US Approves $24.3B F-35 Sale to Saudi Arabia

The Trump administration approved a potential $24.3 billion sale of 48 F-35 fighter jets and 49 engines to Saudi Arabia as Iran-backed Houthis escalate attacks and push for control of the Bab el-Mandeb Strait. Congress now has 30 days to scrutinize the deal, with some lawmakers citing risks of Chinese access to sensitive U.S. military technology through Saudi ties.

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The deal is a major near-term revenue catalyst for Lockheed Martin and engine-maker Pratt & Whitney (RTX), adding to a broader $142 billion Saudi defense package announced in 2025. Congressional review introduces execution risk, as lawmakers led by Rep. Krishnamoorthi warn that Saudi Arabia's ties to China could expose classified F-35 systems to the CCP, a risk that has previously derailed or delayed comparable Gulf arms sales. The administration's insistence the sale won't alter regional military balance signals continued U.S. commitment to Israel's qualitative military edge, a constraint that could shape future Gulf defense sales and Israeli defense-industry positioning. Escalating Houthi attacks on the Bab el-Mandeb Strait heighten near-term demand for naval and maritime security capabilities and add geopolitical risk premium to Red Sea shipping and insurance costs. Overall, markets should price this as bullish for U.S. defense primes' order backlogs but watch the 30-day congressional window for delay or modification risk tied to tech-transfer concerns.