Boeing May Win F/A-XX Contract Due to Pentagon's Favoritism Towards F-47

The U.S. Air Force awarded the F-47 stealth fighter contract to Boeing, beating out Lockheed Martin. The Pentagon requested $3.5 billion for F-47 development, but only $74 million for the F/A-XX program. This has led to speculation that Lockheed Martin may pivot to bid on the F/A-XX contract, which could be worth hundreds of billions of dollars. The limited Defense Department dollars available for R&D work may be the reason for the disparity in funding.

The U.S. Air Force has awarded the F-47 stealth fighter contract to Boeing, marking a significant victory over Lockheed Martin. The Pentagon has requested $3.5 billion for the development of the F-47, while only $74 million has been allocated for the F/A-XX program. This stark disparity in funding has sparked speculation that Lockheed Martin may pivot to bid on the F/A-XX contract, which could be worth hundreds of billions of dollars [1].

The F-47 contract, valued at $20 billion to $50 billion in revenue, is a substantial win for Boeing. The company has been working on the F-47 since 2019 and is well-positioned to leverage its progress for future projects. In contrast, the F/A-XX program, which the Pentagon has described as a fighter-bomber, has been under consideration for over a decade but has received minimal funding [1].

The limited Defense Department dollars available for R&D work may be the reason for the disparity in funding. A senior Defense Department official explained that the Pentagon made a "strategic decision to go all-in on F-47" due to the constrained resources [1]. This decision has left Lockheed Martin in a challenging position, as it had been actively developing rival prototypes for the F-47 contract.

However, there is a glimmer of hope for Lockheed Martin. The U.S. Navy has included the F/A-XX on its Unfunded Priorities List for fiscal 2026, suggesting that it is still interested in the program. The Navy has requested $1.4 billion to continue development, which could open the door for Lockheed Martin to bid on the contract [1].

Moreover, there is speculation that the Pentagon may merge the F/A-XX and F-47 development programs. If this happens, Boeing could potentially tailor the F-47 to meet the Navy's needs, creating an F/A-47 variant. This would be similar to the F-35 program, which created different variants for the Air Force, USMC, and Navy [1].

Investors should closely monitor the developments in these contracts, as they have the potential to significantly impact the stock prices of Boeing and Lockheed Martin. However, it is essential to remember that these are speculative outcomes, and the actual situation may differ.

References:
[1] https://finance.yahoo.com/news/prediction-boeing-won-f-47-072300077.html