Missile Production Push Strengthens RTX, Boeing and Defense Suppliers as Pentagon Expands Capacity

Pentagon missile expansion puts defense manufacturing capacity in focus

The U.S. defense industry is entering a major production expansion as the Pentagon works to replenish missile inventories and increase manufacturing capacity across Tomahawk, Patriot, THAAD and Standard Missile programs.

RTX (RTX) received one of the clearest signals Monday: a seven-year, $22.9 billion U.S. Navy contract for Tomahawk cruise missiles. Boeing (BA), meanwhile, is part of new seven-year framework agreements designed to expand Standard Missile-3 production, while Lockheed Martin (LMT), L3Harris Technologies (LHX) and General Dynamics (GD) have exposure to other missile programs and critical components.

Key Points

• RTX received a seven-year, $22.9 billion U.S. Navy contract aimed at increasing Tomahawk missile production to roughly 1,000 annually, about 10 times recent levels.
• Boeing and RTX are also involved in seven-year frameworks to expand SM-3 interceptor production, while Lockheed Martin, L3Harris and General Dynamics have exposure to other missile systems and components.
• The expansion faces an important constraint: motors, explosives, precision components and other specialized inputs can limit missile output even when government demand and private investment are rising.

RTX Lands $22.9 Billion Tomahawk Contract as Missile Output Expands

The most significant company-specific development is RTX's seven-year, $22.9 billion contract to manufacture Tomahawk cruise missiles for the U.S. Navy.

The procurement aims to increase Tomahawk production to approximately 1,000 missiles annually, roughly 10 times recent production levels.

Raytheon, an RTX business, said the company is investing in its workforce, technology, supply chain and facilities to increase capacity.

The expansion extends beyond Tomahawk.

Patriot and THAAD interceptor production is expected to roughly quadruple from approximately 700 annually, while air-to-air and precision-strike missile production is also set to increase substantially.

That makes the production push relevant to a broader group of defense companies.

L3Harris supplies rocket motors for RTX's Tomahawk program, while General Dynamics supplies warheads. Lockheed Martin and RTX participate in Patriot and THAAD missile systems, with Boeing and Honeywell Aerospace (HONA) providing parts and electronics.

The Pentagon is also pursuing a framework agreement worth more than $3 billion to triple Patriot production, quadruple THAAD output and establish a second source for solid-rocket motors used by PAC-3 interceptors.

The common theme is manufacturing capacity. Increasing missile inventories requires not only prime contractors capable of assembling weapons, but also suppliers capable of producing motors, electronics, warheads, explosives and specialized components at substantially higher volumes.

Why Are Boeing and RTX Expanding SM-3 Production?

The Department of War announced separate framework agreements with Boeing and RTX designed to increase production of components for the Standard Missile-3 Block IB and Block IIA interceptors.

The SM-3 is a ship-launched interceptor used within the Aegis Ballistic Missile Defense System.

Under the seven-year frameworks, Boeing will increase production of avionics and ejector assemblies. Boeing, the Department of War and SM-3 prime contractor Raytheon will begin scaling production while negotiating a formal multiyear contract.

The agreements provide manufacturers with a clearer demand signal, but there is an important distinction between these arrangements and RTX's Tomahawk award.

The SM-3 frameworks have not yet been converted into formal contracts. They allow production increases to begin while the parties negotiate multiyear awards.

A similar structure was previously established with Boeing and Lockheed Martin to increase production of seekers for the Patriot Advanced Capability-3 Missile Segment Enhancement interceptor. Boeing said its seeker deliveries increased more than 30% in 2025.

For Boeing, however, the defense opportunity comes alongside separate operational concerns.

The U.S. Army temporarily grounded Boeing-manufactured Apache helicopters following a fatal crash near Fort Hood, Texas. The grounding will remain in place while the Army investigates the cause.

Boeing shares fell following the announcement.

Its defense division generated $7.5 billion in second-quarter sales, up 13% year over year, but posted a $15 million loss. That nevertheless represents a substantial improvement from the $5.4 billion loss recorded by Boeing's defense and space business in 2024 and the $128 million loss in 2025.

Can the Defense Industry Produce Missiles Fast Enough?

Demand is only part of the equation. The ability to manufacture weapons at the required scale has emerged as another major issue.

