- President Donald Trump suggested Thursday that the Pentagon's budget could be cut in half if the U.S., China, and Russia can reach some kind of deal. While the F-35 has taken flak as the most expensive acquisition program, an analyst said it looks "relatively affordable" for the capabilities that it brings.
President Donald Trump and Elon Musk's DOGE team look to slash defense spending, but a Wall Street analyst thinks the Pentagon's most expensive weapons program delivers plenty of bang for the buck.
That would be Lockheed Martin's F-35 stealth fighter, which has previously drawn Musk's scorn as being inferior to drones. After including the expenses to develop, manufacture, operate, and maintain its eventual fleet of F-35s over the fighter’s total service life, the Defense Department estimates the program will cost $1.8 trillion.
Last week, Trump signaled that DOGE will soon take on the Pentagon and its $850 billion budget. And then on Thursday, he dropped a bombshell, suggesting that spending could be halved if the U.S., China, and Russia can reach some kind of deal.
"When we straighten it all out, then one of the first meetings I want to have is with President Xi of China and President Putin of Russia, and I want to say let’s cut our military budget in half. And we can do that, and I think we’ll be able to do that," he said.
Top defense stocks like Lockheed, Northrop Grumman, and RTX sold off after the comments. Meanwhile, defense officials are reportedly offering up sacrificial lambs to avoid even steeper cuts.
The Pentagon first awarded Lockheed the F-35 contract in 2001, and the program has been a perennial punching bag owing to cost overruns, delays, and its enormous price tag.
In a note on Wednesday, analysts at JPMorgan acknowledged concerns about potential cuts to the program, but maintained it's a critical capability for the U.S. and its allies.
"For all the criticism, however, F-35 still delivers significant capability in a relatively affordable way and this is why it continues to do well in international competitions," they wrote. "Unmanned capabilities merit continued investment but they are far from capable of replacing F-35 and may not be for some time."
Hundreds of F-35s are already in use in the U.S. military and among top allies around the world. Over its production cycle, the Pentagon plans to buy about 2,400 F-35s for the Air Force, Navy, and Marine Corps, to replace aging, non-stealth fighters.
In addition to F-35's stealth, the Pentagon has also touted its electronic warfare and intelligence-gathering features as well as its role as the "quarterback" of the battle space, collecting data and dispersing it to other warfighters.
Given the F-35's superior capabilities, JPMorgan said the Pentagon should continue buying upgraded versions of the fighter, adding that even if the U.S. slows its procurement, purchases by allies can keep the overall production rate steady to avoid an uptick in unit costs.
Indeed, Trump also said on Thursday that the U.S. is increasing weapons sales to India and is paving the way to eventually provide the F-35.
To be sure, there's plenty of room for improvement at the Pentagon. But even more than cutting costs, Musk and DOGE could reform DoD by making it more efficient and introducing new technology, former Navy Secretary Richard Danzig said in a recent Washington Post op-ed.
"Musk is the great master, not at inventing these technologies but at something equally important, and rarer: applying technology to solve old problems in new ways," he wrote.
