TransDigm shares dropped more than 4 percent on Wednesday and had a 5.5 percent loss on Tuesday following Khanna's call for an investigation.
TransDigm did not immediately reply to CNBC's request for comment.
A member of the House Committee on Armed Services, Khanna sent a letter to the Defense Department's acting inspector general urging him to determine if the company is operating as a "hidden monopolist."
In his letter, Khanna said TransDigm may be bypassing rules that protect U.S. taxpayers since the manufacturer conducts business with the Pentagon. He said he wants to make sure the company is not adding unnecessary costs to the U.S. taxpayer and is not contributing to the $54 billion increase in defense spending proposed by the Trump administration.
Khanna told CNBC his goal is a congressional hearing.
The price of TransDigm closed at $237.94 per share on Monday and traded for as low as $213.87 on Wednesday.
Brokerage firm Cowen & Company downgraded the stock on Tuesday to a "hold" rating with a price target of $219.
Shares of TransDigm 6-month performance.
With Wednesday's declines, TransDigm shares are down nearly 25 percent in the last 6 months.
— CNBC's Seema Mody contributed to this report.