We recently published a list of Goldman Sachs Defense Stocks: Top 12 Stock Picks. In this article, we will take a look at where L3Harris Technologies, Inc. (NYSE:LHX) stands against other top defense stock picks from the Goldman Sachs Portfolio.
After a subdued start to the year, American defense stocks are beginning to see improved returns. Investors are buoyed by President Trump’s plans for a $1 trillion defense budget for fiscal 2026, adding to the momentum from last month’s unveiling of the F-47 and announcement to resurrect the country’s shipbuilding industry.
READ ALSO: 10 Best Mid Cap Defense Stocks to Buy According to Analysts and 10 Best Performing Defense Stocks So Far in 2025.
The sector has received another boost after market chatter that tariff negotiations to address trade imbalances could include commitments from foreign countries to buy weapons from the US. In a statement released on April 8, Vietnam’s prime minister asked for a 45-day delay in the imposition of tariffs and stated his country would buy more American goods, including weapons, to tackle the trade gap.
On April 11, Goldman analyst Noah Poponak adjusted his ratings and price targets for defense stocks, and the most notable adjustment was a prominent Navy shipbuilder receiving a double upgrade on the back of an executive order signed by Trump to revitalize the sector. Poponak expects the stock to benefit, with shipbuilding expected to be a high priority within the defense budget.
The firm is known for its expertise in stock recommendations, helping investors identify high-potential companies. GS boasts a vast network of analysts, covers a wide range of stocks. It also has a research team led by analysts and economists from around the world, offering insights on the economy and the broader market.
In a report released in March this year, Goldman Sachs Research projected a significant increase in defense spending by EU member nations. Military expenditure in the euro area accounted for 1.8% of the GDP in 2024, and is projected to rise to 2.4% by 2027. The firm’s analysts estimate the increased spending to positively impact GDP growth, with every €100 spent on defense to boost GDP by approximately €50.
Defense stocks have rallied in Europe this year, as regional capitals unlocked billions to supercharge their militaries. While recent tariffs have sparked a major plunge in shares over the past couple of weeks, this has been a year to remember for several European defense contractors, with significant returns so far in 2025.
With that said, let’s head over to the list of the top defense picks from the Goldman Sachs stock portfolio.
A military jetfighter against a deep blue sky with the sun behind it.
Methodology
For this article, we scanned Goldman Sachs’ 13F portfolio as of December 31, 2024. From there, we picked the top 12 defense stocks according to their stake value and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
L3Harris Technologies, Inc. (NYSE:LHX)
Stake Value as of Q4 2024: $304,901,080
L3Harris Technologies, Inc. (NYSE:LHX) is known for its wireless and night vision equipment, command and control systems, avionics, and terrestrial and spaceborne antennas. The company was formed in 2019 after Harris Corporation and L3 Technologies merged.
It is among the top defense picks from the Goldman Sachs stock portfolio. On April 11, the firm upgraded L3Harris Technologies, Inc. (NYSE:LHX)’s rating from Sell to Buy and raised its price target to $263 per share from $198. The analyst cited the company’s agile business model and strong financial health as major factors behind the upgrade.
Recent contract awards have enhanced L3Harris Technologies, Inc. (NYSE:LHX)’s appeal among investors. On April 7, it received the next contract option year from the US Space Force to continue the modernization and sustainment of ground system infrastructure for space domain awareness capabilities.
On March 31, the company signed a long-term agreement, valued at up to 1 billion euros, with the Dutch Ministry of Defense for Falcon IV radios for the FOXTROT program. In January, L3Harris Technologies, Inc. (NYSE:LHX) clinched a $263 million deal from the US Army for additional production of Enhanced Night Vision Goggle–Binocular (ENVG-B) systems.
L3Harris Technologies, Inc. (NYSE:LHX) recently announced the delivery of the first missionized OA-1K Skyraider II aircraft to the US Air Force to support special operations. The aircraft will be used to provide close air support, armed intelligence, surveillance, and precision strike capabilities.
According to Insider Monkey’s database for Q4 2024, 48 hedge funds held a stake in L3Harris Technologies, Inc. (NYSE:LHX), up from 40 at the end of the third quarter. Wall Street analysts are also bullish on the stock, with a consensus Buy rating and an average share price upside potential of 17%.
Overall, LHX ranks 7th among the Goldman Sachs Defense Stocks: Top 12 Stock Picks. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LHX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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