Government contracts move defense stocks less than their headline values suggest. Most large awards are expected long before they are announced, their money is paid out over years, and investors judge them through backlog, margins and guidance in quarterly reports. On July 30, 2026, Lockheed Martin (LMT) received a $53.9 billion change to its PAC-3 missile contract, and its shares rose 1.5% the next day; a week earlier, on July 23, its second-quarter report lifted the stock 10.5% [4][7][12]. DataPorium data show Lockheed Martin received $74.9 billion of federal contract obligations in fiscal 2025, the most of any listed company [1].
How are federal contracts awarded and disclosed?
Federal agencies buy through contracts that are either competed among bidders or awarded to a single source. Large weapons programs often use indefinite-delivery/indefinite-quantity (IDIQ) contracts, which set terms and a maximum value up front and then place individual orders, and multiyear procurement, which commits to buying a system over several years.
The Defense Department, which has also used the secondary name Department of War since an executive order of September 5, 2025, announces contracts valued at $7.5 million or more each business day at 5 p.m. Eastern time on war.gov [5][8]. Each entry names the company, the contract type, the value, where the work is done and how much money was obligated at award. Because the list comes out after the market closes, the stock reaction shows up the next trading day.
All federal contract actions are also reported to the Federal Procurement Data System and published on USAspending.gov. Defense Department data there are subject to a 90-day delay, so totals for the most recent quarter are incomplete for some time [9]. DataPorium's government contracts screener builds on this official data and flags fiscal years that can still change [1].
What is the difference between obligations and contract value?
An obligation is a binding commitment of money: the government has promised to pay that amount for work under the contract. The headline value of a contract is often a ceiling, the most that could be spent if every option and order is used. The two can differ by billions of dollars.
Lockheed Martin's PAC-3 interceptor contract shows the gap:
| Date | Action | Value announced | Obligated at award |
|---|---|---|---|
| January 6, 2026 | Framework agreement to raise PAC-3 MSE capacity from about 600 to 2,000 a year over seven years | None stated | None |
| April 9, 2026 | Firm-fixed-price production contract | $4,761,000,000 | $4,761,000,000 ($264.96 million Army, $4,496.04 million foreign military sales) |
| July 30, 2026 | Modification converting it to a seven-year multiyear procurement | $53,859,843,289 (cumulative face value $58,620,843,289) | $0 |
Sources: Lockheed Martin [11]; Department of War contract announcements [6][7].
The July modification raised the contract's ceiling to $58.6 billion, but no money was obligated that day [7]. DataPorium's award records show $4.76 billion obligated on the contract so far, the amount set in April [2].
Palantir Technologies (PLTR) shows the same split on the software side. On July 31, 2025, the Army announced an enterprise agreement that folds 75 contracts into one, for up to 10 years, with a $10 billion cap; the Army said the amount "represents the maximum potential value of the contract, not any specific obligations or commitments" [10]. The largest order under it in DataPorium's records, a Chief Digital and AI Office task order awarded November 21, 2025, carries $637.6 million of obligations [3].
How much do the biggest contractors receive?
| Company | FY2023 | FY2024 | FY2025 | FY2026 (incomplete) |
|---|---|---|---|---|
| Lockheed Martin (LMT) | $69.3B | $50.8B | $74.9B | $49.7B |
| RTX (RTX) | $34.4B | $30.4B | $37.4B | $33.4B |
| General Dynamics (GD) | $27.0B | $24.8B | $35.8B | $26.9B |
| Northrop Grumman (NOC) | $15.6B | $17.3B | $12.9B | $12.3B |
| Palantir Technologies (PLTR) | $0.35B | $0.54B | $1.02B | $1.98B |
Source: DataPorium Government Contracts, federal contract obligations by fiscal year (October to September), data as of October 10, 2026; fiscal 2026 still incomplete because of the 90-day reporting delay [1][9].
Obligations jump around from year to year because large multiyear buys are funded in lumps. In fiscal 2025, the three largest recipients among listed companies were Lockheed Martin, RTX and General Dynamics, with 18.9%, 9.4% and 9.0% of the $396.9 billion obligated to 649 listed companies [1]. Palantir's obligations roughly doubled in fiscal 2025, to $1.02 billion, and reached $1.98 billion in fiscal 2026 before late defense records arrive [3].
What is backlog, and why do investors watch it?
Backlog is the value of work a company has been awarded but not yet turned into revenue. Funded backlog is covered by money already authorized and appropriated; unfunded backlog is awarded but still waits for appropriations. Northrop Grumman (NOC), for example, excludes unexercised options and IDIQ contracts until an option is exercised or a task order is placed [15]. Because backlog converts into sales over several years, a big award mainly changes how long and how predictable future revenue is.
| Company | Backlog (end of Q2 2026) | Q2 2026 sales | Note |
|---|---|---|---|
| Lockheed Martin | $230.4B (June 28, 2026) | $20.1B | Up from $193.6B on December 31, 2025 |
| RTX | $289B | $24.7B | $119B defense, $170B commercial |
| General Dynamics | $136.5B | $14.1B | $186.9B including estimated potential contract value |
| Northrop Grumman | $104.7B (June 30, 2026) | $10.9B | $45.9B funded, $58.7B unfunded |
Sources: second-quarter 2026 earnings releases [12][13][14][15]. Third-quarter reports, released in late October, update these figures.
