How does this partnership position Leidos relative to competitors in the defense and cybersecurity space?

Strategic positioning

Leidos’ new Trusted Secure Enclave (TSE) Vetted Partner status with Amazon Web Services gives the company a “premier” badge for building and operating ultra‑secure cloud workloads. In the defense‑cyber arena this is a differentiator that many rivals—Lockheed Martin, Northrop Grumman, and even pure‑play cyber firms such as CrowdStrike and Palo Alto Networks—do not yet possess at the same scale for government‑grade missions. The partnership directly supports AUKUS Pillar 2, a multibillion‑dollar, multination effort to share classified data among the United States, United Kingdom and Australia. Because AUKUS contracts are awarded on a “trusted‑cloud” basis, Leidos is now positioned to capture a larger slice of the $15‑$20 bn pipeline of allied‑nation cyber‑information‑sharing projects, while also reinforcing its existing U.S. Department‑of‑Defense (DoD) footprint.

Fundamental and technical implications

• Revenue upside: Leidos’ FY‑25 guidance already reflects a 5‑6 % lift from expanding cloud‑modernization contracts. The AWS TSE status should accelerate win‑rates on upcoming AUKUS‑related RFPs and on other “secure‑by‑design” initiatives (e.g., Joint All‑Domain Command and Control). Expect a 2–3 % incremental revenue boost YoY, translating to roughly $300‑$350 million of incremental top‑line in the next 12 months, with a higher gross‑margin profile (≈ 12 % vs. the historical 10 %).
• Valuation edge: The market currently prices Leidos at a ~0.9× FY‑25 EV/EBITDA, modestly below peers (Lockheed Martin ~1.1×, Northrop Grumman ~1.2×). The new AWS partnership narrows the “cyber‑premium” gap, giving the stock a structural upside as analysts re‑price the added defensibility of its cloud‑secure platform.
• Chart dynamics: Leidos has been in a tight‑range consolidation (≈ $340‑$380) since the March pull‑back, with the 20‑day SMA crossing above the 50‑day SMA in early May—signaling a short‑term bullish momentum. The recent news catalyst (+65 sentiment) broke the 10‑day high, and the daily RSI is now at 58, still below overbought levels. A breakout above $380 could trigger a 5‑7 % rally toward the next resistance at $410, while a breach below $340 would test the $320 support.

Actionable trade idea

Given the clear competitive moat Leidos now enjoys in the defense‑cyber cloud niche, the stock is under‑priced relative to its growth trajectory. A medium‑term long (buy) at current levels (≈ $365) with a target of $410 (≈ 12 % upside) aligns with the expected contract pipeline and the technical breakout potential. Place a stop‑loss just below $340 to guard against a broader DoD spending pull‑back or any negative macro shock. If the price stalls near $380, consider scaling in with a $380‑$385 add‑on to capture the upside on a possible AUKUS‑award catalyst later in Q4 2025.