Boeing stock rose 6.5% on Friday after President Trump announced that the Air Force’s next jet fighter, the F-47 would be made by Boeing instead of rival Lockheed Martin.
As Boeing stock rose, Lockheed Martin fell 6% after the company lost to its rival. ⁽¹⁾
Source: TradingView
Behind the Project
The Pentagon wanted the F-47 jet fighter to replace the military’s current stealth jet F-22, which was developed by Lockheed Martin. The Pentagon has not released the cost of the program, but experts state that R&D could cost up to $50 billion. ⁽²⁾
The Trump administration has committed to strengthen its military defense, awarding the $20 billion defense contract to Boeing. ⁽³⁾
Boeing’s Turning Point
The deal could represent a turning point for Boeing. Its defense business represents one-third of the company’s revenues. But over the past few years, the company has lost billions, with Boeing stating it has been locked into money-losing defense contracts.
Many of Boeing’s defense and space contracts have experienced cost overruns, delays and other issues. ⁽⁴⁾
Boeing has struggled to right itself ever since a 2024 incident where a cabin panel blew off mid-flight, leading to a federally mandated production slowdown. The company told investors that it lost $11.8 billion during this period of worker strikes. Boeing’s CEO, Kelly Ortberg stated his commitment to secure more government contracts for Boeing to reverse its losses. ⁽⁵⁾
The jet-fighter contract represents a vote of confidence by the administration in a company that has been dealing with a lot of issues. President Trump and Elon Musk have publicly criticized Boeing for delays on an Air Force One replacement and past cost overruns on military projects.
Lockheed’s Defeat
Lockheed Martin’s loss of the government contract resulted in a 6% decline in the stock. The Boeing rival has been seeking new contracts to lessen its dependency on its F-35 fighter program, which has been filled with delays, cost overruns and design and software challenges. ⁽⁶⁾
The loss of the contract could lead to losses for Lockheed Martin in annual net income between $400-$500 million dollars, estimated by analysts. ⁽⁷⁾
Despite the setback, Lockheed Martin could still continue to play an important role in the long run for US defense planning. ⁽⁸⁾
