Jan 25 (V7N) – U.S. military equipment sales to foreign governments reached a record $318.7 billion in 2024, marking a 29% increase from the previous year, according to the State Department. The surge reflects efforts by countries to replenish weapon stockpiles sent to Ukraine and bolster defenses amid rising geopolitical tensions.

The growth underscores a strong outlook for U.S. defense contractors such as Lockheed Martin, General Dynamics, and Northrop Grumman, whose shares are expected to benefit from heightened global instability.

During his presidential campaign, Republican candidate Donald Trump called for NATO allies to increase their defense spending to 5% of GDP, significantly higher than the current 2% target. This proposal comes amid a global arms race fueled by Russia’s invasion of Ukraine, which has spurred ministries of defense worldwide to increase weapon orders. The U.S. is also working to replenish its own stockpiles depleted by military aid to Kyiv.

The State Department emphasized that arms sales and transfers are vital tools of U.S. foreign policy, with long-term implications for global and regional security.
Notable 2024 Sales:

Turkey: $23 billion for F-16 jets and upgrades
Israel: $18.8 billion for F-15 fighter jets
Romania: $2.5 billion for M1A2 Abrams tanks

U.S. weapons manufacturers are dealing with a significant backlog of orders, including hundreds of thousands of artillery rounds, Patriot missile interceptors, and armored vehicles. These contracts are expected to drive robust performance in upcoming quarters.
Sales Channels:

Foreign governments purchase U.S. military equipment through two main channels:

Direct Commercial Sales: Negotiated directly with companies, requiring U.S. government approval.
Foreign Military Sales: Arranged via the U.S. government, typically involving a Defense Department representative.

In fiscal 2024, direct commercial sales increased to $200.8 billion from $157.5 billion in 2023. Foreign military sales also grew, rising to $117.9 billion from $80.9 billion the previous year.

END/BUS/RH/