USAF’s 2026 Budget Slashes F-35 Buy, Boosts Next-Gen Fighter Funding
Explore how the USAF’s 2026 budget proposal cuts F-35 purchases in half while ramping up investment in the next-gen F-47 fighter, reshaping defense priorities amid Capitol Hill debates.
Key Takeaways
- USAF plans to buy 24 F-35s in 2026, half of 2025’s 44 jets
- Next-gen F-47 fighter jet funding jumps to $3.5 billion
- Reconciliation bill adds billions for B-21 bomber and F-15EX jets
- Cutting F-35 buys risks disrupting Lockheed Martin’s supply chain
- Space Force procurement budget shrinks but R&D funding surges
In a move that’s turning heads on Capitol Hill and Wall Street alike, the U.S. Air Force’s 2026 budget proposal slashes its F-35 fighter jet purchases by half, from 44 jets in 2025 to just 24 next year. This dramatic pivot isn’t just about cutting costs—it’s a strategic bet on the future, funneling billions into the next-generation F-47 fighter and other advanced programs. Delivered quietly to Congress amid ongoing reconciliation debates, this budget reshapes the Air Force’s procurement landscape. While the F-35 remains a cornerstone, the shift signals a broader modernization push, balancing legacy systems with cutting-edge technology. But what does this mean for defense contractors like Lockheed Martin, and how will it impact America’s aerial dominance? Let’s unpack the numbers, the risks, and the bold bets behind the Pentagon’s unconventional 2026 spending plan.
Halving F-35 Purchases
Imagine the Air Force’s fighter jet lineup as a finely tuned orchestra, with the F-35 as the lead violinist. Now, picture cutting that lead’s performance in half overnight. That’s exactly what the 2026 budget proposal does—dropping the planned F-35 buy from 44 jets in 2025 to just 24 next year. The cost? Nearly $4 billion, down from $4.8 billion in 2025, but not proportionally. Why? Because economies of scale suffer when you buy fewer jets, meaning each plane costs more. This isn’t just a budget tweak; it’s a seismic shift that could unsettle the entire F-35 supply chain, which includes over 1,900 companies beyond Lockheed Martin.
Top Air Force leaders have long called the F-35 the “quarterback” of their fighter fleet, tying together advanced data and multiple assets. Cutting purchases this severely risks falling behind in modernizing an aging fleet, especially as older F-15s and F-16s retire. Experts warn that buying only 24 F-35s, even with 21 F-15EX jets funded through reconciliation, leaves the Air Force far short of its goal to buy 72 fighters annually. The sting of an empty savings account is one thing, but the sting of an aging fighter fleet is a national security concern.
Boosting Next-Gen Fighters
While the F-35 buy shrinks, the budget proposal pumps up funding for the next-generation F-47 fighter jet, unveiled earlier this year by President Trump. The combined base and reconciliation budget allocates $3.5 billion to the F-47, signaling a strategic pivot toward future air dominance. This isn’t just about new toys; it’s about leapfrogging current technology to stay ahead in an era where drones and advanced missiles are rewriting the rules of engagement.
The F-47’s rise comes alongside a significant boost for other advanced programs like the B-21 stealth bomber, which receives $4.7 billion in combined funding, and the resurrection of the ARRW boost-glide missile program. The Air Force is clearly betting big on innovation, even as it trims legacy purchases. This approach reflects a broader defense trend: investing heavily in research and development to build tomorrow’s battlefield advantage, while managing today’s budget constraints.
Supply Chain Risks Unveiled
Cutting F-35 purchases isn’t just a numbers game—it’s a supply chain earthquake. The F-35 program supports a sprawling network of over 1,900 companies, from aerospace giants like Lockheed Martin to small specialized suppliers. When the Air Force slashes orders, this network faces whiplash, with production lines slowing and workforce stability threatened.
Doug Birkey of the Mitchell Institute warns that such cuts could irreversibly damage the defense industrial base. Without steady, predictable orders, suppliers lose access to long-lead materials and skilled labor, making it harder to ramp production back up when needed. This isn’t just about economics; it’s about national readiness. The defense sector’s delicate ecosystem thrives on consistency, and sudden budget shifts risk unraveling years of progress.
Congressional Pushback and Market Impact
The Pentagon’s quiet rollout of the 2026 budget, without the usual fanfare, contrasts sharply with Congress’s proactive stance. The House Appropriations Committee advanced its own defense spending bill, aiming to maintain a more traditional F-35 buy—42 jets for the Air Force, plus additional purchases for the Marine Corps and Navy. This tug-of-war highlights the political and strategic tensions underlying defense budgeting.
Lockheed Martin’s stock felt the pinch immediately, dropping over 6% on news of the potential cuts before clawing back some losses. Investors are watching closely, aware that procurement decisions ripple through the defense industry and broader markets. For the Air Force, the final budget will balance modernization ambitions with industrial realities and political pressures—a high-wire act with billions on the line.
Space Force Budget Shifts
While the Air Force juggles fighter jets and bombers, the Space Force faces its own budget drama. Its procurement budget is set to shrink from $3.9 billion in 2025 to $3.4 billion in 2026, even after reconciliation boosts it to $3.7 billion. However, research and development funding tells a different story, soaring from $18.5 billion in 2025 to a combined $29 billion with reconciliation.
This surge funds projects like the Golden Dome missile-defense system and classified R&D efforts, including $6.4 billion earmarked for Long Range Kill Chains. The Space Force’s pivot toward advanced missile defense and surveillance reflects a strategic shift from traditional procurement to cutting-edge innovation. It’s a reminder that in defense budgeting, sometimes the biggest bets are on the unseen technologies shaping future conflicts.
Long Story Short
The USAF’s 2026 budget proposal is a high-stakes gamble on the future of air combat, halving F-35 purchases while turbocharging next-gen fighter development. This shift reflects a balancing act between maintaining current capabilities and investing in breakthrough technologies like the F-47 and B-21 bomber. Yet, the cuts risk unsettling the vast supply chain that supports the F-35, potentially slowing production and innovation. For Lockheed Martin, the ripple effects are already visible in stock fluctuations. Meanwhile, the Space Force faces a tighter procurement purse but sees a surge in R&D funding, underscoring a strategic pivot toward missile defense and classified projects. For policymakers and defense watchers, the lesson is clear: modernization isn’t just about buying more jets—it’s about choosing where to place your bets in a rapidly evolving battlefield. As Congress debates the reconciliation bill, the final budget will reveal how America plans to keep its edge in the skies and beyond. The relief of a funded future depends on these critical decisions.