The Pentagon has officially cleared a massive $8.6 billion contract for Boeing BA to provide the Israeli Air Force with advanced F-15IA fighter jets. While this multi-billion-dollar deal reinforces Boeing’s status as a critical defense titan, savvy investors might look past the individual stock.
In particular, investors who seek to capitalize on such high-stakes military expansions without being exposed to the volatility of Boeing-specific headwinds may consider defense exchange-traded funds (ETFs), which hold this jet giant alongside other prime contractors and thus offer a diversified gateway to the sector’s tailwinds.
The recently won contract by Boeing, managed through the Foreign Military Sales (FMS) program, involves the production and delivery of 25 new F-15IA aircraft, with an option for 25 more. These “Eagle II” variants are tailored for Israel, featuring long-range strike capabilities and the ability to carry up to 14 tons of munitions.
The timing is highly strategic; the contract was finalized shortly after a high-profile meeting between President Trump and Prime Minister Benjamin Netanyahu in Florida. Geopolitically, the sale underscores the U.S. commitment to Israel’s air superiority amid ongoing regional tensions with Iran and its proxies. With the project slated for completion by Dec. 31, 2035, Boeing’s St. Louis facility is secured with a decade-long production runway.
Financially, this contract should bolster the Boeing Defense, Space & Security (“BDS”) segment, which engages in the research, development, production, and modification of manned and unmanned military aircraft. Notably, the BDS unit registered a solid year-over-year revenue increase of nearly 25% in the last reported quarter and is expected to continue delivering such robust performance, supported by contract wins like the $8 billion deal mentioned above.
While the $8.6 billion F-15IA contract is a massive win for Boeing’s backlog, it comes amid a persistent dilemma for investors. Notably, despite reporting a 25% revenue surge, the BDS unit’s operating profit margin remained razor-thin at just 1.7% during the third quarter of 2025. This follows a brutal 2024, where the segment lost nearly $5 billion due to cost overruns on older fixed-price contracts like the KC-46 tanker and Air Force One.
Amid this backdrop, some investors might still categorize Boeing as a high-risk bet.
In contrast, Defense ETFs offer a more strategic and “profitable” alternative. These funds will allow you to capture the upside of the recent F-15 contract win through exposure to Boeing while also balancing it with industry peers like RTX Corp. RTX or Lockheed Martin LMT who currently boast much healthier margins. It’s a way to bet on the “Trillion-Dollar Shield” of global defense spending without being weighed down by Boeing-specific hurdles.