Lockheed Martin's backlog in its Missiles and Fire Control segment rose from $46.7 billion at the end of 2025 to $87.9 billion at June 28, 2026, which the company tied in part to a $35 billion multiyear contract for THAAD interceptors [12]. Palantir does not report a backlog figure in its earnings release; it reported U.S. government revenue of $809 million in the second quarter of 2026, up 90% from a year earlier [16].
Why do big contract awards often barely move the stock?
- They are expected. The PAC-3 multiyear contract followed a framework announced on January 6, 2026, and a $4.76 billion award in April [6][11]. When Lockheed Martin's stock reacted, it was to details already largely known: shares fell 1.6% on April 10, the day after the first award, and rose 1.5% on July 31 [4].
- The money comes over years. The PAC-3 work runs to March 31, 2035 [7]. Spread over about nine years, even $53.9 billion is roughly $6 billion a year, against Lockheed Martin's $75.0 billion of sales in 2025 [4].
- Profit matters more than revenue. Fixed-price contracts leave cost overruns with the company. Quarterly reports, where charges, margins and guidance appear, tend to move the shares more: Lockheed Martin rose 10.5% on July 23, 2026, the day it reported second-quarter results [4][12].
- Size relative to the company matters. A $100 million order is noise for a company with $20 billion of quarterly sales, but larger for a smaller contractor. Palantir's whole fiscal 2025 obligations were $1.02 billion [3].
How do budgets and continuing resolutions affect defense stocks?
Contracts can only be funded with money Congress appropriates. When the fiscal year starts on October 1 without full-year appropriations, Congress usually passes a continuing resolution (CR), a temporary law that generally funds agencies at the prior year's rate. Fiscal 2027 began under such a law: H.R. 6500, signed on September 2, 2026, funds agencies through December 11, 2026 [17].
CRs matter for contractors because they restrict starting new programs and increasing production rates, according to the Government Accountability Office. GAO found in 2021 that the Defense Department had started 11 of the previous 12 fiscal years under a CR, and that the services often delay contract starts and purchases until later in the year [18]. For investors, that can shift the timing of awards and revenue more than the total.
For defense stocks, the contract ceiling makes the headline, but obligations, backlog conversion and margins drive the earnings that move the share price.
Frequently asked questions
Where can I see new defense contract awards?
The Department of War (Department of Defense) posts contracts of $7.5 million or more each business day at 5 p.m. on war.gov, and all awards appear on USAspending.gov, with a 90-day delay for defense data [5][9]. DataPorium shows awards and obligations by company [1].
What does a contract ceiling mean?
It is the most the government could spend under the contract if all options and orders are used. The Army's Palantir enterprise agreement has a $10 billion ceiling, which the Army says is not an obligation [10].
Which company gets the most federal contract money?
Among listed companies, Lockheed Martin received the most in fiscal 2025, $74.9 billion of obligations, ahead of RTX at $37.4 billion and General Dynamics at $35.8 billion [1].
How does a continuing resolution affect defense contractors?
It generally funds agencies at the prior year's rate and restricts new program starts and production increases, which can delay awards. Fiscal 2027 is funded by a CR through December 11, 2026 [17][18].
Sources & References
- [1] DataPorium Government Contracts screener (federal contract obligations of listed companies, fiscal years 2015-2026)
- [2] DataPorium Lockheed Martin government contracts (awards and obligations by fiscal year)
- [3] DataPorium Palantir government contracts (awards and obligations by fiscal year)
- [4] DataPorium Lockheed Martin stock page (daily prices)
- [5] U.S. Department of War, Contracts (accessed October 13, 2026)
- [6] U.S. Department of War, Contracts for April 9, 2026
- [7] U.S. Department of War, Contracts for July 30, 2026
- [8] The White House, Restoring the United States Department of War, Executive Order 14347 (September 5, 2025)
- [9] Federal Procurement Data System, DoD Data Availability (accessed October 13, 2026)
- [10] U.S. Army, U.S. Army Awards Enterprise Service Agreement to Enhance Military Readiness and Drive Operational Efficiency (July 31, 2025)
- [11] Lockheed Martin, Lockheed Martin and Department of War Advance Landmark Acquisition Transformation to Accelerate PAC-3 MSE Production (January 6, 2026)
- [12] Lockheed Martin, Form 8-K Exhibit 99.1, Second Quarter 2026 Financial Results (July 23, 2026)
- [13] RTX, Form 8-K Exhibit 99, Second Quarter 2026 Results (July 23, 2026)
- [14] General Dynamics, General Dynamics Reports Second-Quarter 2026 Financial Results (July 29, 2026)
- [15] Northrop Grumman, Form 8-K Exhibit 99.1, Second Quarter 2026 Financial Results (July 21, 2026)
- [16] Palantir Technologies, Form 8-K Exhibit 99.1, Q2 2026 Results (August 3, 2026)
- [17] The White House, Congressional Bill H.R. 6500 Signed into Law (September 2, 2026)
- [18] U.S. Government Accountability Office, DOD Has Adopted Practices to Manage within the Constraints of Continuing Resolutions, GAO-21-541 (September 13, 2021)