Production bottlenecks include solid-rocket motors, igniters, energetic materials, specialized castings and precision components. These inputs often require specialized facilities, licenses for handling explosive materials and lengthy qualification testing.

That means additional funding for missile developers does not automatically translate into higher missile deliveries.

Private investment is nevertheless accelerating.

Defense-specific startup funding increased more than 30-fold sequentially during the second quarter, reaching $665 million from $19.9 million, according to the supplied PitchBook data.

Trailing-12-month investment in hypersonics increased nearly 560% from a year earlier, while funding for missile and munitions companies increased nearly 440%.

The concentration of that investment also highlights the challenge. Hermeus and Mach Industries accounted for $650 million, representing almost all defense-specific investment during the quarter. Meanwhile, the Defense Department committed $191 million across nine investments aimed at expanding solid-rocket-motor capacity and reducing component lead times.

Automated manufacturer Hadrian raised another $1.37 billion at a valuation approaching $8 billion as demand grows for manufacturing capacity serving established defense contractors and newer companies.

The resulting market signal is more complex than simply higher weapons spending. The expansion depends on whether the entire manufacturing chain can increase output alongside the prime contractors receiving large awards.

What It Means for Investors

The latest defense developments highlight several different layers of exposure to the same underlying production expansion.

RTX has direct exposure through its $22.9 billion funded Tomahawk contract as well as Raytheon's participation in SM-3, Patriot and THAAD programs.

Boeing participates through SM-3 components and Patriot PAC-3 seekers, although its defense business remains in the middle of a financial turnaround and the Apache grounding introduces another operational issue.

Lockheed Martin participates in Patriot and THAAD systems and previously entered a seven-year framework with Boeing aimed at increasing PAC-3 seeker production.

L3Harris and General Dynamics represent another part of the production chain through rocket motors and warheads used in Tomahawk production.

These distinctions matter because framework agreements, funded contracts and supplier relationships carry different levels of visibility. A framework can establish production targets and provide manufacturers with a demand signal without committing the same funding as a formal procurement contract.

That places increasing importance on which agreements ultimately become funded orders and whether suppliers can expand capacity sufficiently to support the planned production increases.

Political uncertainty remains another factor. Investors have expressed concern that defense spending could slow following the 2026 midterm elections. At the same time, the supplied information notes that defense spending has typically received bipartisan support and missile production is expected to increase regardless of congressional control.

Conclusion

The U.S. missile-production expansion is developing into a broad industrial effort spanning prime contractors, component manufacturers and specialized suppliers.

RTX's $22.9 billion Tomahawk contract provides the clearest immediate example, with production targeted to increase to approximately 1,000 missiles annually. Boeing and RTX are simultaneously preparing to increase SM-3 output, while Lockheed Martin, L3Harris, General Dynamics and other suppliers participate across related missile programs and components.

The challenge now shifts toward execution.

Government demand is increasing and private capital is flowing into defense technology, but production ultimately depends on motors, explosives, electronics, specialized materials and manufacturing infrastructure.

For investors following defense stock market news, the next phase will be determined not simply by how many agreements are announced, but by which companies can convert rising demand into funded orders and repeatable production at significantly higher volumes.

FAQs

What is RTX's new Tomahawk missile contract?

RTX received a seven-year, $22.9 billion contract to manufacture Tomahawk cruise missiles for the U.S. Navy. The procurement aims to increase production to approximately 1,000 missiles annually, roughly 10 times recent levels.

What are Boeing and RTX doing with the SM-3 missile program?

Boeing and RTX are participating in seven-year framework agreements intended to expand production of Standard Missile-3 Block IB and Block IIA interceptors. Boeing will increase production of avionics and ejector assemblies while the parties negotiate formal multiyear contracts.

Which companies have exposure to increased U.S. missile production?

The supplied information identifies RTX, Boeing, Lockheed Martin, L3Harris Technologies and General Dynamics among the public companies participating in missile systems, components or production programs.

What could limit higher U.S. missile production?

Manufacturing bottlenecks in solid-rocket motors, igniters, energetic materials, specialized castings and precision components could constrain production. These inputs require specialized facilities and qualification processes that can take months.

Why does the difference between framework agreements and contracts matter?

Framework agreements can establish production targets and allow manufacturers to begin expanding capacity while formal awards are negotiated. They do not necessarily represent the same funded commitment as a formal procurement contract.

This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.

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