Last October, Lockheed Martin (LMT) shares peaked at nearly $620. The stock looked like it bottomed at around $420 last month but the drop resumed.
On March 21, 2025, the U.S. government awarded Boeing (BA) a military contract. It would build the U.S. Air Force’s fighter jet. Next Generation Air Dominance, or NGAD, will have an engineering and manufacturing development contract that is worth over $20 billion. This replaces Lockheed’s F-22 Raptor.
Boeing’s win is rare. The firm is still managing serious quality issues. It had passenger planes plagued with doors ripping off during flight. Conversely, Lockheed’s jets are of strategic importance in warfare. More importantly, its unmanned technology is the present a future of military combat.
The Russia/Ukraine conflict validated the role of drones. Instead of buying BA stock after its rise, investors should consider AeroVironment (AVAV) and Lockheed Martin stock. Kratos Defense (KTOS) also supplies tactical UAVs.
In addition to LMT stock, consider Northrop Grumman (NOC). Governments will continue to have defense procurements for fixed-wing aeronautics.
Your Takeaway
Boeing’s uptrend before and after this contract win may not last. Boeing investors may want to sell into the rally, and then diversify the defense contractor holdings. Lockheed, Northrop, and RTX (RTX) are among the other companies to consider holding.
