F-35 Deal, Holding 25% of Sales, to Resume?...Lockheed Martin, Will NATO Boom?

▲ Lockheed Martin, defense stocks, USA, Türkiye, NATO/AI generated image

With the possibility of Türkiye purchasing F-35 fighter jets opening up again, eight defense stocks, including Lockheed Martin (Lockheed Martin, LMT), have emerged as beneficiaries of the North Atlantic Treaty Organization (NATO) summit. As the F-35 accounts for approximately 25% of Lockheed Martin's sales, Wall Street's attention is focused on whether the deal with Türkiye will resume.

According to the U.S. investment specialized media Barron's on July 7 (local time), leaders from 32 countries, including U.S. President Donald Trump, attended the North Atlantic Treaty Organization (NATO) summit held in Ankara, Türkiye. Türkiye is pushing to purchase Lockheed Martin's F-35 fighter jets and GE Aerospace's (GE Aerospace, GE) F110 engines.

Türkiye's purchase of F-35s was previously blocked by geopolitical conflicts. Barron's analyzed that Lockheed Martin could benefit if a breakthrough is made at the summit. The F-35 program accounts for approximately 25% of Lockheed Martin's total sales. Lockheed Martin's stock price has fallen by 18% since the start of the Iran war.

Europe's increased defense spending is also opening up a massive market for defense contractors. NATO member states have agreed on a goal to raise defense spending to 5% of their gross domestic product, an amount totaling approximately $1 trillion annually. This is a significant increase compared to Europe's 2025 defense budget of 381 billion euros.

Barron's also named Germany's Rheinmetall, UK's BAE Systems, and France's Thales as beneficiaries of increased defense spending. It assessed that new business opportunities could also arise for U.S. defense contractors as Europe strengthens its own defense capabilities.

If financial support for Ukraine expands again, drone companies could also come into focus. Barron's suggested AeroVironment (AeroVironment, AVAV), AEVEX, and Red Cat Holdings (Red Cat Holdings, RCAT) as related stocks. As Türkiye's F-35 purchase and increased NATO defense spending align, Lockheed Martin and seven other defense stocks have emerged as investment targets after the summit.

[Article Key Summary]

-Türkiye is pushing to purchase Lockheed Martin's F-35 fighter jets and GE Aerospace's F110 engines.

-The F-35 accounts for approximately 25% of Lockheed Martin's total sales, and Barron's analyzed that Lockheed Martin could benefit if the deal resumes.

-NATO member states have agreed on a goal to increase defense spending to 5% of their GDP, and Barron's highlighted eight defense stocks, including Lockheed Martin.

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