Leidos vs. RTX: Which Defense Tech Stock Is Poised for Stronger Growth?

Aparajita Dutta June 26, 2025

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Key Takeaways

Both LDOS and RTX hold solid short-term solvency to support investment in advanced defense technologies.
Rising U.S. defense budgets and commercial air travel boost both companies.
LDOS trades at a lower forward P/E than RTX, while RTX beats LDOS in 1-Year share price performance.

Over the last decade, global defense priorities have shifted toward digital warfare, integrated networks and AI-powered intelligence systems. Consequently, investor attention has shifted to defense technology stocks like Leidos Holdings (LDOS - Free Report) and RTX Corp. (RTX - Free Report) , which, despite their differing core business models, are increasingly converging in areas such as cybersecurity and digital defense.

While Leidos operates as a leading government IT and engineering services provider, specializing in cybersecurity, surveillance, logistics and data analytics, RTX is a defense manufacturing powerhouse, delivering advanced physical systems, such as missile defense, hypersonics, radar and avionics, in addition to transformative technologies. Notably, RTX’s BBN, business division, known for its work in areas like networking, cybersecurity and artificial intelligence, has a long history of innovation, including contributions to the development of the first email.

As digital and physical defense increasingly intersect with the accelerating defense tech race amid the rising complexity of modern warfare, an investor might be left with the question: Which stock offers stronger, more sustainable upside in 2025? Let’s delve deeper into their fundamentals to get that answer.

Financial Stability & Growth Drivers: LDOS vs RTX

At the end of the first quarter of 2025, Leidos Holdings’ cash and cash equivalents totaled $0.84 billion, while its current debt amounted to $0.12 billion. So, it would be safe to conclude that LDOS holds a strong solvency position in the near term, which should enable it to continue investing in its AI-powered cybersecurity solutions for defense, intelligence and homeland security. It also provides the company with the financial flexibility to pursue strategic acquisitions, such as its recent purchase of Kudu Dynamics, to support future growth.

Such a solid financial position has also enabled LDOS to reward its shareholders with dividends worth $53 million. Leidos also purchased shares worth $528 million on the open market in the first quarter, reflecting a solid year-over-year increase of 188.5%.

As of March 31, 2025, RTX’s cash and cash equivalents totaled $5.16 billion, while its current debt of $3.06 billion remained well below the cash reserve. This reflects a solid solvency position for RTX over the short term, which should enable it to continue investing in innovative technologies like hypersonics, counter-hypersonics, next-generation radars and sensors within the aerospace-defense industry. Such a solid financial position must have enabled RTX to repurchase shares worth $50 million in the first quarter.

From the perspective of growth drivers, the expansionary U.S. defense budget stands out as a major catalyst for both Leidos Holdings and RTX. The proposed 13% hike in the U.S. defense budget for fiscal 2026, including a significant investment for the development and deployment of a Golden Dome, a next-generation missile defense shield that would protect the United States from missile threats coming from any adversary, raises hope for both these stocks.

Notably, LDOS believes that it is well-positioned to contribute meaningfully to the Golden Dome mission with its next-generation sensor and missile defense capabilities like those used recently in the defense of Guam. On the other hand, RTX enjoys a long-standing collaboration with Rafael Advanced Defense Systems on Israel’s Iron Dome, which inspired the Golden Dome concept.

Another growth catalyst benefiting both Leidos and RTX is rapidly growing commercial air travel. Notably, Leidos’ aviation solutions are integral to global air traffic management, supporting operations in 60% of the world’s air traffic and 80% of oceanic airspace.

On the other hand, RTX’s Pratt & Whitney unit is a renowned jet engine manufacturer, with its GTF (Geared Turbofan) engines currently being the most fuel-efficient engines for the single aisle market. Its Collins Aerospace unit has been manufacturing aerostructures and cabin interiors for commercial jets for many years now. The company also serves the commercial aircraft aftermarket industry.

Beyond defense and commercial aerospace, Leidos benefits from a highly diversified portfolio that spans sectors such as healthcare, energy, commercial aviation, space and advanced scientific research. This broad industry exposure helps reduce reliance on any single market and creates multiple revenue streams, enhancing the stock’s stability and long-term growth potential.

RTX also has a prominent presence in the space industry, with its Raytheon unit providing end-to-end space solutions – from ground control systems to on-orbit sensors.

Risks of Investing in Leidos and RTX

Despite strong demand and long-term growth prospects, manufacturers like Leidos and RTX continue to grapple with persistent supply-chain and labor challenges. Global shortages of critical materials, such as semiconductors and rare earth elements, remain a significant hurdle, exacerbated by heavy dependence on key suppliers like China and Russia. These issues, which intensified during the pandemic, have been further strained by ongoing geopolitical tensions, increasing raw material costs and causing delays in the production and delivery of defense systems.

Adding to this pressure, the U.S. government has introduced broad tariffs on major trading partners. As both LDOS and RTX depend on other nations for the supply of raw materials for their products, such policies could disrupt already fragile global supply chains and further inflate their operational expenses.

Labor shortages pose another major threat. According to the 2024 AIA-PwC "On the Horizon" Workforce Study, the aerospace-defense sector faces a 13% attrition rate, well above the U.S. average of 3.8%, driven by retirements and high turnover. This talent gap could affect production timelines and quality control, particularly in specialized areas like aviation systems and advanced technologies. In the near term, these headwinds may limit operational efficiency and weigh on profitability for both companies.

How Do Zacks Estimates Compare for LDOS & RTX?

The Zacks Consensus Estimate for Leidos’ 2025 sales implies a year-over-year rise of 2.7%, and the same for its earnings suggests growth of 4.8%. The consensus estimate for 2026 also reflects a similar improvement. The stock’s annual bottom-line estimates have shown an upward trend over the past 60 days.