The Pentagon committed more than $135 billion on Wednesday to accelerate Patriot interceptor and nuclear-submarine production as President Donald Trump presses defense contractors to expand factories and prioritize output over shareholder payouts.
Lockheed Expands Patriot Missile Production Capacity
The Army converted an April agreement with Lockheed Martin Corp (NYSE:LMT) into a seven-year contract worth up to $58.6 billion for PAC-3 Missile Segment Enhancement interceptors. The plan runs through fiscal 2032 and supports Lockheed’s goal of lifting annual output to 2,000 missiles and tripling capacity by 2030.
The deal follows Trump’s pressure on contractors to quadruple production of critical weapons. Reuters reported that the administration wants companies to reinvest in plants rather than emphasize dividends and buybacks. Congress must still appropriate money before the preliminary agreement reaches its full value.
Demand has surged as the United States uses interceptors in Iran and supplies air defenses to Ukraine. The Center for Strategic and International Studies estimates the U.S. holds fewer than 1,000 Patriot interceptors. Lockheed has also unveiled a lower-cost Patriot missile priced at less than half the roughly $4 million PAC-3 MSE.
Read Also: Trump Orders Strikes on Iran After Missile Attack: Dow Futures Gain 94 Points, Brent Hovers Near $90
Navy Awards Landmark Nuclear Submarine Contracts
Separately, the Navy awarded General Dynamics Corp.’s (NYSE:GD) Electric Boat and HII’s Newport News Shipbuilding $76.6 billion for nine Virginia-class attack submarines and five Columbia-class ballistic-missile boats, with work expected through July 2038.
The Navy called the awards a "once-in-a-generation recapitalization." Vice Adm. Robert Gaucher said continuous production would deliver "the world’s most lethal, survivable and resilient combat platform" while stabilizing the shipbuilding base.
Benzinga reached out to the Pentagon for additional details on both deals but did not hear back immediately.
Defense ETFs Gain On Spending Boom
The commitments reinforce a Pentagon restocking cycle. Lockheed and RTX Corp. (NYSE:RTX) raised their 2026 forecasts as missile demand lifted sales and backlogs.
Investors can gain broader exposure through defense ETFs. The iShares U.S. Aerospace & Defense ETF (BATS:ITA), which holds RTX, General Dynamics and Lockheed, returned 9.21% at net asset value since the beginning of the year. The Invesco Aerospace & Defense ETF (NYSE:PPA), also holding all three, gained 8.23%.
The equal-weighted SPDR S&P Aerospace & Defense ETF (NYSE:XAR), whose largest holdings include RTX and General Dynamics, led with a return of 6.11% year-to-date. Those gains reflect enthusiasm around Trump’s proposed $1.5 trillion defense budget, though the contracts still depend on congressional funding.
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