Trump's $142 billion arms deal may not get the Saudis the F-35 stealth fighter
The F-35 could put Saudi Arabia's military on par with Israel in what may be a dealbreaker.
The Saudis may also buy advanced US drones and missile defenses as part of the agreement.
During his visit to Saudi Arabia, President Donald Trump signed what the White House described as "the largest defense sales agreement in history," valued at almost $142 billion, that will provide the kingdom "state-of-the-art warfighting equipment and services." The offer, the final value of which may ultimately prove much less than $142 billion, is expected to include Lockheed Martin's C-130 Hercules transport aircraft and other unspecified missiles and radars. Neither the White House nor administration officials have provided further details about which specific systems the deal may include, such as the advanced fighter Riyadh has wanted.
The two sides discussed a potential Saudi purchase of the F-35 Lightning II stealth strike fighter and Israel's qualitative military edge came up, Reuters reported Tuesday. The Saudis have sought the F-35 for years since it's one of the world's top fighter jets that could put the kingdom's armed forces on par with Israel, the only Middle Eastern country currently flying that fifth-generation combat aircraft. Washington is legally obligated to preserve Israel's military advantage by, among other things, not selling military hardware to regional countries that are as or more advanced than Israel's arsenal. Unlike the neighboring United Arab Emirates, Saudi Arabia has not joined the Abraham Accords by normalizing ties with Israel and refuses to do so amid the ongoing war in Gaza.
"I think an F-35 deal could be agreed upon even absent Saudi-Israeli normalization," Ryan Bohl, a senior Middle East and North Africa analyst at the risk intelligence company RANE, told Business Insider. "However, to proceed with the F-35 package, it would have to be significantly downgraded to preserve Israel's qualitative military edge."
"Such downgrades might diminish the overall sale's attractiveness to the Saudis."
Israel took delivery of three F-35s in March, bringing its total fleet strength to 42. It will field 75 eventually. Washington may not agree to sell Riyadh a comparable number, and it may impose limits on their use.
"I don't think numbers alone will be sufficient, as the Israelis will be concerned that such systems could eventually end up in the hands of adversaries," Bohl said. "Rather, I think we would likely see technical restrictions and end-use requirements that would severely limit the usage of F-35s by the Saudis and reduce their capabilities against the Israelis."
Israel's F-35I Adir is a unique version of the stealth aircraft that Israel modifies with indigenous weapons and systems. Therefore, the Adir is arguably already more advanced than any standard F-35A model Saudi Arabia might acquire.
Ultimately, it is Israel's arch-rival Iran that may have more concerns over the prospect of Saudi F-35s.
Any F-35 acquisition could give Saudi Arabia the "ability to conduct deep strikes in Iran" in ways far greater than presently possible with their current fleet of non-stealthy 4.5-generation F-15s, noted Sebastien Roblin, a widely published military-aviation journalist. Such an acquisition could also "substantially enhance" Saudi airpower and enable Riyadh to participate in any US or Israeli bombing campaign against Iran.
"I can see such an acquisition affecting the perceived regional balance of power vis-à-vis Tehran," Roblin told BI.
"That said, in a large-scale conflict, questions would arise about the vulnerability of these aircraft to Iranian strikes when they landed," Roblin said. "And whether these countries could acquire enough F-35s with enough munitions and muster sufficient professionalism and support assets to minimize risks of combat losses."
Riyadh may not prioritize acquiring the F-35 and seek other advanced American armaments.
The US is much more open to exporting advanced drones to Middle Eastern countries than just a few years ago, when Washington largely followed the range and payload limitations suggested by the Missile Technology Control Regime for exported systems.
Before Trump's trip, Washington green-lighted a potential sale of MQ-9B drones to Qatar. General Atomics is expected to offer Saudi Arabia MQ-9B SeaGuardians as part of a "huge" package deal.
