Goldman Sachs Defense Stocks: Top 12 Stock Picks

2. RTX Corporation (NYSE:RTX)

Stake Value as of Q4 2024: $646,676,123

RTX Corporation (NYSE:RTX) is a giant in the global aerospace and defense industry, providing systems and services to commercial, military, and government clients. The company operates through three main businesses: Collins Aerospace, Pratt & Whitney, and Raytheon.

Regular high-value contract awards have made the stock an attractive pick for investors. It is among the top defense stocks from the Goldman Sachs portfolio. Hedge fund sentiment also remains strong. According to Insider Monkey’s database for Q4 2024, 80 hedge funds held a stake in RTX Corporation (NYSE:RTX), up from 72 at the end of Q3.

On March 24, RTX Corporation (NYSE:RTX)’s Raytheon business was awarded a follow-on order from the US Army to continue utilizing its RCADE modeling and simulation capability. During an initial contract, the company developed multi-domain conflict theatre scenarios to test concepts of operations. Under the latest award, RTX will build a continuous experimentation environment to enable Battle Labs and concept developers to inform strategic force design decisions.

In January, RTX Corporation (NYSE:RTX) was awarded a $946 million contract to provide additional Patriot air and missile defense systems to Romania, inclusive of radars, missiles, and control stations. Last year, the company also clinched two contracts from the US Navy valued at over $1.3 billion for the AIM-9X SIDEWINDER missiles and the Next Generation Jammer Mid-Band (NGJ-MB) system.

Longleaf Partners Fund stated the following regarding RTX Corporation (NYSE:RTX) in its Q1 2025 investor letter:

“RTX Corporation (NYSE:RTX) – Aerospace and defense company RTX was a contributor this quarter. We purchased RTX at a significant discount in 2023 when concerns over Pratt & Whitney’s Geared Turbofan (GTF) issues reached what turned out to be a point of max pessimism. We also were able to partner with great leaders in Greg Hayes & Chris Calio, who took advantage of this opportunity to repurchase a material amount of stock while improving operations. Just last quarter, we wrote how strong industry tailwinds, prudent capital allocation and a solid balance sheet provide a foundation for sustained growth and eventual full value recognition. That thesis played out this quarter, as the stock price traded through our value, and we exited our position at a gain.”

Wall Street analysts also maintain a positive outlook for RTX Corporation (NYSE:RTX) with a consensus Buy rating and an average share price upside potential of 12.5%.