The Pentagon has awarded a contract valued up to $20.7 billion to Raytheon, a subsidiary of RTX (NYSE:RTX), to expedite the production of Advanced Medium-Range Air-to-Air Missiles (AMRAAM) amid concerns over dwindling stockpiles.
The AMRAAM missile is a key component of air-to-air combat for fighter jets and the National Advanced Surface-to-Air Missile System (NASAMS), which helps defend the Washington area and is also used by more than a dozen countries, including Ukraine, Oman and Qatar.
The five-year multi-year contract with two option years was awarded on Sept. 25, according to a Monday press release by the Department of Defense.
The multiyear temporary contract is among several major munitions deals launched by the Pentagon this year to encourage defense contractors to increase production. Raytheon nearly doubled AMRAAM production in 2025 from the previous year and had previously set an annual production target of at least 1,900 missiles.
The deal is part of the Pentagon’s “Arsenal of Freedom” initiative.
Pentagon Races To Replenish Missiles
The Pentagon’s decision to award the contract to Raytheon comes amid a broader push to replenish U.S. missile stockpiles, which have been depleted by conflicts in the Middle East and Ukraine, weapons supplied to allies, and U.S. military operations in Iran.
Senior military commanders have warned that U.S. munitions stocks are “dangerously low,” with the Pentagon having used nearly 80% of its interceptors for a key missile-defense system since the Feb. 28 U.S.-Israeli strikes on Iran.
Raytheon Ramps Up Missile Output
In August, Raytheon landed a $22.9 billion contract to dramatically expand Tomahawk missile production. This was followed by a $2.8 billion contract awarded to RTX’s Pratt & Whitney division in 2025 to produce engines for the F-35 Lightning II fighter jet.
In the same month, the Pentagon awarded Raytheon two contracts worth a combined $1.28 billion: $745.4 million to produce Standard Missile-3 Block IIA missiles for the U.S. and Japan, and $536 million for TOW Weapon System production and engineering services.
The escalating conflicts in the Middle East and Ukraine have led to a surge in demand for cost-effective air defense solutions. In response, Lockheed Martin Corp. (NYSE:LMT) introduced a more affordable Patriot interceptor in July. In June, the company secured a seven-year contract worth up to $35 billion to quadruple THAAD interceptor production.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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