We came across a bullish thesis on RTX Corporation (NYSE:RTX) on Substack by Stock Picker’s Corner. In this article, we will summarize the bulls’ thesis on RTX. RTX Corporation (NYSE:RTX)’s share was trading at $115.87 as of Jan 3rd. RTX’s trailing and forward P/E were 33.39 and 19.30 respectively according to Yahoo Finance.
RTX Corp., formerly Raytheon, is emerging as a key beneficiary in the escalating U.S.-China tensions, particularly within defense technology. As global security risks evolve, including the rise of drones and hypersonic weapons, RTX’s advanced defense systems are becoming increasingly crucial. One of the company’s standout innovations is its “X-Band” radar, which is among the most advanced systems for detecting and tracking airborne threats. This technology is particularly important as the world grapples with the growing concern of unmanned aerial vehicles (UAVs). RTX’s radar plays a vital role in defending against these threats, which are a rising challenge in both military and civilian contexts. Additionally, RTX is pioneering the development of directed-energy weapons (DEWs), such as high-powered microwave systems and lasers, designed to neutralize drones and other airborne targets. These systems have already demonstrated real-world effectiveness, including successfully shooting down drones in the Strait of Hormuz. As drone threats continue to escalate, RTX’s radar and DEW solutions are set to play an even more significant role in countering these risks.
In addition to its drone defense capabilities, RTX is making significant strides in the development of hypersonic weapons, which travel at speeds five to 25 times the speed of sound. These weapons, including hypersonic glide vehicles (HGVs), are capable of evading traditional missile defense systems due to their ability to maneuver unpredictably. This presents a growing challenge for air defense systems worldwide. While the U.S. once led in hypersonic technology, China and Russia have made substantial advancements in this area. China’s DF-21 anti-ship missile and Russia’s Mach 10 Kinzhal missile are both formidable examples of this new threat. In response, the development of advanced missile interceptors and defense technologies has become critical. RTX is deeply involved in this effort, alongside companies like Lockheed Martin, to develop next-generation missile-defense solutions. These new systems will rely heavily on advanced sensors and radar, with RTX’s X-Band radar system playing a crucial role in providing the early warning needed to defend against hypersonic threats. As the need for sophisticated defense systems grows in the face of evolving threats, RTX is well-positioned to benefit, offering substantial growth potential in the coming years.
RTX Corporation (NYSE:RTX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held RTX at the end of the third quarter which was 54 in the previous quarter. While we acknowledge the risk and potential of RTX as an investment, our conviction lies in the belief that some 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 RTX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.