RTX Shares Soar 5.91% on $438M Radar Contract, Defense Sector Optimism

The share price rose to its highest level so far this month, with an intraday gain of 5.91%.

RTX’s rally was driven by a $438 million contract awarded to its Collins Aerospace unit for next-generation surveillance radars, bolstering confidence in its defense and aerospace capabilities. The deal, part of U.S. government spending on air-traffic modernization, underscores the company’s strategic positioning in a sector benefiting from geopolitical tensions and defense budget expansions. Analysts noted that RTX’s historical outperformance against earnings estimates and its core expertise in critical infrastructure have amplified investor optimism.

The stock faces mixed dynamics ahead of its January 27 Q4 2025 earnings report, which could clarify its near-term trajectory. While the report is a neutral event until results are released, market attention remains focused on whether RTX can replicate its prior outperformance. Meanwhile, retail investors have been misled by unrelated news about “RTX” GPUs, creating short-term noise without affecting the company’s fundamentals. This confusion highlights the need for clarity in distinguishing the aerospace firm from unrelated tech sectors.

Headwinds include supply chain constraints in titanium and specialty materials, which threaten delivery timelines and margins. RTX’s valuation also appears stretched, with a P/E ratio of 39.08 outpacing its projected 10% earnings growth. Inflationary pressures and global trade uncertainties further complicate pricing strategies, particularly for its international operations, which account for over half its revenue. Technical indicators suggest a bullish trend, with the stock near its 52-week high and above key moving averages, though fundamentals remain exposed to macroeconomic shifts.

Geopolitical tensions and U.S. policy shifts could sustain defense spending, but fiscal constraints or policy realignments risk undermining long-term growth. RTX’s ability to navigate these challenges will determine whether its current momentum translates into sustained gains or corrects amid valuation pressures. For now, the FAA contract and sector tailwinds provide near-term support, but caution is warranted as external risks loom.