Company Overview
RTX Corporation has become one of 2025’s most compelling defense success stories, with shares surging 47% year-to-date to around $171, trading within striking distance of its all-time high of $181. The momentum accelerated dramatically in the past two weeks as the company announced a flurry of major contract wins that underscore its critical role in both U.S. and allied defense capabilities.
On December 2nd, RTX’s Pratt & Whitney division won a $1.6 billion contract for F-35 engine sustainment—high-margin, recurring work tied to a fleet that will remain operational for decades. Just before that, on November 21st, the company’s Raytheon-Rafael Protection Systems joint venture secured a $1.25 billion deal to supply Tamir surface-to-air missiles for Israel’s Iron Dome system, opening a new $33 million production facility in Arkansas. Then on December 4th, RTX announced a strategic collaboration with Amazon Web Services to transform satellite data processing using AI and cloud technologies. WallStreetZen upgraded RTX to “Strong Buy” on December 8th, awarding it an “A” grade that places it in the top 5% of all tracked equities.
Key Technical and Fundamental Drivers
Fresh “Strong Buy” → December 8th Upgrade WallStreetZen upgraded RTX to “Strong Buy” two days ago with an “A” grade (top 5% of all equities), citing the AWS cloud partnership and strong contract momentum as key catalysts driving the upgrade.
$1.6B F-35 Contract → December 2nd Award The latest F-35 engine sustainment contract announced last week provides multi-year revenue visibility for high-margin maintenance work on the world’s most advanced fighter jet, with much of the work done at Connecticut facilities.
$1.25B Iron Dome Deal → New Arkansas Facility The November 21st Tamir missile contract for Israel’s Iron Dome (95%+ intercept success rate) includes opening the first U.S. all-up-round production facility for these missiles, also serving the Marine Corps’ SkyHunter program.
AWS Space Partnership → December 4th Announcement The strategic collaboration with Amazon Web Services to deploy AI/ML technologies for satellite data processing positions RTX to capture higher-value, cloud-enabled defense contracts in space domain awareness and mission control.
$251 Billion Backlog → Multi-Year Visibility RTX’s record $251 billion backlog split between commercial and defense provides unprecedented revenue visibility, with Q3 2025 showing 12% revenue growth to $22.5 billion and adjusted EPS up 17% to $1.70.
Market Takeaway
RTX represents the quintessential defense contractor benefiting from elevated global tensions and increased allied defense spending. The convergence of three major catalysts in the past two weeks—the F-35 sustainment contract, Iron Dome production deal, and AWS space partnership—demonstrates the breadth of RTX’s portfolio across commercial aerospace (Collins Aerospace), military engines (Pratt & Whitney), and advanced defense systems (Raytheon).
The investment thesis centers on recurring, high-margin revenue streams. F-35 engine sustainment isn’t a one-time sale; it’s decades of ongoing maintenance work as the global F-35 fleet expands (the U.S. and allies plan to operate over 3,000 aircraft). Similarly, the Iron Dome’s 95%+ intercept success rate makes it the gold standard in short-range missile defense, ensuring continued international demand as geopolitical threats persist. The Arkansas facility producing both Iron Dome (Tamir) and Marine Corps SkyHunter missiles creates a domestic production hub that insulates RTX from foreign supply chain risks.
The AWS partnership adds a compelling new dimension. By integrating cloud computing, AI, and machine learning into satellite operations and space domain awareness, RTX positions itself for the next generation of defense contracts where software and data analytics command premium margins. This aligns with broader Pentagon priorities around Joint All-Domain Command and Control (JADC2) and digital transformation of military systems.
Morgan Stanley has RTX as its top aerospace pick with a $215 price target (25% upside from current levels), while the consensus among 13 analysts sits at “Buy” with an average target around $181. The valuation at mid-30s P/E reflects the quality premium investors place on RTX’s diversified revenue mix, $251 billion backlog, and consistent execution. Q3’s free cash flow of $4.0 billion (more than double year-over-year) and the company’s 2.3% dividend yield provide downside support while the defense spending cycle continues.
Risk factors include potential engine remediation costs on certain Pratt & Whitney models, concentration risk around a handful of major programs (F-35, Patriot, Iron Dome), and valuation sensitivity after the 47% YTD run. However, with the One Big Beautiful Bill Act injecting $156.2 billion in additional defense funding beyond the regular $849 billion annual budget, and allies from NATO to Asia-Pacific increasing their defense spending, RTX’s pipeline appears robust well into 2026 and beyond.