Aerospace Enters Major Spending Cycle
The U.S. aerospace sector is entering its biggest investment surge in decades after Congress approved $839 billion in Pentagon funding for fiscal 2026. The budget, which is $8 billion more than the DoD requested, earmarks billions for space, missile defense, and advanced aviation technology, set to spur R&D and expand industrial capacity.
A significant portion of the new funding is earmarked for the U.S. Space Force, which is set to receive a budget of approximately $39.9 billion, an increase of nearly 40% from the previous year. This surge is largely driven by the "Golden Dome" initiative, a major new missile defense shield with a heavy focus on space-based sensors and interceptors. The budget allocates $13.4 billion to integrate and expand space and missile defense systems under the Golden Dome program. The Missile Defense Agency's total request is around $13.2 billion, including a significant $3.2 billion for the Ground-Based Midcourse Defense system to counter intercontinental ballistic missiles. A new sixth-generation fighter, the F-47, is a centerpiece of the Air Force's modernization. The budget provides approximately $3.5 billion for the Next Generation Air Dominance (NGAD) program, which includes the F-47 being built by Boeing. The Air Force plans to procure at least 185 of these advanced jets. To support the new fighter, the Air Force is investing heavily in autonomous drones. The Collaborative Combat Aircraft (CCA) program, which aims to create "loyal wingman" drones to fly alongside manned jets, is set to receive around $804 million in fiscal year 2026. The plan is to field at least 1,000 of these uncrewed aircraft. This major spending increase is not without trade-offs. To fund these next-generation priorities, the Pentagon is cutting back on older programs. The purchase of F-35A fighter jets will be halved in 2026, and the entire A-10 Warthog fleet is slated for early retirement. The research and development (R&D) portion of the budget sees a substantial increase, jumping to a proposed $179 billion when including funds from a separate reconciliation bill. This influx of cash is intended to accelerate the development of cutting-edge technologies and counter the advancements made by competitors like China.
