Core Viewpoint - The approval of a major defense sale package, including F-35 deliveries to Saudi Arabia, is expected to enhance growth prospects for Lockheed Martin and other U.S. defense contractors, while also solidifying U.S.-Saudi defense ties [1][8]. Defense Sales and Market Impact - The agreement includes the sale of nearly 300 American tanks to Saudi Arabia, which is anticipated to generate significant revenue for U.S. defense stocks and related ETFs [2]. - The F-35 program involves multiple defense contractors, indicating a sector-wide benefit from the deal, which is likely to support profit margin expansion across the industry [5][12]. Investment Considerations - While Lockheed Martin stands to benefit from the F-35 deal, its high debt-to-equity ratio of approximately 3.59 poses financial risks compared to the industry average of 1.06 [3]. - Defense ETFs provide a diversified investment option that mitigates risks associated with single-stock investments, capturing the broader trend of rising defense spending without being overly exposed to Lockheed Martin's specific challenges [4]. U.S.-Saudi Defense Relationship - The U.S. has been Saudi Arabia's primary arms supplier, providing about 74% of the kingdom's arms imports from 2020 to 2024 [7]. - Lockheed Martin has maintained a long-standing partnership with Saudi Arabia since 1965, further solidified by the recent F-35 sales agreement [8]. Notable Defense Contractors - Other major U.S. defense contractors involved in supplying weapons to Saudi Arabia include Boeing, which has delivered over 400 defense platforms, and RTX's Raytheon unit, which supplies the Patriot missile defense system [9][10]. Recommended Defense ETFs - **Global X Defense Tech ETF (SHLD)**: Net assets of $4.95 billion, exposure to 42 companies, year-to-date surge of 71.9% [13]. - **Invesco Aerospace & Defense ETF (PPA)**: Net asset value of $148.97 per share, exposure to 60 companies, year-to-date increase of 30.4% [14]. - **iShares U.S. Aerospace & Defense ETF (ITA)**: Net asset worth $11.84 billion, exposure to 39 companies, year-to-date growth of 40.3% [15].