Apparently, Cyberdyne Systems (the fictional company from the Terminator series) has a whole new cheerleader in defense firm Lockheed Martin (LMT), as it recently launched a subsidiary company designed to get more defense companies to bring artificial intelligence (AI) into their operations. Shareholders got a cold chill, meanwhile, and sent shares of Lockheed Martin down fractionally in the closing minutes of Monday’s trading.
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The new subsidiary is called Astris AI, and it will work to get more companies’ ideas on how to add AI to their product lines, all but guaranteeing that, at some point, we actually get Skynet. Certainly, defense contractors are no strangers to AI as it is, noted a Reuters report. AI is put to work in workflow optimization and similar back-office concepts. But Astris AI wants to get AI front and center in the defense industry, which likely has more than a few deeply concerned.
Astris will be headed by its chief revenue officer, Donna O’Donnell, who previously ran a generative AI team over at Xerox (XRX). Admittedly, that does give her experience, but here seems like much, much higher stakes. While certainly, AI at a company that makes office equipment can produce solid results, and has in the past, migrating that technology to defense contractors seems like an entirely different and much more dangerous playbook.
Getting Back At Those Emus
Meanwhile, Lockheed Martin was spotted down in Australia, working with Thales Australia on a set of warhead testing operations, noted a report from Asia-Pacific Defence Reporter. Out at the Mulwala munitions factory in New South Wales, Lockheed Martin staged the first of four “locally designed warheads” tests designed to help get Australia into a “domestic guided warhead production capability.”
One promptly wonders just how much AI will be involved here. But given that one of the warheads has already been tested—and detonated—successfully, artificial intelligence may not be needed down here. Meanwhile, Lockheed Martin Australia’s director and general manager for missiles and fire control declared that this was “…important work. Investment in research and development projects, like this one, serve as a pathfinder to future technology transfer, and advancements in knowledge and capabilities.”
Is Lockheed Martin a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LMT stock based on eight Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 12.76% rally in its share price over the past year, the average LMT price target of $620 per share implies 26.2% upside potential.
