Better Defense Stock to Own Through 2030: Palantir vs. RTX Corporation

As global defense spending increases, two companies are positioned to potentially benefit from this trend: Palantir Technologies and RTX Corporation. Palantir offers an AI-driven software solution, while RTX provides a more conventional defense-focused business.

Palantir's software assists defense and intelligence agencies in utilizing data from various sources, coordinating operations, and making critical battlefield decisions. The company's Artificial Intelligence Platform, in particular, enables organizations to deploy AI using their own data and operational systems. Palantir's revenue surged by 93% year over year in the second quarter, driven by strong growth in both U.S. commercial and government segments. However, the company trades at a high valuation, with a price-to-earnings (P/E) ratio of 168.

RTX Corporation, on the other hand, offers a more traditional route into defense through its Raytheon, Pratt & Whitney, and Collins Aerospace divisions. The company supplies a wide range of products and services, including missile defense systems, military engines, and aircraft components. RTX's defense business has been positively impacted by governments' efforts to enhance military capabilities and replenish weapons inventories.

The company's latest results include an 11% increase in sales and a record $340 billion backlog, including $164 billion in defense orders. RTX's valuation is less demanding, with a P/E ratio of just 31 and an established defense franchise with a substantial contract backlog. Analysts rate the stock as a moderate buy, with potential upside of up to 35%.

While both companies stand to benefit from increased defense spending, Palantir represents a higher- upside, higher-valuation option for growth-oriented investors. RTX, with its combination of established earnings, diversification, and a dividend, presents a more balanced choice for investors seeking defense exposure through 2030.