Could Investing $5,000 in Redwire Stock Make You a Millionaire?

Like many stocks that went public by merging with a special purpose acquisition company, Redwire Corporation (NYSE: RDW) hasn't been a particularly fun ride for early investors. Shares are down roughly 21% over the last five years after brief spikes of optimism eventually faded.

That said, past performance doesn't equal future performance. And Redwire's relatively small size could make it a compelling alternative to larger space and defense-related companies. Let's dig deeper to see if a $5,000 investment made right now has millionaire-maker potential.

Why Redwire?

In 2020, the private equity firm AE Industrial Partners combined two of its holdings (Adcole Space and Deep Space Systems) to create a new entity called Redwire to focus on the burgeoning space industry. Redwire was able to hit the ground running because of its strong relationship with government clients like NASA, to which it supplies power systems, optics, and other types of advanced hardware.

Redwire's technology has featured in high-profile missions; the company supplied solar arrays to the International Space Station and imaging and navigation systems to Artemis 2, which recently made a crewed flyby of the moon.

Redwire's work with NASA speaks to the quality of its hardware, which represents an economic moat. And over the long haul, investors should expect these missions to be a consistent source of revenue -- especially as the U.S. government shows a growing willingness to contract low-orbit-related space work to the private sector.

Business is booming

Redwire's second-quarter earnings demonstrate impressive business momentum. Revenue jumped roughly 89% year over year to a record of $117.1 million, and huge demand has led to a backlog worth $542.1 million. Perhaps surprisingly, however, very little of this expansion is coming from the company's legacy space industrial business. Instead, Redwire is quickly becoming a next-generation defense contractor.

The wars in Ukraine and the Middle East have exposed the limitations of traditional military platforms like aircraft carriers, ballistic missiles, and interceptors -- the last of which often cost far more than the projectiles they are being used to destroy.

In response, governments around the world are investing heavily in military modernization, with a huge focus on next-generation combat technology like drones and space-based systems.

Image source: Getty Images.

Redwire has responded to the megatrend with the 2025 acquisition of Edge Autonomy, a company that specializes in uncrewed aerial systems (UASes) and surveillance technology. This deal has some synergies with Redwire's existing space optics business. More importantly, the deal gives the company a massive new growth driver selling these systems to defense clients. This month, Redwire delivered $13.8 million worth of its Stalker UAS system to the U.S. National Guard for operator training.

In total, Redwire's defense tech segment surged more than tenfold to $61.9 million. And investors should expect this business to represent the lion's share of the company's growth and value creation going forward.

Is Redwire a millionaire-maker stock?

Right now, Redwire seems to have most of the ingredients to be a millionaire maker over the long term. It serves a large and disruptive opportunity in military modernization, and its high-profile clients suggest it has already established a strong relationship with the government. That said, the best news may be the bottom line.

While Redwire is still far from sustainable profitability, things are moving in the right direction. Second-quarter gross margins have soared from negative 30.9% to 27.8%. And this has helped to narrow operating losses from a blistering $91.9 million in the second quarter of 2025 to $22.1 million this time around. While it remains to be seen whether this trend can be maintained (acquisitions often lead to a temporary bump in operating performance), Redwire investors have a lot to be optimistic about.

Turning $5,000 into a million is a tall order for any company. But Redwire may be more likely to pull it off than the average stock.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.