RTX Beats Earnings With 60% Order Growth: Defense Is the New AI

$RTX kicked off defense earnings week by posting a beat-and-raise quarter that would make even the most jaded analyst crack a smile. Commercial orders up over 60% year-over-year, international defense demand up 50% year-over-year, and CEO Chris Calio sounding like a man who absolutely did not need the Iran war to justify his guidance. And yet, here we are.

The timing is almost too convenient. With Iran's precision strikes dismantling Gulf infrastructure, two tankers hitting mines in the Strait of Hormuz, and Trump openly floating the use of the "mother of all bombs," the geopolitical backdrop has basically written a marketing brochure for every defense contractor on the planet. $GE Aerospace and $NOC both followed RTX with beat-and-raise quarters of their own, completing a clean sweep for the sector. GE Aerospace has now raised its full-year guidance eight times since January 2024. Eight. That is not a trend, that is a personality.

So what are retail traders actually doing with this information? Social sentiment is showing a clear pivot toward defense names as the VIX climbed as high as 19.99 last Thursday before pulling back to 18.44 Monday. When volatility spikes and geopolitics goes sideways, defensive sectors historically attract rotation capital, and this earnings season is giving that thesis actual fundamental backing rather than just vibes.

The bull case here is straightforward: international demand is structurally elevated, parts and maintenance revenue (RTX's "shop visits" business) is a recurring cash flow engine, and the war premium in energy is funding government defense budgets globally. Higher oil prices mean Gulf states have more petrodollars to spend on military hardware. Follow the money.

The bear case is less obvious but worth noting. Jet fuel costs and airline health are flagged as concerns by RTX management, and a chunky portion of commercial aerospace revenue is tied to how healthy carriers actually are. If oil at $110 a barrel starts grounding flights and hammering airline margins, that shop-visit pipeline gets a lot less reliable.

Still, three simultaneous beat-and-raise quarters across the biggest names in aerospace and defense is not a coincidence. The Iran war just handed this sector a multi-year earnings catalyst, and the street is only starting to price it in.