Rising geopolitical tensions have investors interested in defense stocks.
The iShares US Aerospace & Defense ETF (BATS:ITA) has gained 5.43% YTD and the Invesco Aerospace & Defense ETF (NYSE:PPA) is up 2.20% YTD.
As NATO ramps up spending and global conflicts remain unresolved, companies in the defense sector are seeing strong demand.
In an exclusive interview with Benzinga, Violeta Todorova, Senior Research Analyst at Leverage Shares, said she sees this trend continuing. She highlighted RTX Corp (NYSE:RTX) as a standout pick. “RTX is our preferred pick in the sector, and we see levels to $170 as achievable before year-end,” she states.
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Why RTX Stands Out
RTX has solidified its leadership in missile defense and aerospace, benefiting from increased government spending on advanced military technology. Todorova notes that while European defense contractors are seeing the biggest gains as the region boosts domestic defense production, U.S. firms like RTX remain well-positioned to capitalize on sustained demand.
Its strong backlog and exposure to critical defense programs support long-term growth, and with continued geopolitical uncertainty, the company remains a key player. She sees further upside for RTX stock, with $170 as a potential target by year-end.
Other Beneficiaries Of The Defense Spending Boom
It’s not just RTX benefiting from the global shift toward defense, “several defense stocks could benefit from Trump’s shift towards NATO,” she said. Lockheed Martin Corp (NYSE:LMT), General Dynamics Corp (NYSE:GD), L3Harris Technologies Inc (NYSE:LHX) and Northrop Grumman Corp (NYSE:NOC) are also enjoying a strong tailwind.
NATO’s commitment to increased defense budgets means the sector could be in for a multi-year uptrend.
Long-Term Play Or Short-Term Trade?
For investors looking beyond traditional tech plays, the defense sector presents a compelling case. With national security taking priority and military modernization efforts ramping up, Todorova believes defense stocks are no longer just cyclical—they are becoming a core holding for many investors.
If RTX does indeed hit $170 by year-end, it will only reinforce that shift.
RTX Price Action: RTX stock closed the trading day, Monday, at $132.05 a share, up 1.58%.
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