Raytheon Technologies (RTX): A Strategic Play in the Booming Electronic Warfare Sector

The global defense landscape is undergoing a paradigm shift, with electronic warfare (EW) emerging as the new frontier of military preparedness. As adversaries invest in advanced radar systems, hypersonic missiles, and integrated air defense networks, nations are prioritizing technologies that dominate the electromagnetic spectrum. Raytheon Technologies (RTX) stands at the epicenter of this transformation, and its recent $580 million contract for the Next Generation Jammer Mid-Band (NGJ-MB) underscores its position as the premier provider of next-gen EW solutions. This deal is not just a win for RTX—it’s a harbinger of sustained demand for systems that neutralize evolving threats and solidify RTX’s role as a critical beneficiary of defense modernization spending.

The Strategic Imperative of Electronic Warfare

Modern warfare is increasingly defined by control of the electromagnetic spectrum. Electronic attack (EA) systems like the NGJ-MB enable forces to disrupt enemy communications, blind radar networks, and degrade weapon guidance systems—critical advantages in contested environments. With nations like China and Russia advancing anti-access/area denial (A2/AD) systems and hypersonic glide vehicles, EW is no longer a niche capability but a strategic necessity. The Pentagon’s 2023-2027 budget plans allocate over $13 billion to EW programs, while NATO allies and partners like Australia are accelerating their investments. RTX’s NGJ-MB contract—awarded amid this surge—positions it to capture a significant share of this growing market.

The NGJ-MB: A Technical Masterstroke with Global Reach

The NGJ-MB is a game-changer in airborne electronic attack. Its dual-pod design,搭载 advanced active electronically scanned array (AESA) technology operating in the mid-band frequency range (2–6 GHz), allows simultaneous engagement of multiple targets at extended ranges. This system is purpose-built to counter advanced threats, including radar-guided missiles, data links, and non-traditional RF systems. The May 2025 contract expands production for both the U.S. Navy’s EA-18G Growler fleet and the Royal Australian Air Force (RAAF), underscoring its utility in multi-domain operations.

The contract’s scope extends beyond hardware. RTX is also delivering spares, support equipment, and software upgrades, creating recurring revenue streams that insulate margins against volatility. The inclusion of the RAAF reflects RTX’s ability to leverage international partnerships—a key growth lever as allies seek interoperable systems to counter shared threats. With Australia’s recent $180 billion defense modernization plan, this contract is a down payment on decades of sustained demand.

Why RTX Is a Defensive Tech Play with Durable Growth

1. Technological Dominance: RTX’s EW portfolio—spanning the NGJ-MB, the Advanced Threat Infrared Countermeasures (ATIRCM), and the AN/ALQ-248 system—establishes it as the go-to supplier for spectrum dominance solutions. Its AESA and frequency-agile designs outpace legacy systems, making them irreplaceable in high-threat scenarios.
2. Recurring Revenue & Margin Stability: EW systems require continuous upgrades, spares, and software updates, ensuring predictable cash flows. The NGJ-MB’s 2024 contract for Extended Capability upgrades (broadening frequency coverage) exemplifies this model, with margins shielded by low competition in this specialized space.
3. Allied Synergy: The RAAF’s inclusion in the NGJ-MB program signals broader opportunities. Australia’s need for Growler modernization aligns with RTX’s production timelines, and such partnerships could replicate in markets like Japan, South Korea, and NATO members.
4. Hypersonic Defense Integration: As hypersonic threats proliferate, electronic warfare is a cost-effective countermeasure compared to interceptors. The NGJ-MB’s ability to jam guidance systems and disrupt command networks positions RTX to capitalize on this trend.

A Bullish Investment Thesis

RTX is not just a defense contractor—it’s a technology leader in a sector that’s becoming mission-critical. The NGJ-MB contract, valued at $580 million, is part of a $3 billion+ multiyear production pipeline, with further orders expected as the program transitions to full-rate production by 2026. With geopolitical tensions driving defense spending and no credible competitors in advanced EW systems, RTX’s moat is widening.

Investors should note that RTX’s valuation remains reasonable relative to its growth trajectory. At current prices, RTX trades at 13.5x forward earnings, below its five-year average and far below the multiples afforded to software-driven tech firms. Meanwhile, its dividend yield of 2.4% adds further stability.

Final Call: Buy RTX for Defensive Tech Exposure

The NGJ-MB contract is more than a procurement deal—it’s a strategic bet on the future of warfare. RTX’s leadership in EW, coupled with recurring revenue models and global partnerships, makes it a must-own stock for investors seeking exposure to defense modernization. With electronic warfare budgets set to grow and no substitutes for its technology, RTX is poised to deliver outsized returns in an era of escalating global threats.

Act now: Allocate to RTX to secure a stake in the electromagnetic spectrum’s next battleground.