Northrop Grumman Corp. (NYSE:NOC) stock is falling on Wednesday, after the U.S. Navy selected Boeing Co. (NYSE:BA) over Northrop to develop its next-generation carrier-based fighter jet, the F/A-XX.
The contract is worth more than $20 billion, according to the Department of Defense, which announced the award on X on Wednesday.
Reuters said the F/A-XX program could eventually be worth hundreds of billions of dollars as production ramps up and potential foreign orders materialize.
The Navy expects the first production aircraft to enter service in the 2030s, operating alongside more than 270 planned F-35Cs, while Super Hornets are expected to remain in service into the 2040s.
What The F/A-XX Contract Covers
The Pentagon said the award covers multiple test aircraft for ground, airworthiness, systems and weapons-integration testing. Pentagon acquisition chief Michael Duffey said, “F/A-XX will dominate contested airspace, extend operational reach, and deliver a decisive combat advantage for the warfighter.”
Boeing’s Second Fighter Win In Two Years
The award follows Boeing’s 2025 win over Lockheed Martin for the Air Force’s F-47, a development contract also worth more than $20 billion.
Boeing Defense CEO Steve Parker said investments in “new facilities uniquely suited to build multiple products with next-generation capabilities” leave the company ready to execute the program.
Delays Give Way To Long-Term Fleet Plan
The Navy competition had faced repeated delays over engineering and supply-chain capacity.
The Pentagon considered pushing the program back by as much as three years before Congress intervened, providing $750 million in 2025 legislation and another $1.4 billion for fiscal 2026.
Lockheed Martin was eliminated from the competition in March 2025, leaving Boeing and Northrop as finalists.
Defense ETFs With Northrop Grumman Exposure
Northrop Grumman has exposure across several defense-focused ETFs, including the Global X Defense Tech ETF (NYSE:SHLD), where it carries a 7.77% weighting and is down 9.36% year to date.
In the WisdomTree Global Defense Fund (NASDAQ:WDGF), Northrop Grumman accounts for 4.94% of the portfolio, with the ETF down 5.14% year to date. Meanwhile, the State Street SPDR S&P Aerospace & Defense ETF (NYSE:XAR) has a 2.87% weighting in Northrop Grumman and is down 6.60% year to date.
NOC Price Action: Northrop Grumman shares were down 3.87% at $485.10 at the time of publication on Wednesday. The stock is trading near its 52-week low of $479.02, according to Benzinga Pro data.
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