RTX Corporation: A High-Quality Industrial Play in Aerospace, Defense, and Energy Innovation

In a post-pandemic world marked by geopolitical volatility and rapid technological advancement, industrial conglomerates with diversified, high-margin businesses are increasingly attractive to investors. RTX Corporation (RTX), the aerospace and defense giant formed by the merger of Raytheon and United Technologies, has emerged as a standout performer. Over the past five years, RTX has consistently outpaced the S&P 500, delivering robust returns driven by strong fundamentals, strategic innovation, and indirect exposure to AI and energy infrastructure growth.

Outperformance Against the S&P 500: A Testament to Resilience

Data from Yahoo Finance and AlphaSpread reveals that RTX has significantly outperformed the S&P 500 since the post-pandemic recovery period (2020–2025). Over the past 12 months, RTX shares surged by 43.6%, compared to the S&P 500's 13.1% return. Year-to-date (YTD) gains further underscore this trend, with RTX rising 49.7% versus the S&P 500's 15.8%. Even in the last three months, RTX gained 8.5%, outpacing the index's 5.4% according to financial reports. This outperformance reflects RTX's ability to capitalize on its dominant market position in aerospace and defense, sectors that have thrived amid global instability and heightened demand for advanced technologies.

Strong Fundamentals: Sustained Growth and Margin Expansion

RTX's Q3 2025 results, reported on October 21, 2025, highlight its financial strength. The company generated $22.5 billion in sales, a 12% year-over-year increase, with adjusted earnings per share rising 17% to $1.70. These figures exceeded expectations, driven by robust demand across all segments:
- Collins Aerospace reported 8% sales growth, fueled by commercial and defense programs.
- Pratt & Whitney saw a 16% sales increase, driven by commercial and military propulsion systems.
- Raytheon grew sales by 10%, attributed to demand for land and air defense systems.

RTX also raised its full-year 2025 adjusted sales outlook to $86.5–$87.0 billion and reaffirmed a free cash flow target of $7.0–$7.5 billion according to earnings reports. The company's Q1 2025 results further reinforced its momentum, with sales of $20.3 billion and $1.47 in adjusted EPS, surpassing forecasts by 8.9%. CEO Chris Calio emphasized RTX's commitment to U.S. manufacturing, allocating $2 billion in 2025 to expand critical production capacity.

Strategic Positioning in AI and Energy Innovation

While RTX does not explicitly position itself as an AI or energy infrastructure company, its operations are indirectly aligned with these megatrends. For instance:
- AI in Defense: RTX partnered with Shield AI to integrate autonomous and AI-driven capabilities into defense products, including loitering munitions and sensors. This collaboration enhances the autonomy and effectiveness of U.S. and allied forces, aligning with the Department of Defense's push for AI-enabled warfare.
- Energy Efficiency in Aviation: Pratt & Whitney Canada leads the EU's Clean Aviation PHARES project, focusing on hybrid-electric propulsion for regional aircraft. This initiative aims to achieve 20% fuel efficiency improvements and underscores RTX's commitment to decarbonization.
- Advanced Manufacturing: RTX is investing $600 million in 2025 to expand manufacturing capacity, including next-generation auxiliary power units developed in partnership with PBS Group. These projects reduce form factor and weight while enhancing performance, catering to both commercial and military markets.

These initiatives reflect RTX's ability to leverage AI and energy innovation to strengthen its core businesses, even as it maintains a focus on aerospace and defense.

Geopolitical Tailwinds and Long-Term Catalysts

RTX's strategic positioning is further bolstered by geopolitical tailwinds. The global demand for defense systems has surged due to conflicts in Europe and the Indo-Pacific, with RTX securing $37 billion in new awards during Q3 2025. Additionally, the U.S. government's emphasis on reshoring critical manufacturing and reducing reliance on foreign supply chains benefits RTX's domestic production capabilities.

Conclusion: A High-Quality Industrial Play

RTX Corporation's outperformance against the S&P 500, coupled with its strong fundamentals and strategic alignment with AI and energy innovation, positions it as a compelling long-term investment. As global tensions persist and technological advancements reshape industries, RTX's diversified portfolio and innovation-driven approach offer a unique combination of stability and growth potential. For investors seeking exposure to the industrial sector's next phase of evolution, RTX represents a high-conviction opportunity.