1. L3Harris Technologies Inc. (NYSE:LHX)
Latest Valuation/Funding Estimate: $37.50 billion market capitalization
Number of Hedge Fund Holders: 40
L3Harris Technologies Inc. (NYSE:LHX) is a leading defense contractor and aerospace technology company with a strong presence in satellite communications, electronic warfare, and space-based intelligence. The company plays a crucial role in the VLEO sector through its advanced satellite solutions designed for military, intelligence, and commercial applications. As governments and private entities increasingly rely on VLEO satellites for real-time surveillance, reconnaissance, and secure communications, LHX stands to benefit from growing demand in this specialized space domain. The US-based company ranked fifth on a recent list of 10 Best Space Stocks To Buy According To Analysts.
From an investment standpoint, L3Harris Technologies Inc. (NYSE:LHX) is an attractive play on both the VLEO trend and broader defense sector growth. One of the company’s key advantages in the VLEO market is its expertise in compact, resilient satellite technology. LHX has been developing next-generation small satellites optimized for VLEO operations, providing high-resolution imaging, rapid data transmission, and enhanced situational awareness. Unlike traditional geostationary satellites, VLEO satellites operate at much lower altitudes, offering superior image clarity and reduced signal latency, which is particularly valuable for defense and intelligence agencies. The company benefits from long-term government contracts, steady cash flows, and a commitment to innovation, making it a relatively stable option in the aerospace and defense industry. Furthermore, as geopolitical tensions drive increased military spending on space-based assets, the company is well-positioned to capture a significant share of this expanding market. With its strong track record, robust financials, and leadership in high-tech satellite solutions, LHX represents a compelling investment opportunity for those seeking exposure to the rapidly evolving VLEO and defense technology landscape.
In the fourth quarter of 2024, L3Harris Technologies Inc. (NYSE:LHX) delivered on its 2024 commitments by executing its Trusted Disruptor strategy and making progress towards its 2026 framework, ending the year with a record backlog. LHX achieved revenue of $21.3 billion, up 10% and 4% organically, with a segment operating margin of 15.4%. For 2025, management expects organic growth of 4% at the midpoint, with segment operating margin anticipated to be mid-to-high 15%. The company exceeded its gross cost savings target by 2x, reaching $800 million in 2024, and now expects to achieve $1.2 billion in cumulative cost savings by the end of 2025, exceeding its $1 billion commitment from a year ago. Looking ahead to 2026, LHX has updated its financial framework, increasing segment operating margins to a low 16% while targeting $23 billion in sales and $2.8 billion in cash, representing a double-digit CAGR – the optimistic long-term guidance represents a strong signal that long-term tailwinds, including from exposure to VLEO, are starting to play out.
Overall L3Harris Technologies Inc. (NYSE:LHX) ranks first on our list of the best VLEO technology stocks and startups to watch in 2025. While we acknowledge the potential of LHX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LHX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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