Northrop Grumman Corporation

Northrop Grumman Corporation is an American aerospace and defense prime contractor whose four segments — military aircraft, missiles and munitions, mission systems, and space — generated $41.95 billion of revenue in fiscal 2025, about 84% of it from the U.S. government. It is the prime contractor on the B-21 Raider stealth bomber and the Sentinel intercontinental ballistic missile, the two programs at the center of the U.S. nuclear triad's modernization, and it is a growing force in solid rocket motors and missile defense at a moment when both are being bought at scale.

This is a story about a franchise that spent a decade buying optionality and is now being asked to convert it. Northrop carries a record $104.7 billion of backlog, a book-to-bill ratio management now expects to reach at least 1.25x this year, and a product set — B-21, Sentinel, solid rocket motors, IBCS, national-security space — that maps nearly one-for-one onto the programs Washington is funding most aggressively. It is also spending at a rate it has not spent at before: $1.85 billion of capital expenditure in 2026, on the way to roughly 4.5% of sales in 2027 and 2028, to build the factories that the backlog assumes will exist.

The file turns on a single question: whether that conversion happens before the cost of financing it — and the fixed-price development risk embedded in the growth programs themselves — catches up with the company. Northrop is not cheap by defense-prime standards, and the market is already paying for the production story. What it has not yet settled is how much of that story is a moat and how much is a capex cycle wearing a backlog story's clothes.