A Defense Contractor Accidentally Invented Your Microwave
With melted chocolate, popped corn kernels, and an exploding egg, Raytheon engineer Percy Spencer knew he was on to something...
A Defense Contractor Accidentally Invented Your Microwave
By John Evelius, junior analyst, Chaikin Analytics
With melted chocolate, popped corn kernels, and an exploding egg, Raytheon engineer Percy Spencer knew he was on to something...
In 1945, World War II was winding down. But defense-equipment company Raytheon kept working on building better radar tools.
Every day, Spencer was surrounded by vacuum tubes called "magnetrons." They generate microwave energy that radar systems need. Radar uses that energy to spot enemy aircraft and submarines from miles away.
Though Spencer only had a fifth-grade education, he had worked his way to becoming one of the country's top experts on magnetrons.
Raytheon spent the war years racing to build these tubes fast. Thanks to Spencer, daily output jumped from just 17 tubes to more than 2,600.
This was good news because those tubes powered roughly 4 out of every 5 American and British radar sets during the war.
One day, Spencer was standing near an active magnetron when he felt something odd in his coat pocket...
He reached in... His chocolate bar had melted.
Most engineers would have wiped their hands and moved on. But not Spencer.
Curious by nature, he sent someone out for a bag of popcorn kernels and held it near the tube.
Within minutes, the kernels had popped.
Emboldened, Spencer tried an egg next. It exploded, covering a nearby coworker's face in egg guts.
Raytheon knew it was onto something great. The company filed a patent within months. Two years later, the company unveiled the first commercial microwave oven.
At the time, this machine stood nearly 6 feet tall. It weighed 750 pounds. And it cost as much as $5,000. That was more than the average new car cost at the time.
Raytheon found buyers on ocean liners and in hotel kitchens long before the microwave could fit on a countertop.
After two decades of technology innovations, the microwave finally became small and cheap enough for an ordinary kitchen. And by the mid-1970s, gas ranges finally lost their lead in American kitchens.
A radar company built the microwave almost by accident, chasing a war effort that had nothing to do with cooking.
But that same underlying technology – and the decades of radar and guidance-systems expertise built on top of it – never stopped being the company's real business.
Today, militaries around the globe race to restock missile-defense systems and modernize aging radar networks. And the company that grew out of Raytheon is cashing in on that shift...
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A Company Still Living Off Radar Technology
Now called RTX (RTX), the parent company is still built around the old Raytheon name and history.
RTX builds top-of-the-line defense tools. It makes Patriot missile-defense systems currently protecting cities from airstrikes. Fighter jets around the world carry RTX's Advanced Medium-Range Air-to-Air Missiles ("AMRAAMs"). And a large portion of commercial aircraft are powered by RTX's jet engines.
And business is booming...
Second-quarter 2026 sales hit $24.7 billion, up 14% from a year earlier. Earnings per share hit $1.89, beating Wall Street estimates by more than $0.20.
The Raytheon defense segment alone grew sales 18% year over year. This is partly thanks to rising orders for Patriot, Standard Missile, and AMRAAM systems.
The order book tells an even bigger story...
RTX closed the quarter with a record $289 billion in backlog. Almost half of that is in defense contracts alone. This single quarter brought in nearly $20 billion of new defense awards.
As you might expect, management raised its full-year guidance across the board. They now expect between $95 billion and $96 billion in sales for the year and adjusted earnings per share of $7.10 to $7.25.
Eighty years after a melted candy bar, the same underlying radar technology is busier than it has been in decades.
The Setup Behind the Rally
After a pullback earlier this year, RTX shares have popped up 18% in the past three months. In the chart below, you can see the move – along with some data from the Power Gauge...
Right now, our system gives RTX a "neutral" rating. After a recent dip, shares currently trade just above their long-term trend line. And you can see that Money Flow has been strong overall during the past three months.
Even with the pullback over the past few days, this is a signal that real buying pressure backed the recent move higher. When institutional money flows into a stock, it's often a sign that large investors expect strength to continue.
Of course, no single signal is an absolute promise of what comes next...
But if RTX's Money Flow swings higher again, that could help propel the stock for another big upward move. Keep an eye on RTX.
Good investing,
John Evelius
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— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bullish. Major indexes remain all bullish.
* * * *
Sector Tracker
Sector movement over the last 5 days
Materials
+3.48%
Health Care
+3.28%
Communication
+2.44%
Real Estate
+1.64%
Discretionary
+1.37%
Staples
+1.10%
Financial
+0.81%
Utilities
-1.61%
Information Technology
-2.09%
Energy
-2.54%
Industrials
-2.82%
* * * *
Industry Focus
Health Care Services
35
23
0
Over the past 6 months, the Health Care Services subsector (XHS) has outperformed the S&P 500 by 15.74%. Its Power Bar ratio which measures future potential is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #1 of 21 subsectors.
Top Stocks
ADUS
Addus HomeCare Corporation
AGL
agilon health, inc.
AMN
AMN Healthcare Services, Inc.
* * * *
Top Movers
Gainers
MRNA
+14.36%
SMCI
+9.35%
HOOD
+8.17%
CDW
+7.23%
LITE
+6.67%
Losers
ALB
-5.89%
DOW
-4.07%
LYB
-4.06%
ERIE
-3.97%
TGT
-3.78%
* * * *
Earnings report
Earnings Surprises
SMTC Semtech Corporation
Q2
$0.71
Beat by $0.10
INTU Intuit Inc.
Q4
$4.03
Beat by $0.44
DKS DICK'S Sporting Goods, Inc.
Q2
$3.53
Missed by $-0.23
ZM Zoom Communications, Inc.
Q2
$1.55
Beat by $0.07
NCNO nCino, Inc.
Q2
$0.26
Missed by $-0.01
* * * *
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