howmet's response is scale and process control. It closed the roughly $1.8B CAM fastener acquisition from Stanley Black & Decker in April 2026, and it runs an end-to-end Digital Thread across its casting operations. It also holds about 1,200 granted and pending patents covering the metallurgy and process know-how that new entrants must reproduce.

Products & Revenue

Revenue follows the heat and stress inside an engine. Engine Products builds airfoils and rotating parts for aero engines and industrial gas turbines. It is the profit engine: $1,373M in Q2 sales and $517M of segment EBITDA, more than half the company's segment EBITDA on 54% of sales. Fastening Systems is the second pillar. It grew 37% to $589M with CAM and Brunner folded in, at a 30.1% margin. Forged Wheels ($316M, 27.8% margin) is a high-return commercial-truck business with aluminum cost pass-through. Engineered Structures ($269M, 23.8% margin) is shrinking by design after the Savannah divestiture and product rationalization. By end market, the Q1 2026 10-Q shows aerospace at about 68% of revenue: 52.5% commercial and 15.8% defense. Commercial transportation contributed 15.0% and gas turbines 12.3%. In Q2, commercial aero grew 28% and gas turbines grew 38%.

Engine Products (54%): Investment-cast superalloy airfoils, rings, and rotating and structural components for aero engines and industrial gas turbines. Q2 2026 sales were $1,373M (+32% YoY) with a 37.7% segment adjusted EBITDA margin.

Fastening Systems (23%): Aerospace and industrial fasteners, expanded by the April 2026 CAM acquisition and the Brunner deal. Q2 2026 sales were $589M (+37% YoY) with a 30.1% margin.

Forged Wheels (12%): Forged aluminum wheels for commercial trucks, where lightweighting translates into payload and fuel efficiency. Q2 2026 sales were $316M (+14% YoY, helped by aluminum pass-through) with $88M of segment adjusted EBITDA.

Engineered Structures (11%): Titanium and aluminum airframe structural components and forgings. Q2 2026 sales were $269M (-13% YoY) after the Savannah divestiture and product rationalization, with $64M of segment adjusted EBITDA.

Segment shares are computed from Q2 2026 third-party sales ($2,547M segment sum) in Howmet's Q2 2026 results release (August 2026). End-market mix comes from the Q1 2026 Form 10-Q and the Q2 2026 earnings call. The Q2 call's defense aerospace figure ($218M) is not directly comparable to the Q1 10-Q end-market figure ($366M), so the two are not compared here.

Leadership

John C. Plant

CEO since 2021. Plant has served as Chairman and CEO since 2021 and is listed at age 72. Under his leadership Howmet has run a margin-first playbook: concentrating capital in high-return engine and fastener franchises, pruning Engineered Structures, and returning cash through buybacks and dividend increases. No succession plan has been announced, which matters for investors given his age.

Patrick Winterlich, Executive Vice President and Chief Financial Officer: He joined December 1, 2025, from Hexcel, where he was CFO, bringing direct composites and aerospace-materials experience. He now oversees the deleveraging plan after the CAM deal, from 1.4x net debt to EBITDA back toward about 1x by year-end.

Jonathan Arena, Executive Vice President, Chief Legal and Compliance Officer and Secretary: His hiring was announced April 13, 2026, filling the role Lola Lin vacated in September 2025. He takes over legal oversight during an active M&A cycle that includes CAM, Brunner, and the Savannah divestiture.

Ken Giacobbe, Former Executive Vice President and CFO (retired December 31, 2025): Giacobbe was the long-time finance chief through Howmet's post-separation margin expansion. His overlap with Winterlich in December 2025 provided a planned handoff of the capital-allocation framework.

The AI Angle

Selling AI power plants their hottest parts

Howmet's AI story starts in the foundry. Its February 2026 investor materials state that AI and digital manufacturing are enabled by an end-to-end Howmet Digital Thread. The March 2026 Technology & Markets Day deck shows how it works in practice. Cores, wax patterns, and finished castings are scanned at every operation, and the measurement stream feeds data analytics for variance prevention. Investment casting of single-crystal airfoils is a yield problem. A ceramic core shift of a fraction of a millimeter scraps a part after dozens of steps. Catching variance upstream lifts yield and quality and frees capacity without new furnaces. Howmet frames this as the lever that accelerates its ability to scale. Additive manufacturing is part of the same process stack. Howmet prints patterns that replace traditional wax patterns for investment casting. This removes tooling lead time for new geometries and speeds iteration on complex cooling passages. The company has run a 3D-printing metal powder facility near Pittsburgh since 2016. Its strategy is build, not buy: process data, pattern printing, and metallurgy all stay in-house, and the moat is the qualified process. Howmet has not disclosed external AI model partnerships or named AI research leaders (data unavailable). The larger AI exposure is demand-side. Hyperscaler power needs are pulling natural-gas generation forward. Howmet cites more than 70 GW of new U.S. data-center capacity, a growing share of it met by gas. Gas turbine revenue rose 38% to $341M in Q2 2026, and management expects the roughly $1B business to double in three to five years. With more than 50% global share in IGT blades, Howmet is a direct supplier to the AI power buildout. Its blades sit inside the turbines that run on-site and grid-connected data-center generation. The risk is that the same boom draws in well-capitalized vertical integrators. Elon Musk said SpaceX will make industrial gas-turbine blades and vanes in-house, and GE Aerospace is spending $11.75B to acquire casting supplier CPP. Both moves pressured HWM shares. Howmet's defense rests on its qualified process know-how, its patent portfolio, and data-driven yield gains that a new entrant cannot replicate quickly. The market is now pricing in some probability that the moat erodes.

Financial Snapshot

Revenue (TTM): $9.12B (TTM ended June 30, 2026) | Net Income: $1.87B (TTM net income)

Margins: Gross: data unavailable. Operating: data unavailable. Net: 20.5%. FY2026 guided adjusted EBITDA margin is about 32% ($3.23B on $10.05B). Q2 2026 segment adjusted EBITDA margins were 37.7% (Engine Products), 30.1% (Fastening Systems), 27.8% (Forged Wheels), and 23.8% (Engineered Structures).

Management raised full-year 2026 guidance after Q2 to $10.05B revenue, $3.23B adjusted EBITDA, and $5.27 EPS. Q3 guidance is $2,575M revenue, $830M EBITDA, and $1.35 EPS, against consensus of $2.59B and $1.37 ahead of the October 29 report. Capital allocation is aggressive on several fronts at once: - $1.8B for CAM - $800M of buybacks through July at an average of $248.29 per share, more than all of 2025, with $697M of authorization remaining - A 17% dividend increase to $0.14 per quarter - Repayment of a $186M yen term loan, cutting annual interest expense by about $12M With the stock now about 23% below that average buyback price, the remaining authorization buys meaningfully more shares.

1-Year Performance

$191.99. Our price feed shows -4.7% YoY. Treat that figure with caution: it matches the size of HWM's single-day drop on October 20, 2026. Simply Wall St reported the stock down 14.1% over 30 days and 18.6% over 90 days, with year-to-date returns still positive at the time of its report.

Fundamentals have not driven the sell-off. Q2 beat estimates and guidance went up. The pressure is a de-rating of a premium multiple, triggered by competitive headlines: SpaceX's plan to cast turbine blades and vanes in-house and GE Aerospace's $11.75B CPP acquisition. Read-through from GE's own weakness on October 20 added to it. Sell-side views are split. Goldman cut its target to $298 from $314 on October 12, while Morgan Stanley named HWM its top aerospace pick on October 21, replacing FTAI Aviation.

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