If you've been wondering whether the U.S. government might become a shareholder in America's biggest defense contractors, Boeing Co. (BA) has some news for you: probably not.
Steve Parker, CEO of Boeing Defense, Space & Security, clarified on Saturday that President Donald Trump's plan to acquire government equity stakes in strategic sectors isn't meant for the heavy hitters. Speaking at the Reagan National Defense Forum in Simi Valley, California, Parker explained that companies like Boeing, Lockheed Martin Corp. (LMT), RTX Corp. (RTX), and Northrop Grumman Corp. (NOC) aren't on the equity stake menu.
The Small Fish, Not the Whales
According to Parker, the government's equity initiative is really about the smaller players in the defense ecosystem. Think supply chain companies that might benefit from federal investment as a growth catalyst, not the established giants already pulling in billions from Pentagon contracts.
"It really only applies on the supply chain, particularly for the smaller companies coming through where that might be a way forward for them. I don't think it really applies to the Primes," Parker said during the forum.
Translation: If you're already a "Prime" contractor building fighter jets and billion-dollar weapons systems, Washington isn't looking to buy into your business. Parker even highlighted Boeing's substantial investments in St. Louis, Missouri, where the company manufactures fighter jets, seemingly to underscore that major contractors are doing just fine on their own.
A Different Tune Than Earlier This Year
Parker's comments mark a notable shift from what we heard back in August. At that time, U.S. Commerce Secretary Howard Lutnick floated the idea that the Trump administration might consider taking equity stakes in major defense firms. That possibility had given defense stocks a nice little boost.
Now it appears those earlier signals were either misunderstood or the strategy has evolved. Either way, the big defense contractors can relax about Uncle Sam becoming a board member.
Where the Government Is Actually Investing
While major defense primes might be off the table, the Trump administration's supply chain security strategy is very much in motion elsewhere. The government has already secured equity stakes in five major publicly traded companies, including Intel Corp. (INTC) and MP Materials Corp. (MP).
The focus makes sense when you think about it. Critical minerals companies are essential for manufacturing high-tech goods and defense systems. If you can't source the raw materials domestically, your entire supply chain becomes vulnerable to geopolitical disruption.
Beyond materials, the administration is also in discussions with U.S. quantum computing firms about potential government stakes in exchange for federal funding. Quantum computing represents the next frontier in technological competition, and Washington clearly wants to ensure American companies lead the way without depending on foreign capital or supply chains.
So while Boeing shareholders won't be sharing their ownership with the federal government anytime soon, the broader trend toward strategic government investment in critical industries is definitely real. It's just aimed at shoring up the foundation of the defense industrial base, not taking stakes in the skyscrapers already built on top of it.