"I think the weakening of end-use restrictions will certainly make the Americans more eager to strike deals to sell their drones to the region," RANE's Bohl said. "American drones will still need to compete against Turkish and Chinese drones that may be cheaper and have fewer political strings attached."
When Washington previously declined Middle East requests for advanced American drones, China stepped in and supplied its drones throughout the region in the 2010s. In the 2020s, Saudi Arabia and the UAE signed lucrative contracts with Turkey for its indigenous Bayraktar drones.
"I wouldn't expect a major surge in American drone exports to the region at this point, but rather for them to become part of this region's drone diversification strategy," Bohl said. "Certainly, there will be notable deals struck in the coming years, but China and Turkey will continue to be formidable competitors in the drone arena in the Arab Gulf states."
The White House mentioned that the $142 billion agreement includes "air and missile defense."
"If we are looking at recent trends, they should be focusing on air defenses, including deeper stocks of interceptor missiles, and diversification of air defenses to cost-efficiently combat lower-end threats as well as high-end ones," Roblin said.
Saudi Arabia already operates advanced US Patriot air defense missiles and the Terminal High Altitude Area Defense system, which can target ballistic missiles outside the atmosphere. It completed its first locally manufactured components of the latter system mere days before Trump's visit. Riyadh may seek similar co-production deals to aid in developing its domestic arms industry.
"There's a need for more long-distance precision strike weapons in the form of missiles and drones, which can be used without risking expensive manned combat aircraft," Roblin said. "There should be some parallel interest at sea, where we've seen Ukraine and the Houthis successfully execute sea denial strategies, one that Iran might seek to imitate in the confined waters of the Gulf."
"Thus, the homework of Gulf navies is to ensure their vessels have the sensors and self-defense weapons to cope with small boat threats and cruise and ballistic missiles."
Saudi Arabia has already taken steps to expand its navy with more advanced warships in recent years. RANE's Bohl believes Trump may persuade the kingdom to "purchase big-ticket items like warships" as he attempts to "revitalize the manufacturing sector" in the US.
Only a fraction of this $142 billion agreement may result in completed deals — as was the case with the series of letters of intent for $110 billion worth of arms sales Trump signed with Riyadh in 2017.
"These deals involve optioning huge defense sales, but Trump will present these to his supporters as done deals," Roblin said. "So, the Gulf states can gift Trump a large number as a political victory without actually having to pay anywhere near the whole bill."
"For the 2017 defense deal, by the following year, Riyadh reportedly had bought only $14.5 billion out of $110 billion optioned."
Paul Iddon is a freelance journalist and columnist who writes about Middle East developments, military affairs, politics, and history. His articles have appeared in a variety of publications focused on the region.
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Strategy (MSTR) stock rose less than 1% after the company soared past estimates, lifted by a Q2 rally in bitcoin (BTC-USD). For the second quarter, the Michael Saylor-led firm reported cash and cash equivalents of $50.1 million, below Bloomberg consensus estimates for $1.11 billion. Diluted earnings per share were $32.60, versus estimates for a $0.03 per share loss, per S&P Global Market Intelligence. Revenue came in at $114 million. For the full year, Strategy expects operating income of $34 billion, net income of $24 billion, and diluted earnings per share of $80. As the largest corporate holder of bitcoin, crypto investors looked to the software maker's results as a bellwether for the crypto market. As of June 30, the company held approximately 597,325 bitcoins and achieved a year-to-date bitcoin yield of 25%. "Strategy has achieved a year-to-date BTC Yield of 25%, meeting our full year target well ahead of our initial timeline," the company said. "As a result, our BTC $ Gain now exceeds $13 