In a major defense contract shake-up, President Donald Trump awarded Boeing a $20 billion contract on Friday to develop a next-generation sixth-generation fighter jet under the Next Generation Air Dominance (NGAD) program.
The highly anticipated deal, confirmed by Bloomberg and Reuters, is expected to shape the future of US air combat technology, replacing Lockheed Martin’s F-22 Raptor.
Following the announcement, Boeing (BA) stock surged, while Lockheed Martin (LMT) shares plunged, reflecting investor reaction to the defense industry shake-up.
Boeing secures historic sixth-generation fighter contract
President Trump announced the contract during an Oval Office meeting with Defense Secretary Pete Hegseth, emphasizing that the F-47, as the new fighter jet will be called, will set a new benchmark in air combat superiority.
The contract comes as a major win for Boeing, which is positioned to secure potentially hundreds of billions in future orders over the multi-decade lifetime of the project.
The deal is part of the US Air Force’s NGAD program, designed to phase out Lockheed Martin’s existing F-22 Raptor fleet.
What makes sixth-generation fighter jets different?
Unlike fifth-generation fighters like the F-22 and F-35, which emphasize stealth, sensor fusion, and advanced maneuverability, sixth-generation aircraft promise revolutionary upgrades, including:
- Next-level stealth technology for enhanced survivability
- AI-powered avionics for improved situational awareness
- Laser weapons capable of neutralizing airborne threats
- Unmanned teaming capabilities, allowing the fighter to control drone swarms
- Advanced networking to seamlessly integrate with air, sea, and land-based military assets
While full specifications remain classified, defense analysts believe the F-47 will incorporate state-of-the-art computing power and hypersonic capabilities, making it the most advanced fighter jet in the world.
The U.S. military plans to spend over $28 billion on the NGAD program and Collaborative Combat Aircraft (CCA) development through 2029, according to the Air Force Budget Justification Report from March 2024.
Lockheed Martin loses out, stock tumbles
The decision to award the contract to Boeing instead of Lockheed Martin, the traditional leader in US fighter jet development, sent LMT stock tumbling more than 5% on Friday.
Before the announcement, Lockheed shares were up about 2%, but the decline erased those gains, dragging LMT stock below its 50-day moving average in heavy trading.
Lockheed Martin shares are now down nearly 29% from their October 2023 record high of $618.95, reflecting investor concerns over the loss of a long-term multi-billion-dollar military contract.
Boeing stock surges on defense contract win
Meanwhile, Boeing (BA) stock jumped more than 4% on Friday, extending its weekly gains to over 11%, marking its best performance since July 2023.
Adding to the momentum, Boeing announced on Wednesday that it is on track to meet Q1 earnings estimates and expects to deliver approximately 44 aircraft this month, reinforcing investor confidence in its commercial and defense divisions.
With the NGAD program set to define the next era of U.S. air combat, Boeing’s F-47 development will be closely watched by military analysts and investors.
Meanwhile, Lockheed Martin is expected to push for additional defense contracts to offset the loss of its fighter jet dominance.
As defense spending ramps up, both companies remain key players in the global arms industry, but Boeing’s latest victory signals a major shift in military aviation leadership.
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