US Air Force awards Boeing $2 bln contract for two large MUOS satellites

By Rich Smith, The Motley Fool Published: July 25, 2026, 9:25 AM UTC

The Small Satellite Revolution

Amazon (NASDAQ: AMZN) is building a constellation of more than 3,000 small "Amazon Leo" satellites to deliver broadband internet from low Earth orbit. Blue Origin, the Jeff Bezos-founded aerospace company, plans to launch its own constellation of 5,400 small satellites targeting enterprise, data center, and government customers.

Then there is Starlink. With approximately 10,800 small satellites already in orbit, the SpaceX (NASDAQ: SPCX)-owned satellite communications business dwarfs both Amazon Leo and Blue Origin Terawave combined. Taken together, these projects reflect a widespread industry belief that large satellites are becoming obsolete—and small satellites represent the future.

U.S. Air Force Takes a Different Approach

Replacing large satellites with smaller ones makes intuitive sense on multiple fronts:

• Security: A constellation of thousands of small satellites is harder for hackers, pirates, or hostile foreign powers to disable or destroy than a network of a few dozen multi-ton satellites in geostationary orbit.
• Technology: With processor speeds accelerating and launch costs declining, it is practical to build many inexpensive, short-lived satellites that can be iterated, updated, and replaced over time—rather than committing to a single large satellite that may become obsolete within a year of launch.

Yet the U.S. Air Force has signaled that large satellites still have a role. Last month, in the midst of the global shift toward small satellite constellations, the Air Force awarded Boeing (NYSE: BA) $2 billion to build two large Mobile User Objective System (MUOS) satellites, expected to remain in service through 2035.

What Is MUOS?

Originally developed by Lockheed Martin (NYSE: LMT)—which also bid on this new contract and lost—MUOS is an ultra-high-frequency communications system. Boeing describes it as "designed to sustain and improve a critical communications capability used by military users operating on the ground, at sea and in the air, especially in places where reliable connections are harder to maintain."

The existing MUOS network consists of five Lockheed-built satellites. Boeing's new satellites will supplement the current system and ensure continuity as Lockheed's original satellites begin to age out of service.

What This Means for Space Investors

The Air Force is indeed purchasing large satellites at a cost of roughly $1 billion each—far more than the millions typically spent on small satellites from Rocket Lab (NASDAQ: RKLB) or Planet Labs (NYSE: PL). However, the key takeaway for investors is that the Air Force is buying big satellites specifically to replace existing big satellites, not to reverse the broader industry trend toward smaller, more numerous constellations.