U.S. President Donald Trump awarded Boeing (BA.N), opens new tab on Friday the contract to build the U.S. Air Force's most sophisticated fighter jet yet, handing the company a much-needed win and boosting its shares.

The Next Generation Air Dominance program will replace Lockheed Martin's F-22 Raptor with a crewed aircraft built to enter combat alongside drones.

Trump, the 47th president, announced the new jet's name, the F-47.

"We've given an order for a lot. We can't tell you the price," Trump told reporters in the Oval Office.

Boeing shares rose 5% after the U.S. company beat out Lockheed Martin (LMT.N), opens new tab for the deal. Lockheed's shares fell nearly 7%.

"Our allies are calling constantly," Trump added, saying foreign sales could be an option. "They want to buy them also."

For Boeing, the win marks a reversal of fortune for a company that has struggled on both the commercial and defense sides of its business. It is a major boost for its St. Louis, Missouri, fighter jet production business.

The loss is another blow to Lockheed after it was eliminated from the competition to build the Navy's next-generation carrier-based stealth fighter, and amid growing discontent from the Pentagon over delays in upgrading its F-35 fighter jet.

In recent weeks, Trump met with Lockheed CEO Jim Taiclet to discuss the F-35, according to three sources.

The engineering and manufacturing development contract is worth more than $20 billion. Boeing's win means it will make the jet fighter and receive orders worth hundreds of billions of dollars over the contract's multi-decade lifetime.

Reuters was first to report Boeing's victory.

"We recognize the importance of designing, building and delivering a 6th-generation fighter capability for the United States Air Force," Steve Parker, who leads Boeing's defense business, said in a statement. "In preparation for this mission, we made the most significant investment in the history of our defense business."

The plane's design remains a closely held secret, but would likely include stealth, advanced sensors, and cutting-edge engines.

"Compared to the F-22, the F-47 will cost less and be more adaptable to future threats - and we will have more of the F-47s in our inventory," said Chief of Staff of the Air Force, General David Allvin.

NGAD was conceived as a "family of systems" centered around a sixth-generation fighter to counter adversaries such as China and Russia.

Allvin said the F-47 will have significantly longer range, more advanced stealth, and will be more easily supported than the F-22.

MAJOR WIN

Boeing's commercial operations have struggled as it attempts to get its best-selling 737 MAX jet production back up to full speed, while its defense operation has been weighed down by underperforming contracts for mid-air refueling tankers, drones and training jets.

"The win is a major boost for the company, which has struggled with cost overruns, schedule delays and execution on other Department of Defense programs," said Roman Schweizer, an analyst at TD Cowen.

Cost overruns at the KC-46 mid-air refueling tanker program have surpassed $7 billion in recent years, while another fixed-price contract to upgrade two Air Force One planes has created a $2-billion loss for the top-5 U.S. defense contractor.

Boeing's unit that makes passenger jets has faced intense scrutiny since a series of crises including a mid-air emergency in January 2024 involving a new Alaska Airlines 737 MAX 9 missing four key bolts. In January, Boeing reported an $11.8 billion annual loss - its largest since 2020 - due to problems at its major units, along with fallout from a strike that shuttered production of most of its jets.

Boeing has also ceded ground to Airbus (AIR.PA), opens new tab in the delivery race and entered the crosshairs of regulators and customers following missteps. The Federal Aviation Administration in early 2024 imposed a monthly production cap.

"While disappointed with this outcome, we are confident we delivered a competitive solution," Lockheed said in a statement. "We will await further discussions with the U.S. Air Force."

While Lockheed could still protest the government's award to Boeing, the fact Trump announced the deal in a high-profile press conference could reduce the possibility of a public airing of arguments against the agreement from the Bethesda, Maryland-based defense firm.

Boeing's award drew congratulations from Democratic Senator Mark Kelly but he warned: "A program of this size and complexity requires careful oversight to make sure it doesn't fall behind or have cost overruns."

Billionaire and presidential adviser Elon Musk has voiced skepticism about the effectiveness of crewed high-end fighters, saying cheaper drones were a better option.