Pentagon Plans to Acquire Over 12,000 Missiles in Five Years
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 13 2026
0mins
Source: Newsfilter
- Low-Cost Missile Procurement: The Pentagon is set to launch the Low-Cost Containerized Munitions (LCCM) program in 2027, aiming to acquire over 10,000 low-cost missiles over three years, reflecting a strategic shift towards innovative defense technologies to enhance military deployment flexibility and cost-effectiveness.
- Test Missile Acquisition: The assessment phase of the program will begin in June 2026, involving the purchase of test missiles from Anduril, CoAspire, Leidos, and Zone 5, establishing terms for future firm-fixed-price production contracts, which indicates strong support for emerging contractors by the Pentagon.
- Blackbeard Missile Contract: A separate agreement with defense startup Castelion outlines a plan for a two-year contract to purchase a minimum of 500 Blackbeard missiles once testing and validation are completed, highlighting the Pentagon's focus on hypersonic weapons, with plans to acquire over 12,000 missiles in five years.
- Increased Funding Demand: The Pentagon is ramping up requests to Congress for over $26 billion in funding for multi-year procurement contracts for critical munitions, emphasizing the urgency and significance of military equipment in response to ongoing demands from the war in Iran.
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Analyst Views on LDOS
Wall Street analysts forecast LDOS stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 131.590
Low
178.00
Averages
219.70
High
235.00
Current: 131.590
Low
178.00
Averages
219.70
High
235.00
About LDOS
Leidos Holdings, Inc. is a holding company, which operates through its wholly owned subsidiary, Leidos, Inc. (Leidos). The Company's segments include National Security & Digital, Health & Civil, Commercial & International and Defense Systems. Its National Security & Digital business provides technologically advanced services, solutions and products, as well as mission software capabilities for defense and intelligence customers in the areas of cyber, logistics, security operations and decision analytics. Its Health & Civil business provides services and solutions to federal and commercial customers in the areas of public health, care coordination, life and environmental sciences and transportation. Its Commercial & International business delivers a portfolio of products, services, and solutions aimed at securing national assets, modernizing energy and critical infrastructure, and enhancing mission outcomes. The Company serves government and commercial customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Subsea Drone Market: Kraken Robotics is at the core of the subsea drone supply chain, having announced $87 million in new orders in the first few months of 2026, focusing on providing subsea batteries for drone manufacturers, positioning itself to benefit from the rising defense budget.
- Leidos' Steady Growth: Leidos reported $17 billion in revenue over the past 12 months, a 31% increase, and secured a $2.7 billion contract for hypersonic products, indicating strong growth potential in defense technology despite a lukewarm market response to its stock.
- Emerging Investment Opportunities: With the increase in defense spending, companies like Leidos and Kraken Robotics are seen as potential investment opportunities, particularly in the fields of drones and hypersonic technology, which could yield substantial returns for investors.
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- Leidos Steady Growth: Leidos reported $17 billion in revenue over the past 12 months, a 31% increase over the last five years, and recently secured a $2.7 billion contract for hypersonic missiles, which is anticipated to generate steady cash flows and further solidify its position in the defense sector.
- Market Underestimation: Despite Leidos trading at a low P/E ratio of 11.5, indicating market undervaluation, the company's stock buybacks and steady business growth, combined with potential developments in hypersonic technology, suggest it could be a “hidden gem” for investors.
See More
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- Contract Scale: This contract is a multiple-award indefinite delivery, indefinite quantity contract with a total ceiling value of $10 billion, although individual task order values remain undisclosed, providing Leidos with substantial revenue potential.
- Technical Support: Leidos will focus on cloud and data center services, application development, network and telecommunications services, and customer support, aiming to enhance the State Department's cybersecurity, modernize applications and infrastructure, and ensure the security of diplomatic operations.
- Strategic Significance: The awards not only add to Leidos' backlog of federal IT modernization and cybersecurity work but also align with U.S. government priorities in addressing rising cyber threats and migrating to cloud systems, highlighting the company's strategic importance in an increasingly technology-driven environment.
See More
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See More
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- Testing and Evaluation Plan: The agreements outline an experimentation campaign set to begin in mid-2026, with test missiles acquired from participating companies, and the results will inform formal military assessments that will influence full-scale procurement decisions, ensuring alignment with military demand.
- New Industry Participation Model: Some participating companies are expected to reach production scale through private capital investment rather than direct government funding, marking a shift in defense procurement models aimed at accelerating weapons development and procurement processes.
- Industrial Capacity Enhancement: This initiative is part of a broader effort to increase U.S. munitions production capacity, focusing on creating a flexible industrial base capable of scaling output during periods of heightened demand, reflecting the Pentagon's ongoing interest in leveraging commercial manufacturing approaches.
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