RTX Corporation (RTX): A Top Pick for Military Drone Stocks in 2023

We recently released a compilation of the 10 Top Military Drone Stocks to Invest in Currently In this piece, we'll examine how RTX Corporation (NYSE:RTX) measures up against some of the top contenders in the drone industry.

Contemporary warfare is swiftly transforming beyond just involving troops, armored vehicles, and combat aircraft. Large formations of unmanned aerial vehicles (UAVs), controlled by artificial intelligence, now dominate the airspace and can hit adversary objectives precisely. This shift in war tactics has merged human roles with technological ones, leading to an urgent requirement to reconsider military strengths and capacities.

READ ALSO: 10 Nations Leading in Global Military Drone Ownership and Goldman Sachs' Recommended Defense Stocks: Leading 12 Picks .

In recent years, there has been a significant increase in the demand for drones as various nations extensively utilize unmanned aerial vehicles (UAVs) for gathering intelligence, conducting reconnaissance missions, performing surveillance activities, and executing targeted operations. These airborne systems provide an overhead perspective of combat areas, complicating movement and concealment efforts within these zones for those involved.

In the 2020 conflict over the Nagorno-Karabakh region involving Azerbaijan and Armenia, drones emerged as a significant element. These unmanned aircraft have also loomed over numerous towns and cities during the ongoing Russia-Ukraine war, marking what analysts view as an introduction of a novel challenge in air defense strategies.

For nearly a hundred years, the U.S. has utilized unmanned aerial vehicles (UAVs), starting with their deployment during World War II and most recently seeing action in conflicts such as those in Afghanistan and Iraq. In 2023, the Department of Defense introduced Replicator, aimed at producing large numbers of 'attritable autonomous systems' within the following one-and-a-half to two-year period. Additionally, the Air Force is working on drone escorts designed to accompany both fighter planes and bombers through the Collaborative Combat Aircraft (CCA) project. Two initial prototypes of these collaborative combat aircraft made their debut earlier this year in March.

Nevertheless, specialists in military defense see the increasing availability of drones as a significant security risk, particularly because U.S. forces are facing more attacks from non-governmental groups in the Middle East. Additionally, officials in Washington are concerned that China might take inspiration from Russia’s playbook (the Ukraine conflict) and initiate comparable assaults on American assets in the Asia-Pacific region.

A significant amount of effort is being directed towards protecting nations from the dangers presented by unmanned aerial vehicles (UAVs). In October 2024, the Department of Defense (DoD) granted a $250 million deal to Anduril Industries for developing systems to defend against drone assaults targeting U.S. military personnel. As part of this agreement, the country will be supplied with 500 reclaimable Roadrunner interceptors—drones designed to capture approaching enemy drones or safely return to base if they do not engage their targets.

Given this introduction, let’s move on to the list of top drone stocks worth investing in.

A financial advisor examining a collection of bonds and equities.

Methodology

We took samples from ETFs that have investments linked to military drones, along with data from our earlier pieces on this topic. This group encompassed both companies solely focused on manufacturing military drones and larger defense firms involved in drone projects. Next, out of these selections, we chose the top 10 stocks which attracted the most hedge fund interest, according to Insider Monkey’s extensive record of more than 1,000 major hedge funds for the fourth quarter of 2024.

Why do we focus on the stocks that hedge funds accumulate? It's straightforward: our analysis indicates that mimicking the leading stock choices from premier hedge funds allows us to surpass market performance. Each quarter, our monthly bulletin features 14 small-cap and large-cap equities selected through this approach, which has yielded a return of 373.4% starting from May 2014, exceeding its reference index by 218 percentage points. see more details here ).

RTX Corporation (NYSE: RTX )

Number of Hedge Fund Owners: 80

RTX Corporation (NYSE:RTX), a leader in the worldwide aerospace and defense sector, offers various systems and services for commercial, military, and governmental customers. The company functions through three primary segments: Collins Aerospace, Pratt & Whitney, and Raytheon.

The firm carries significant weight in the UAV sector thanks to its emphasis on drone-launched missiles and anti-drone solutions. RTX Corporation (NYSE:RTX), with its proficiency in radar technology, sensor systems, and electronic warfare products, stands out as a key figure in the worldwide drone industry.

This week’s media coverage revealed that RTX Corporation (NYSE:RTX), through its Raytheon division, has entered into a strategic partnership with the Tawazon Council of the UAE—the nation’s governing body for defense and security procurements—to manufacture the Coyote anti-drone system within the Middle East region.

The Coyote effector is an affordable, rail-fired missile designed with a booster rocket motor and a rapid-speed jet engine. These features allow it to neutralize various targets ranging from smaller to larger unmanned aircraft systems, including groups of different-sized drones. Each Coyote is equipped with Raytheon’s Ku-band Radio Frequency Sensor for enhanced detection and engagement abilities.

RTX Corporation (NYSE:RTX) has recently announced robust financial outcomes for the initial quarter of fiscal year 2025. The company posted revenues totaling $20.3 billion, marking a rise of 5% compared to the same period last year. Its adjusted earnings per share came out at $1.47, surpassing projections by 12 cents and showing an increase of 10% from the previous year’s figures.

After the announcement, UBS increased its price target for the stock to $138 from $133. According to Wall Street analysts, RTX Corporation (NYSE:RTX) has a consensus "Buy" rating, offering an average potential upside of 12.50% in share price, which makes it among the top choices for purchasing drone-related stocks.

Overall, RTX ranks 2nd Among the top 10 military drone stocks to consider right now, we recognize their potential. However, our confidence leans towards AI stocks as they offer better prospects for substantial gains over a shorter period. One particular AI stock has seen growth since early 2025, even though many leading AI stocks have dropped roughly 25% during the same timeframe. For investors seeking an AI stock with stronger upside compared to RTX yet trading below five times its earnings, review our detailed analysis available in our latest report. cheapest AI stock .

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Disclosure: There are no conflicts of interest. This article was initially published here. Insider Monkey .