Al Root

The U.S. military is preparing to decide which companies will build the newest generation of jet fighters. The decision will move several stocks even as the usefulness of expensive, manned fighters is in debate as cheaper drones proliferate.

"We could be getting news on who will be the prime contractor for the U.S. Air Force's Next Generation Air Dominance (NGAD) program" on Friday morning, Vertical Research Partners analyst Rob Stallard wrote in a recent report. At 11 a.m., President Donald Trump and Defense Secretary Pete Hegseth are scheduled to deliver remarks at the Oval Office, according to the president's public schedule.

NGAD is the name of the program that will essentially build a sixth-generation fighter jet. Generations refer to the technology and capabilities of certain plans; the F-35 and F-22 built by Lockheed Martin are fifth-generation fighters. Russia and China have fifth-generation fighters and China has shown what appears to be a prototype of a sixth-generation jet.

More advanced jets have better weapons, software, maneuverability, and stealth. They are also incredibly expensive. The F-35 can cost more than $100 million to purchase and another $500 million to $700 million to maintain and operate over its service life.

Costs like that, along with the emergence of better drone technology, are why jet programs face scrutiny. In November, for example, Tesla CEO and Department of Government Efficiency leader Elon Musk posted a video of drones flying in various formations on his social platform and said: "Meanwhile, some idiots are still building manned jet fighters like the F-35."

Lockheed and others have defended the need for manned, advanced jet fighters. "Think about your mission capability roadmap, air superiority in two examples: When you don't have air superiority, you get long-distance trench warfare with drones in Ukraine," said Lockheed CEO Jim Taiclet in February. "You've basically got drone warfare, high attrition, lots of casualties versus what Israel did to Iran with air superiority." Israel, his second example, has scored some decisive victories by having better jets than their foes.

Lockheed, along with the government and other contractors, continues to invest in unmanned systems. The Air Force's Collaborative Combat Aircraft program aims to have unmanned aircraft assist manned fighters.

Boeing and Lockheed are bidders for NGAD, Vertical Research's Stallard wrote, but other companies will end up supplying parts.

Lockheed and Boeing shares were up 2.5% and 0.9% in Friday trading, while the S&P 500 and Dow Jones Industrial Average were down 0.7% and 0.9%, respectively.

Lockheed and Boeing shares will likely move after any announcement. The direction will be dependent on the decision.

Write to Al Root at allen.root@dowjones.com

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March 21, 2025 10:38 ET (14:38 GMT)

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