Defense Contractor RTX: Buy Zone Entry as Military Backlog and AI Demand Fuel Growth

The defense sector has long been a haven for investors seeking resilience amid macroeconomic volatility, and RTX Corporation (NYSE: RTX) is emerging as a standout player in this space. With a robust technical setup, a record-breaking backlog, and a strategic pivot toward AI-driven defense systems, the stock is positioned at a compelling entry point for growth-oriented investors.

Technical Buy Signals: A Confluence of Momentum and Volume

RTX's technical indicators paint a bullish picture. The stock price currently sits above its 5-day, 10-day, 20-day, 50-day, and 200-day moving averages, signaling upward momentum across multiple timeframes according to technical analysis. The Relative Strength Index (RSI) stands at 63.16, a level that suggests the stock is neither overbought nor oversold but trending toward a buy signal. Key support and resistance levels are also in play: the stock is trading near a critical support level at $178.67 and approaching resistance at $182.11, with analysts forecasting a potential price range of $180.15 to $183.87 for the next trading day. Crucially, volume has surged alongside the price increase, a positive sign that confirms the strength of the upward trend.

Fundamental Strength: Record Backlog and Strategic Contracts

RTX's fundamentals are equally compelling. The company reported Q3 2025 revenue of $22.5 billion, a 12% year-over-year increase, driven by both its aerospace and defense segments. Its total backlog now stands at $251 billion, with $103 billion attributed to defense programs-a testament to the enduring demand for its advanced systems. Notably, Raytheon, an RTX business, secured a $168.1 million contract to support the Patriot missile system and a $2.5 billion order for GEM-T missiles, underscoring its critical role in U.S. and global defense infrastructure.

The company's long-term financial narrative is equally robust. Analysts project RTX to generate $97.7 billion in revenue by 2028, requiring an average annual growth rate of 5.3% from its 2024 base of $80.74 billion. This growth is underpinned by a diversified portfolio and a focus on innovation, particularly in AI-integrated defense technologies.

AI-Driven Innovation: PhantomStrike and Next-Gen Defense Systems

RTX's integration of AI into its defense systems is a game-changer. The PhantomStrike radar, recently equipped on the U.S. Air Force's autonomous X-62A VISTA test aircraft, exemplifies this shift. This compact, air-cooled radar uses gallium nitride (GaN) technology, digital beam forming, and multimode functionality to deliver superior situational awareness at half the cost of traditional systems. PhantomStrike's affordability and adaptability have already attracted international clients, including Korea Aerospace Industries, which integrated it into its FA-50 light combat aircraft.

Meanwhile, the Patriot missile system is being upgraded with AI-enhanced features such as the Adaptive Multi-Mode Processing Suite (AMPS) and Spectral Fusion Algorithms, enabling dynamic threat adaptation and improved target discrimination. These innovations align with the U.S. military's push for autonomous systems and AI-driven air superiority, positioning RTX at the forefront of a $1.2 trillion global defense market.

Valuation and Outlook: A Compelling Case for Growth

RTX's valuation metrics further strengthen its appeal. The forward P/E multiple is projected to decline from 26.01x in 2025 to 17.99x by 2029, reflecting anticipated earnings growth and margin expansion. With a free cash flow of $4.0 billion in Q3 2025 and a $251 billion backlog, the company has ample capacity to fund R&D and return capital to shareholders. Analysts have raised their full-year 2025 sales guidance to $86.5–$87 billion, with organic growth expectations of 8–9%.

Conclusion: A Strategic Buy in a High-Growth Sector

RTX's confluence of technical strength, fundamental resilience, and AI-driven innovation makes it a compelling candidate for investors seeking exposure to the defense sector. With global defense spending projected to rise amid geopolitical tensions and technological advancements, RTX is well-positioned to capitalize on its leadership in next-generation systems. For those entering the stock at current levels, the combination of a favorable technical setup and a robust growth narrative offers a high-conviction opportunity.