billion, and the increase in the price of bitcoin in the second quarter drove second quarter operating income of $14 billion and Q2 diluted EPS of $32.60." Apple reports earnings, revenue ahead of forecasts Apple reported results Thursday that beat forecasts on the top and bottom lines as the iPhone maker boasted about double-digit revenue growth across its iPhone, Mac, and Services businesses, as well as growth in all of its geographic segments. Earnings per share came in at $1.57, ahead of the $1.43 Wall Street had expected, while revenue tallied $94 billion, up 10% from last year and ahead of forecasts for $89.2 billion. Its Services revenue totaled $27.4 billion, a new record, and comprised nearly 30% of its total revenues in the quarter. Apple stock was up about 2% following the results. Apple reported results Thursday that beat forecasts on the top and bottom lines as the iPhone maker boasted about double-digit revenue growth across its iPhone, Mac, and Services businesses, as well as growth in all of its geographic segments. Earnings per share came in at $1.57, ahead of the $1.43 Wall Street had expected, while revenue tallied $94 billion, up 10% from last year and ahead of forecasts for $89.2 billion. Its Services revenue totaled $27.4 billion, a new record, and comprised nearly 30% of its total revenues in the quarter. Apple stock was up about 2% following the results. Roku reports surprise profit in Q2, revenue beats expectations Roku's (ROKU) second quarter results got a boost from an expanding user base and advertising sales, the company reported Thursday. The company reported profits of $0.07 per share, above the $0.17 per share loss analysts expected. Revenue came in at $1.11 billion for the quarter, compared to the analysts' average estimate of $1.07 billion, according to data compiled by LSEG. Reuters reports: Read more here. Roku's (ROKU) second quarter results got a boost from an expanding user base and advertising sales, the company reported Thursday. The company reported profits of $0.07 per share, above the $0.17 per share loss analysts expected. Revenue came in at $1.11 billion for the quarter, compared to the analysts' average estimate of $1.07 billion, according to data compiled by LSEG. Reuters reports: Read more here. Coinbase stock falls 7% after results disappoint Crypto giant Coinbase (COIN), a recent addition to the S&P 500, saw shares fall more than 7% in after-hours trading on Thursday after the company posted second quarter results that came in below Wall Street forecasts. Coinbase reported second quarter revenue of $1.5 billion, below the $1.59 billion analysts had forecast, while trading volume and transactions revenue both fell shy of expectations. Subscriptions and services revenue in the second quarter totaled $656 million. Adjusted EBITDA in the second quarter totaled $514 million, down from $596 million a year ago. In the third quarter, the company expects subscriptions and services revenue to fall within a range of $665 million-$745 million. Since the April 9 bottom in the stock market, Coinbase shares have roughly doubled; ahead of Thursday's results, the stock was up more than 50% this year. Crypto giant Coinbase (COIN), a recent addition to the S&P 500, saw shares fall more than 7% in after-hours trading on Thursday after the company posted second quarter results that came in below Wall Street forecasts. Coinbase reported second quarter revenue of $1.5 billion, below the $1.59 billion analysts had forecast, while trading volume and transactions revenue both fell shy of expectations. Subscriptions and services revenue in the second quarter totaled $656 million. Adjusted EBITDA in the second quarter totaled $514 million, down from $596 million a year ago. In the third quarter, the company expects subscriptions and services revenue to fall within a range of $665 million-$745 million. Since the April 9 bottom in the stock market, Coinbase shares have roughly doubled; ahead of Thursday's results, the stock was up more than 50% this year. Reddit stock soars as company posts fastest quarterly revenue growth in 3 years Reddit (RDDT) stock jumped as much as 13% after hours after the social media company reported its fastest revenue growth in three years. Profits reached $0.48 per share in the second quarter, above the $0.19 per share projected by Wall Street