America’s defense industry has just received an urgent new challenge; send missiles across the Earth at five times the speed of sound, or even faster.

That’s because, in recent weeks, three of the nation’s staunchest adversaries have all claimed to have successfully tested hypersonic missiles. That’s right, the governments of China, North Korea, and Russia have thrown down the gauntlet in this technological arena.

The announcements all came in rapid succession, between September 1 and October 16. For a complex new defense platform that’s a dizzying pace.

But don’t worry. In the midst of all this, a key US defense supplier used their own advanced technology to test an ultrafast missile for the Air Force.

The news comes as the firm’s earnings per share jumped 125% in the last quarter with more upside on the way…

The New Space Race

Now then, a moment ago I noted three pieces of big news from America’s global adversaries regarding hypersonics. So, let’s take a look:

On September 1, Chinese military scientists all but confirmed they have developed a hypersonic drone but did not detail its offensive capabilities.

Four weeks later, North Korea said it plans to make hypersonic missiles a key part of its defense program.

On October 4, Russia said it test-fired a hypersonic missile from a submarine for the first time, increasing the ability to keep these weapons in “stealth mode.”

And then, on October 16, reports came in that China had launched a hypersonic missile.

Two days later, after US intelligence officials reacted with surprise about how advanced China’s missile program was, China said it was merely a “routine” spacecraft testing.

If you’re not familiar with hypersonic weapons, they’re one of the new offshoots of Space Race 2.0.

For years, researchers have been talking about sending everything from passenger planes to intercontinental ballistic missiles out into sub-orbital space and then dropping them down on a target on the other side of the world.

Hypersonic Acceleration

Basically, you let the Earth do the moving rather than the rocket. The Earth rotates at about 1,000 mph, so if you can get a missile into the upper atmosphere, it can “glide” through space where there’s no friction and drop down on its target.

But that means it has to reach beyond hypersonic speeds – which is about 5,800 mph – to get escape velocity (about 25,000 mph). That’s what has worried US intel about the Chinese launch because the weapon was boosted off one of China’s large rockets. Most hypersonic craft fly high, but not that high.

For that reason, most hypersonic missiles are designed to carry nuclear warheads and don’t leave the atmosphere. Current hypersonic weapons can be fired from conventional land- or sea-based platforms and are so fast, smart, and maneuverable that they’re tough to target. And that makes them tough to defend against.

Russia has developed a hypersonic cruise missile that flies at hypersonic speeds after a submarine or ship launch. North Korea may have launched a similar missile from a land-based platform.

The US, China, and India are also working hard on their own models, as well as new systems to defend against these new threats.

Keeping Pace

The US military has already run trials for anti-missile systems to counter the new breed of weapons. And one of those tried-and-true contenders also flew a successful hypersonic prototype in late September.

Last spring, Raytheon Technologies Corp. (RTX) completed its merger with United Technologies. That left RTX with Pratt & Whitney engines, which are used for F-16s and F-35s, among other aircraft.

It should be no surprise that this company is one of the leading missile and anti-missile makers for decades now. And it looks like its pedigree is secure heading into this new hypersonic future.

Combined with Raytheon’s sterling reputation on the missile side of things, it’s now a diversified defense firm with plenty of great assets and R&D. But it still reigns supreme when it comes to cutting-edge missile building.

Currently, Raytheon’s Iron Dome anti-missile system is being used as the gold standard for missile defense and that will remain true until a new system gets built, tested, and deployed.

On the offensive side, it was Raytheon that launched the successful test flight in September that I mentioned earlier.

The Hypersonic Air-breathing Weapons Concept (HAWC) is meant to create a singular platform prototype that can be used by the Army and Navy, with Raytheon as one of the key manufacturers.

Of course, Raytheon has a lot more going for it than just its current cutting-edge systems. But the fact is, building weapons guidance systems that remain functional at such high temperatures and are also nimble at those speeds has a significant spillover effect for Raytheon’s entire systems work.

Raytheon is outperforming the market by 56% at this point. And given the increasing global tensions, there will certainly be increasing spending on next-generation US defense capabilities.

Up until recently, earnings growth has been weak. However, in the last quarter, they jumped by 125%, and earnings are expected to close the year up 50%.

I believe they could very well expect them to double in the next three years.

So, while RTX is protecting the nation, it will also be safeguarding your wealth.

Cheers and good investing,

— Michael A. Robinson

Source: Strategic Tech Investor