Pentagon Proposes $2.9B AIM-260 Funding, Pressure on RTX’s AMRAAM Sales
Pentagon budget proposal ramps AIM-260 funding to $2.9 billion in 2027, up from $894 million this year, signaling accelerated deployment of next-generation missile likely to supplant RTX’s 30-year-old AIM-120 AMRAAM. A concurrent $3.1 billion Australian order underscores rising allied demand and potential pressure on AMRAAM sales.
1. Pentagon Budget Proposal Details
The Pentagon’s fiscal 2027 budget request allocates $2.9 billion to the AIM-260 air-to-air missile program, a sharp increase from the $894 million earmarked in the current fiscal year, indicating an accelerated shift toward next-generation air combat capability.
2. Impact on RTX's AIM-120 AMRAAM
The funding surge for AIM-260 threatens to displace RTX’s longstanding AIM-120 AMRAAM, which has been in service since 1993, potentially eroding a core revenue stream as production scales up.
3. Allied Demand and Export Implications
A parallel $3.1 billion sale for 460 AIM-260 missiles and equipment to Australia highlights early international adoption that could further reduce demand for the AIM-120 platform.
4. RTX’s Strategic Response and Market Position
RTX holds multi-year missile defense contracts and is exploring upgrades and new systems, but must accelerate development of an AMRAAM successor to maintain market share against the AIM-260 rollout.