U.S. Navy Orders $25 Billion Worth of Missile Interceptors

The U.S. Navy has signed a five-plus-two year deal with Raytheon for up to $25 billion worth of SM-6 multipurpose interceptor missiles. This SM-series variant is designed for long range anti-air warfare and has proven capability for shooting down cruise missiles, drones, and ballistic missiles, plus a secondary application as an antiship missile - all at lower cost than an SM-3.

During the high-intensity phase of the war with Iran this year, the U.S. military's global stockpiles of all high-end interceptors (Patriot, THAAD, SM-3, SM-6) substantially declined, according to the Congressional Budget Office. The office estimates that "the United States has probably used between one-half and two-thirds of its inventory of those munitions since June 2025."

The size and multiyear structure of the new contract is is intended to correct that deficit, providing the long-term visibility that defense contractors need in order to scale up production. As of yet, Congress still has to agree to fund the contract (and others like it) with appropriations. A continuing resolution environment is expected to extend through at least early December, without a full FY2027 defense budget.

Pricing from the FY2025 budget request puts the value of one SM-6 at roughly $6 million for procurement only (CBO estimates the price to be lower, at $4 million). Assuming a comparable cost structure going forward, the award would yield a production rate many times higher than the previous 125-unit-per-year contracts.

“Combat credibility depends on having enough weapons, produced at the speed and scale the Fleet requires,” said Adm. Daryl Caudle, Chief of Naval Operations in a statement. “This SM-6 award gives industry the demand signal and stability to expand production, strengthen the munitions industrial base, and build the magazine depth our Fleet needs."

In a parallel but far larger deal, the U.S. Army has committed to pay up to $59 billion for additional Patriot interceptors, the standard go-to ballistic missile defense munition for shoreside applications.

The Army is also heavily augmenting its antiship capability, investing in a new class of long range missiles capable of tracking and hitting moving maritime targets - a basic requirement for a Western Pacific contingency. A prototype award round was announced Tuesday for competing missile designs from Anduril, RTX, Castelion, Lockheed Martin and Mach Industries.