Anduril is gunning for Lockheed Martin’s (LMT) throne, and it’s not playing by the old rules. The defense-tech start-up, now valued at $30 billion, is aiming to do to Lockheed what Tesla (TSLA) did to Ford (F)—turn an entire industry on its head.
Anduril Builds Faster, Cheaper, Smarter
Founded in 2017 by Palmer Luckey and a group of Silicon Valley engineers, Anduril takes a different approach from traditional defense contractors. Instead of chasing long-term, custom-built government contracts, the company focuses on commercial technology, autonomy, and AI software to build systems faster and at lower cost.
That strategy comes with a bold goal. Greg Martin, managing director at Rainmaker Securities, described it as an effort to “take the defense budget from $900 billion to $500 billion without losing lethality.” The idea isn’t to shrink the military’s capability, but to make defense hardware more affordable by using existing tech—like Lattice, Anduril’s AI platform that powers surveillance towers, drones, and other systems.
Anduril’s Software and Hardware Work Together
Anduril’s Executive Chairman, Trae Stephens, told Barron’s that Lattice doesn’t just power Anduril’s new systems. It’s also retrofitting legacy platforms with autonomy. The blend of software and hardware is Anduril’s secret sauce, making it feel more like Tesla or Nvidia (NVDA) than Lockheed. As Stephens puts it, “If we can’t win [the best talent], we have no reason to exist.”
Anduril is also focusing on on vertical integration, planning massive factories like Arsenal-1 in Columbus, Ohio, to build at scale—something rare for a defense start-up. But scaling up is no cakewalk. As Richard Aboulafia of AeroDynamic Advisory puts it, “How many parts does it take to build an airplane? All of them.”
Anduril Raises Valuation as It Challenges Lockheed
Despite its challenges, Anduril is flush with cash and growing fast. Some bids on Rainmaker Securities value it closer to $35 billion, up from $14 billion a year ago. Stephens knows the road ahead is tough but sees the opportunity. “There’s all this hardware that is commercially available…really cutting edge stuff,” he says.
And just like SpaceX blindsided ULA, Anduril could be Lockheed’s biggest surprise yet.
Is Lockheed Martin Stock a Buy or Sell?
Despite the threat of being dethroned, analysts remain optimistic about LMT stock—but not without caution. The consensus rating is a Moderate Buy, based on eight Buys and nine Holds. Over the past year, LMT has increased by more than 4%, and the average LMT price target of $520.29 implies an upside potential of 9% from current levels.
