Defense stocks have been in focus in recent sessions after President Donald Trump shared details of a new $175 billion missile defense project dubbed the “Golden Dome”.
This new initiative aims to protect the US from foreign threats using land, sea, and space-based technologies. The missile defense system is expected to be fully operational before the end of Trump’s term in January 2029.
According to Wolfe analyst Myles Walton, four major American defense technology companies, Lockheed, Northrop, L3Harris, and RTX, stand to benefit from the “Gold Dome” initiative.
Let’s take a closer look at what each of these four has in store for investors in 2025.
Lockheed Martin Corp (NYSE: LMT)
Lockheed is a front-runner for Golden Dome contracts due to its expertise in missile defense and command-and-control systems.
LMT shares are worth owning at current levels as the NYSE-listed firm is in an “enviable position of potentially securing content across all four segments of defense,” argued Peter Arment, a Baird analyst, in his recent note.
Arment’s $540 price target indicates potential upside of some 15% in Lockheed Martin stock from current levels. Note that LMT is a dividend stock that currently yields 2.81% which makes it all the more exciting to own in 2025.
L3Harris Technologies Inc (NYSE: LHX)
L3Harris has already committed $125 million to expand its Indiana facility, which will support the production of tracking satellites for the Golden Dome project.
In fact, the company based out of Melbourne, FL, was name-dropped as a potential contributor in the press release that shared details of the new missile defense project primarily because it has a domestic facility, said Seth Seifman, a JPM analyst in his latest report.
JPMorgan currently has an “overweight” rating on LHX shares with a price objective of $255 that signals potential upside of roughly 8.0% from here.
Northrop Grumman Corp (NYSE: NOC)
RBC analysts recommend owning Northrop stock this year as the Golden Dome project adds to a list of “emerging opportunities” that could help boost the company’s revenue in 2025.
NOC has been picked as a potential contractor for Trump’s $175 billion missile defense project due to its expertise in the Integrated Battle Command System.
The investment firm’s “outperform” rating on Northrop shares comes with a price target of $575 that indicates potential upside of more than 20% from current levels.
RTX Corp (NYSE: RTX)
RTX’s cutting-edge radar systems and missile interceptors are expected to be critical to the Golden Dome’s tracking and engagement capabilities.
RTX shares are worth owning at writing also because the company reported a better-than-expected year-on-year increase in both sales and earnings for its first quarter in April.
Additionally, RTX stock currently pays a healthy dividend yield of 2.02%, which makes it a suitable pick for income investors as well.
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