U.S. Defense Contractors Report Record Backlogs Amid Increased Military Spending

U.S. defense contractors are benefiting from increased military spending and large order backlogs amid the ongoing conflict in Iran and other global commitments. The Defense Department is restocking weapons and munitions depleted by the U.S. military's actions in Iran and support for countries including Ukraine. This has led to billions of dollars in orders from the Pentagon.

allocated $901 billion to the Defense Department for 2026. Earlier this year, the administration submitted a budget request for 2027 totaling $1.5 trillion, a 40% increase that includes funds for new ships, jets, and $18 billion for a missile defense system announced last year.

The 2027 budget was finalized before the Iran conflict began. As the war continued, the Pentagon reportedly requested an additional $200 billion in funding last month.

The five largest U.S. defense firms—Lockheed Martin, RTX, Boeing, General Dynamics, and Northrop Grumman—received $771 billion between 2020 and 2024. These companies have signed deals to resupply military stocks during the current administration. Last month, defense executives met with administration officials to discuss quadrupling production targets.

RTX ended 2025 with $107 billion in defense-specific backlogs, while Lockheed Martin reported a record $194 billion in expected orders.

A study by the Quincy Institute and Brown University found that the share of the Defense Department's budget going to private firms rose from 41% in the 1990s to 54% between 2020 and 2024. Around half of the U.S. military's most expensive missile stocks were depleted in the first seven weeks of the Iran conflict, according to an analysis by the Center for Strategic and International Studies.

The analysis estimated it would take one to four years to restock munitions. European defense spending is projected to reach €800 billion by 2030, potentially offering additional opportunities for U.S. firms despite new EU rules and growing local competitors.

“The administration’s prioritization of defense industrial-based investment and modernization spending provides a constructive backdrop as we execute.”