We recently published a list of Goldman Sachs Defense Stocks: Top 12 Stock Picks. In this article, we will take a look at where RTX Corporation (NYSE:RTX) stands against other top defense stock picks from the Goldman Sachs Portfolio.
After a subdued start to the year, American defense stocks are beginning to see improved returns. Investors are buoyed by President Trump’s plans for a $1 trillion defense budget for fiscal 2026, adding to the momentum from last month’s unveiling of the F-47 and announcement to resurrect the country’s shipbuilding industry.
The sector has received another boost after market chatter that tariff negotiations to address trade imbalances could include commitments from foreign countries to buy weapons from the US. In a statement released on April 8, Vietnam’s prime minister asked for a 45-day delay in the imposition of tariffs and stated his country would buy more American goods, including weapons, to tackle the trade gap.
On April 11, Goldman analyst Noah Poponak adjusted his ratings and price targets for defense stocks, and the most notable adjustment was a prominent Navy shipbuilder receiving a double upgrade on the back of an executive order signed by Trump to revitalize the sector. Poponak expects the stock to benefit, with shipbuilding expected to be a high priority within the defense budget.
The firm is known for its expertise in stock recommendations, helping investors identify high-potential companies. GS boasts a vast network of analysts, covers a wide range of stocks. It also has a research team led by analysts and economists from around the world, offering insights on the economy and the broader market.
In a report released in March this year, Goldman Sachs Research projected a significant increase in defense spending by EU member nations. Military expenditure in the euro area accounted for 1.8% of the GDP in 2024, and is projected to rise to 2.4% by 2027. The firm’s analysts estimate the increased spending to positively impact GDP growth, with every €100 spent on defense to boost GDP by approximately €50.
Defense stocks have rallied in Europe this year, as regional capitals unlocked billions to supercharge their militaries. While recent tariffs have sparked a major plunge in shares over the past couple of weeks, this has been a year to remember for several European defense contractors, with significant returns so far in 2025.
With that said, let’s head over to the list of the top defense picks from the Goldman Sachs stock portfolio.
RTX Corporation (RTX): One of the Top Defense Stock Picks from the Goldman Sachs Portfolio
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Methodology
For this article, we scanned Goldman Sachs’ 13F portfolio as of December 31, 2024. From there, we picked the top 12 defense stocks according to their stake value and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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%.
Overall, RTX ranks 2nd among the Goldman Sachs Defense Stocks: Top 12 Stock Picks. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
