Boeing wins the Navy's F/A-XX fighter; the $20 billion development deal is about a quarter of its defense backlog

The U.S. Navy picked Boeing on Tuesday to build the F/A-XX, its next carrier-based strike fighter, Boeing announced. Boeing beat Northrop Grumman for the job. The full-scale development contract is worth about $20 billion and covers multiple test aircraft for ground, airworthiness, systems and weapons testing, according to Defense News and Breaking Defense. Reuters, via Investing.com, said the program could grow to hundreds of billions of dollars over its life.

The jet replaces the Navy's F/A-18E/F Super Hornets and EA-18G Growlers beginning in the 2030s. Boeing said technical and programmatic details are classified. It follows Boeing's win of the Air Force's F-47 in 2025, so Boeing now holds both U.S. sixth-generation fighter programs.

The stocks

Boeing closed up 1.81% at $187.72, according to Nasdaq, and was at $192.05 in after-hours trading, up another 2.3%. Northrop Grumman closed down 0.18% at $504.91 and then fell to $488.00 after hours, down 3.35%. Lockheed Martin, which was not in the final round, closed down 1.14% at $512.18. At the close, Boeing's market value was about $148.4 billion.

The number behind the number

A $20 billion award sounds huge next to one quarter of sales, but it is paid out over years of development. The better yardstick is Boeing's defense order book. In its second-quarter results, Boeing reported an $85 billion backlog at its Defense, Space and Security unit. About $20 billion of new development work equals roughly 24% of that backlog.

The same release shows why investors will want to see the contract terms. The defense unit had $7.5 billion of revenue in the quarter, up 13% from a year earlier, but an operating margin of negative 0.2%, against 1.7% a year before. That quarter included $280 million of losses on the VC-25B presidential aircraft program. With the unit barely breaking even, how cost overruns on F/A-XX are split between Boeing and the Navy matters as much as the headline value. That split has not been disclosed.

Boeing Defense chief Steve Parker said the company had "invested accordingly" to run both fighter programs at once. Boeing said it is building a secure manufacturing facility in St. Louis for this work. Breaking Defense noted that the program was delayed in 2025 after White House concerns that funding F/A-XX could put the F-47 at risk.

What it means for Northrop and Lockheed

With both sixth-generation fighter programs at Boeing, Northrop and Lockheed are shut out of that market for now, though Lockheed keeps building the F-35, Breaking Defense reported. Northrop's after-hours drop shows the market had priced in some chance of a win. For suppliers, the program's scale matters more than the prime: two sixth-generation fighters in development at the same time means years of demand for engines, electronics and composite parts.

What traders watch next

Any disclosure of the contract type and first-year funding, Boeing's third-quarter results in late October, and whether Congress's 2027 defense spending bills fund the program at the level the award implies. More on Boeing in our story on its 737 MAX delays and the engineers' contract vote.

Sources: Boeing, Reuters via Investing.com, Defense News, Breaking Defense, Boeing second-quarter 2026 results, Nasdaq. Backlog share calculated by The Company Chronicle. This is market information, not investment advice.