The U.S. Navy has selected Boeing Company (NYSE: BA) to develop the F/A-XX, its next-generation sixth-generation fighter. The program is expected to involve more than $20 billion in full-scale development and the creation of multiple test aircraft, with a first flight targeted for the 2030s. This contract award highlights the Gabelli Commercial Aerospace & Defense ETF (NYSE: GCAD).

GCAD provides exposure to a broad range of companies across the aerospace and defense supply chain. The fund holds major defense names including Boeing, Lockheed Martin Corp (NYSE: LMT), RTX Corp (NYSE: RTX), Northrop Grumman Corp (NYSE: NOC), and L3Harris Technologies, Inc (NYSE: LHX). It also includes suppliers involved in components, materials, and systems.

Tony Bancroft, portfolio manager of GCAD at Gabelli Funds, noted that the new program could have a wider industry impact. He stated that another large, manned program is net-positive for the industry, benefiting sectors such as engines, sensors, composites, and mission systems.

This award is significant for Boeing because the company is now developing both of the U.S. military’s major crewed sixth-generation fighter programs. Boeing was previously selected for the Air Force’s F-47 program and will now develop the Navy’s F/A-XX. Bancroft noted that the two programs could share technology and infrastructure, allowing Boeing St. Louis to benefit from scale and learning curves. However, he also pointed out that this creates execution risk, as Boeing will have to manage two highly complex fighter programs alongside its tanker and trainer programs.

The program addresses a longer-term capability gap for the Navy. Bancroft highlighted the aging F/A-18 Super Hornet fleet and the challenge of operating aircraft carriers against increasingly sophisticated anti-access and area-denial systems. He estimates the F/A-XX could provide roughly 25% more organic range to address the range and payload limitations of existing carrier-based aircraft.

Bancroft also discussed the role of human pilots in the drone era. He argued that the Navy is likely to retain a human operator due to the challenges posed by electronic warfare and disrupted communications. He noted that heavy electronic warfare and denied communications environments are why the Navy is likely keeping a human in the loop for command of local drone swarms over directional line-of-sight links.

For investors, the key question is whether the F/A-XX award becomes the beginning of a larger multiyear defense spending cycle. Factors to watch include Boeing’s execution across two fighter programs, engine and supplier capacity, the commonality of the F/A-XX with the F-47, and the timeline for integrating Collaborative Combat Aircraft (CCA). The article emphasizes that Boeing’s $20 billion fighter award could have implications well beyond a single stock, as GCAD offers exposure to the wider industrial base required to build the next generation of U.S. military aviation.