RTX: The $272 Billion Defense Giant Generating Record Free
RTX Corporation (NYSE: RTX) has quietly become the world's largest defense contractor by market capitalization, surpassing both Lockheed Martin and Boeing. At $202.62 per share, the stock trades within 2% of its all-time high of $206.73, having nearly doubled from its 52-week low of $112.27. With a market cap of $272 billion, RTX commands a premium that reflects its unique position straddling both commercial aerospace and defense. The timing could hardly be more relevant. U.S. and Israeli military strikes on Iran in late February 2026 have thrust defense spending into the spotlight, with RTX's Raytheon missile systems at the center of operations. But the real story isn't a single conflict — it's a structural shift in global defense budgets. NATO members are racing to meet and exceed their 2% GDP spending targets, European allies are building out their own missile defense capabilities, and the U.S. defense budget continues to climb. RTX reported $88.6 billion in revenue for fiscal 2025, with free cash flow surging 75% year-over-year to $7.94 billion. For investors, the question is whether RTX's premium valuation — 40.9x trailing earnings — is justified by its growth trajectory and cash generation, or whether the defense rally has pushed the stock too far, too fast.