Analysis of the Impact of the U.S. $2.3 Billion Arms Sale to Singapore on U.S. Stock Defense Sector Investments

Based on the obtained market data and industry information, I have prepared the following analysis report for you:

---

According to public information, the U.S. Department of State has approved the sale of military equipment such as aircraft and torpedoes to Singapore, with a total value of $2.3 billion. Such arms sales are typically conducted through the U.S. Foreign Military Sales (FMS) channel, involving major U.S. defense contractors including:

• Prime Contractors
  : Lockheed Martin, RTX, Northrop Grumman, General Dynamics, etc.
• Equipment Types
  : Expected to include F-35 fighter jets and related systems, naval torpedoes, training and technical support, spare parts supply, etc.

---

As of January 20, 2026, the

, which includes the defense sector, fell by on the day, underperforming the broader market. Year-to-date, the performance of major defense stocks is as follows:

Company	Ticker	Year-to-Date Return	Market Cap (Billion USD)	Dividend Yield	Revenue Growth
Lockheed Martin	LMT	+8.2%	$118.5	2.8%	+6.2%
RTX	RTX	+12.5%	$156.2	2.1%	+8.5%
Northrop Grumman	NOC	+15.3%	$76.8	1.5%	+4.2%
Boeing	BA	-5.2%	$182.3	0%	-2.1%
General Dynamics	GD	+11.8%	$81.5	2.4%	+5.8%
L3Harris	LHX	+9.6%	$45.6	1.8%	+7.3%

• Average Year-to-Date Return:
  +8.7%
• Average Price-to-Earnings Ratio:
  19.3x
• Average Dividend Yield:
  1.77%
• Average Revenue Growth:
  +5.0%

In terms of sector performance, the Industrials Sector performed relatively weakly on January 20, 2026, falling 0.88% and lagging behind the Healthcare Sector (+0.85%). This indicates that the defense sector has been affected by overall market volatility in the short term.

---

The $2.3 billion arms sale order will bring considerable

to relevant contractors. Based on the composition of the arms sale, estimates are as follows:

Contractor	Estimated Revenue Contribution	Percentage of Annual Corporate Revenue	Impact Rating
Lockheed Martin (Prime Contractor)	$460M	~0.4%	Neutral to Positive
RTX (Weapons Systems)	$276M	~0.2%	Neutral
Northrop Grumman (Electronic Systems)	$184M	~0.2%	Neutral
General Dynamics (Naval Systems)	$138M	~0.2%	Neutral
Other Subcontractors	$142M	-	Limited Impact

1. Geopolitical Signal
   : The U.S. is deepening defense cooperation with Singapore and Southeast Asia, which helps consolidate its military presence in the region, forming a long-term positive for companies such as RTX and Lockheed Martin
2. Confidence in Export Orders
   : The approval of the large-scale arms sale indicates U.S. government support for defense exports, which is expected to stimulate other countries to purchase U.S.-made weapons
3. Asia-Pacific Security Situation
   : Rising security concerns in the region may drive more countries to increase their defense budgets

1. Limited Order Scale
   : The $2.3 billion accounts for only 0.4% of Lockheed Martin’s annual revenue (approximately $68 billion), so its impact on individual company performance is limited
2. Long Delivery Cycle
   : The delivery of weapon systems typically takes several years, resulting in limited contribution to short-term financial reports
3. Geopolitical Risks
   : Tensions in U.S.-China relations may affect some potential orders

Impact Dimension	Assessment	Recommendation
Short-Term Stock Price	Limited impact, already reflected in current stock prices	Wait-and-see approach recommended
Medium-Term Order Flow	Positive signal, expected to attract more international orders	Monitor subsequent arms sale developments
Long-Term Strategy	Deepening Asia-Pacific defense cooperation, structural positive for the defense sector	Accumulate on dips
Sector Rotation	Industrials Sector under short-term pressure, defense stocks relatively resilient	Can be used as a defensive allocation

---

1. Lockheed Martin (LMT)
   : As the prime contractor for the F-35, it is expected to receive the largest share of the order. Coupled with stable cash flow and a 2.8% dividend yield, it is suitable for long-term investors
2. RTX
   : With diversified operations (aviation + defense), its 8.5% revenue growth leads the industry, and its valuation is reasonable

• Boeing (BA) has fallen 5.2% year-to-date due to issues with the 737 MAX and 777X programs; it is recommended to avoid it

1. Monitor Subsequent Arms Sales
   : Arms sale orders approved by the U.S. Department of State require congressional review; monitor the final approval status
2. Monitor Geopolitics
   : U.S.-China relations, the situation on the Korean Peninsula, the Taiwan Strait situation, etc., will affect sector performance
3. Valuation Risk
   : The current average P/E ratio of the defense sector is 19.3x, which is higher than the historical average; vigilance is required for valuation corrections

Allocation Ratio	Recommended Target	Rationale
40%	LMT	Industry leader, steady growth, high dividend
30%	RTX	Diversified operations, strong growth potential
20%	GD	Naval equipment specialist, benefits from Asia-Pacific security
10%	Cash	Wait for better buying opportunities

---

The U.S. has approved the sale of $2.3 billion worth of military equipment to Singapore, which has

on the U.S. stock defense sector, but :

1. Short-Term Impact
   : The $2.3 billion order contributes less than 1% of annual revenue to companies such as Lockheed Martin, with limited direct impact on stock prices. The market may interpret this as a signal of U.S. government support for defense exports, but it is difficult to translate into significant gains in the short term.
2. Medium-Term Impact
   : This arms sale demonstrates the U.S.'s strategic intention to deepen Asia-Pacific defense cooperation, which is expected to stimulate other countries in the region (such as Japan, South Korea, and Australia) to increase defense procurement, bringing more order opportunities for U.S. defense contractors.
3. Long-Term Trend
   : Global defense spending continues to grow, and combined with the evolution of the Asia-Pacific security situation, the U.S. defense sector has structural growth drivers. The current average year-to-date return of the sector is +8.7%, outperforming the broader market, making it worthy of allocation.

: — It is recommended that investors treat the defense sector as a defensive allocation in their portfolios, with a focus on industry leaders such as Lockheed Martin and RTX.

---

[0] Gilin AI Financial Database - U.S. Defense Sector Market Data and Financial Metrics

: This report is based on public market data analysis and does not constitute specific investment advice. The arms sale agreement ultimately requires review and approval by the U.S. Congress, and uncertainties exist. Investors should make prudent decisions based on their own risk tolerance.