Boeing gets a big missile deal with the Pentagon — and the stock pops 5%

The Pentagon signed a seven-year framework agreement with Boeing $BA and Lockheed Martin $LMT to triple production capacity of seekers for the Patriot Advanced Capability-3 Missile Segment Enhancement interceptor, the Defense Department announced April 1.

Boeing manufactures the seekers, which enable PAC-3 interceptors to identify, track, and defeat threats including hostile aircraft, hypersonics, and ballistic and cruise missiles, according to Boeing. Lockheed Martin is the prime contractor for the PAC-3 MSE interceptor itself.

The agreement is part of the Trump administration's Arsenal of Freedom initiative to strengthen the defense industrial base. Under the framework, Boeing, the Defense Department, and Lockheed Martin will begin production ramp-up and negotiate toward a formal multi-year contract award later this year, Boeing said.

Since 2024, Boeing has spent over $200 million to expand PAC-3 seeker production in Huntsville, Alabama, including adding 35,000 square feet to its facility, the company said. The agreement also allows for more investments that Boeing calls "cash-neutral."

"To build a true Arsenal of Freedom, we must strengthen every link in the chain," Pentagon acquisition official Michael Duffey said in a statement, according to Breaking Defense. "This agreement with Boeing is a direct reflection that speed, volume, and a resilient supply chain are paramount."

Steve Parker, president and CEO of Boeing Defense, Space & Security, said in a statement that the framework "will allow us to produce and deliver more advanced seekers and enhance our military's advantage."

The PAC-3 seeker has been a chokepoint for accelerating interceptor production, according to Breaking Defense. In 2025, Boeing increased seeker deliveries by more than 30%, the company said.

The Boeing deal follows a separate framework agreement the Defense Department signed with Lockheed Martin in January to increase annual PAC-3 MSE production capacity from approximately 600 to 2,000 interceptors. Lockheed Martin said in 2025 it delivered 620 PAC-3 MSEs, exceeding the prior year by more than 20%.

The Pentagon has announced more than half a dozen multiyear weapons framework agreements since the start of the year, including deals with Lockheed Martin to expand THAAD interceptor production and with RTX to boost output of the Tomahawk cruise missile and AMRAAM air-to-air missile, according to Breaking Defense. None of those agreements had been converted into finalized contracts as of the Boeing announcement.

Boeing stock rose on the news, according to MarketWatch.