New Stealth Bomber Funding Puts Spotlight on Defense ETFs with Northrop Grumman Exposure

FomoAnxiety · 2026-02-24T21:11:44+00:00

The U.S. Air Force and Northrop Grumman are increasing B-21 Raider stealth bomber production by 25% to expedite deliveries. The $4.5 billion funding will enhance manufacturing without compromising quality. The B-21 aims to replace older bombers and is crucial for U.S. defense, benefiting related defense ETFs.

FomoAnxiety

2026-02-24 21:11:44

Abstract generation in progress

The U.S. Air Force and Northrop Grumman NOC +0.50% ▲ have agreed to increase production capacity for the B-21 Raider stealth bomber by 25%, so that the military can receive the aircraft more quickly. According to a February 23 Air Force release, the expansion will use $4.5 billion in funding that was previously approved under the “One Big Beautiful Bill.” By increasing the number of aircraft that can be built each year, the program hopes to reduce delivery timelines without sacrificing quality or budget discipline.

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The B-21, developed by Northrop Grumman, is already in low-rate initial production, which began after a contract award in January 2024. Deliveries started on schedule in 2025, and the first operational aircraft is expected to arrive at Ellsworth Air Force Base in South Dakota in 2027. Officials say that the bomber is essential to U.S. deterrence. While the total number of aircraft remains classified, the Air Force has previously indicated that it plans to buy at least 100 B-21s to replace older B-1B and B-2 bombers over time.

For investors, this program demonstrates how important Northrop Grumman is within the defense industry and, by extension, within several defense-focused exchange-traded funds. For example, the iShares U.S. Aerospace & Defense ETF ITA +0.92% ▲ , the Invesco Aerospace & Defense ETF PPA +1.27% ▲ , and the SPDR S&P Aerospace & Defense ETF XAR +1.55% ▲ all hold significant positions in Northrop Grumman, thereby giving investors indirect exposure to programs like the B-21. As defense spending rises and next-generation systems move into production, these ETFs are likely to benefit.

Which Defense ETF is the Better Buy?

Turning to Wall Street, among the three defense ETFs mentioned above, analysts think that XAR has the most room to run. In fact, XAR’s price target of $324.73 per share implies 14.6% upside potential.

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