analysts. Revenue grew 78% to $500 million, higher than the $425 million expected. Yahoo Finance's Laura Bratton reports: Read more here. Reddit (RDDT) stock jumped as much as 13% after hours after the social media company reported its fastest revenue growth in three years. Profits reached $0.48 per share in the second quarter, above the $0.19 per share projected by Wall Street analysts. Revenue grew 78% to $500 million, higher than the $425 million expected. Yahoo Finance's Laura Bratton reports: Read more here. Amazon posts earnings beat but stock slips Amazon (AMZN) profits and sales beat estimates for the second quarter, the company reported: AWS revenue rose 17% to hit $30.8 billion versus an expected $30.7 billion. It topped $26.2 billion in Q2 last year. The company's report follows Google's (GOOG, GOOGL) and Microsoft's (MSFT) own blowout announcements, highlighting growth across their respective cloud businesses on the back of increased customer spending on AI. Rival Microsoft reported that its Azure business generated $75 billion in fiscal 2025. Amazon widened its guidance for operating income on the lower end. For the third quarter, Amazon expects the operating income to come in between $15.5 billion and $20 billion, potentially indicating a headwind from tariffs. The initial reaction on the Street was downbeat, with Amazon stock slipping 2% after hours. Read more here. Amazon (AMZN) profits and sales beat estimates for the second quarter, the company reported: AWS revenue rose 17% to hit $30.8 billion versus an expected $30.7 billion. It topped $26.2 billion in Q2 last year. The company's report follows Google's (GOOG, GOOGL) and Microsoft's (MSFT) own blowout announcements, highlighting growth across their respective cloud businesses on the back of increased customer spending on AI. Rival Microsoft reported that its Azure business generated $75 billion in fiscal 2025. Amazon widened its guidance for operating income on the lower end. For the third quarter, Amazon expects the operating income to come in between $15.5 billion and $20 billion, potentially indicating a headwind from tariffs. The initial reaction on the Street was downbeat, with Amazon stock slipping 2% after hours. Read more here. Apple Q3 earnings to give Wall Street better view of tariff impact Yahoo Finance's Daniel Howley previews what to watch when Apple reports earnings after the bell: Read more here. Yahoo Finance's Daniel Howley previews what to watch when Apple reports earnings after the bell: Read more here. Reddit set to report Q2 earnings as Wall Street scrutinizes daily active user growth Reddit (RDDT) will report second quarter results after the bell on Thursday. One key metric to watch will be daily active users, which disappointed Wall Street over the last two quarters. Changes to Google Search's algorithm could further disrupt the platform's users. Yahoo Finance's Laura Bratton breaks down what the Street is hoping to hear from Reddit: Read more here. Reddit (RDDT) will report second quarter results after the bell on Thursday. One key metric to watch will be daily active users, which disappointed Wall Street over the last two quarters. Changes to Google Search's algorithm could further disrupt the platform's users. Yahoo Finance's Laura Bratton breaks down what the Street is hoping to hear from Reddit: Read more here. Unilever's personal care business delivers solid results, but ice cream was the standout Unilever (UL) beat sales growth forecasts in the second quarter but reported a 50% drop in free cash flow year over year. The ice cream business outperformed in Q2, with sales rising 7.1%, led by double-digit growth in its Magnum brand. Unilever's ice cream business is on track to be spun off in November. The new company will be called The Magnum Ice Cream Company, and Unilever will retain a 20% stake in the company. Reuters reports: Read more here. Unilever (UL) beat sales growth forecasts in the second quarter but reported a 50% drop in free cash flow year over year. The ice cream business outperformed in Q2, with sales rising 7.1%, led by double-digit growth in its Magnum brand. Unilever's ice cream business is on track to be spun off in November. The new company will be called The Magnum Ice Cream Company, and Unilever will retain a 20% stake in the company. Reuters reports: Read more here.
