Boeing's more than $20 billion Navy jet contract is icing on the cake for its long-struggling defense business. For rival Northrop Grumman, the decision is a bitter pill.

Northrop Grumman shares sank nearly 4% Wednesday after the Navy picked its rival to build its sixth-generation fighter. The two contractors had spent the past year vying for the business after Lockheed Martin bowed out of the competition.

Northrop said it had offered the Navy "a highly survivable, digitally advanced sixth-generation fighter" and looked forward to learning more about the selection.

The company's loss leaves it with one major next-generation aircraft program on the horizon, the B-21 bomber. The contractor also builds satellites, missile parts and has a looming project to upgrade the U.S. land-based nuclear arsenal.