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Buffered ETFs gain steam in valuation-wary markets
As a new round of U.S. tariffs send markets tumbling, could a once-overlooked ETF hedge offer investors the safety net they're seeking? Buffered ETFs, also known as defined outcome products, have gained traction in recent years by offering partial downside protection in exchange for capped gains. Each fund is structured to shield investors from a set percentage of losses, typically 10% to 20%, over a fixed period. In return, gains are limited, and the terms reset at the end of each outcome window. Buffered ETFs struggled to gain traction after their late 2018 debut — and for good reason. From 2019 through 2021, the S&P 500 returned an average of 24% annually, leaving little appeal for products that cap upside. But a sharp downturn in 2022 changed the equation. With the index falling nearly 20% that year, investors poured nearly $10 billion into buffered ETFs, breathing new life into the once-overlooked product. READ MORE:Top 10 dividend stocks of the past yearThe case for investing in emerging markets, despite underperformanceThe 'granular' investing strategy with big tax savings for HNW clientsWall Street builds S&P 500 'no dividend' fund in new tax dodge During times of declining equities, investors often rely more heavily on bonds. But in recent years that strategy hasn't always worked out, according to Charles Champagne, head of ETF strategy at Allianz Investment Management. "When you have an equity and fixed income portfolio, if equities are in a tougher market, you expect your fixed income to offset those losses, and that just really hasn't happened in the past [couple of years]," Champagne said. "So these products really help in that capacity." To build buffered ETFs, issuers like Allianz use options to shape both downside protection and upside limits. They start by buying a deep-in-the-money call to mirror market exposure. Then, to create the buffer, they buy an at-the-money put and sell an out-of-the-money put, defining how much loss the fund will absorb. To offset the cost of this protection, they sell a call option, which in turn sets the cap on gains. This options mix allows issuers to offer defined outcomes over a set time frame, typically one year. While buffered ETFs offer downside protection, their complex structure and active management often result in higher fees. First Trust and Innovator dominate the market, with flagship products like BUFD and PJAN charging expense ratios of 0.95% and 0.79%, respectively. Smaller issuers such as Allianz offer slightly lower costs — its most popular fund, JANW, carries a 0.74% fee — but costs remain high compared to the rest of the ETF market. Champagne said he expects those ratios to decline as the funds grow, but that will take time. "There is a cost to us managing these portfolios that we have to apply to the expense ratio. And then, like anything, economies of scale will eventually start to kick in," Champagne said. "And as assets continue to drive towards defined outcome ETFs, that will inevitably draw down that total cost to the investor through the expense ratio. But anytime you're dealing in options or exotic investments, there are additional costs that are factored into the total cost of the ETF." High costs aren't the only deterrent for some advisors when considering buffered ETFs. Carson McLean, the founder of Altruist Wealth Management in Charlotte, North Carolina, said that buffered ETFs often "overpromise and underdeliver" when it comes to real-world investing behavior. "They introduce complexity, hidden trade-offs (like forgone dividends and capped returns), and a timing dependency that most investors don't fully grasp," McLean said. "In my view, it's risk repackaging more than risk reduction." Advisors like Kyle Ray, the founder of Ridgeback Wealth Management in Peachtree City, Georgia, share a similar view of buffered ETFs. "I am not a fan of buffered ETFs for several reasons," Ray said. "They can be complex, costly and tax-inefficient due to short-term capital gains resulting from frequent options trading. Additionally, they carry liquidity risks and other drawbacks." More than one way to hedge For clients looking for downside protection, well-worn strategies are often still the best option, according to some advisors. McLean says a traditional bond-equity mix can still work well, especially when combined with thoughtful planning, disciplined rebalancing and guidance that keeps clients steady during market swings. With this approach, it's crucial to match the portfolio structure to the actual spending needs and time horizon of the client, he said. "That may not sound exciting, but it tends to work better than most engineered products," McLean said. Another approach involves using TIPS (Treasury inflation-protected securities) to build a laddered bond portfolio. With TIPS ladders, advisors purchase bonds that mature at regular intervals (often annually), helping to create a predictable stream of inflation-adjusted income over time. "While I do not advocate for timing market entries, now is a good time to assess whether you need high equity risk to achieve your financial goals," Ray said. "Currently, real yields on a 30-year ladder of TIPS are 2.4% above inflation. Purchasing a 30-year TIPS would be expected to more than double in real purchasing power if held to maturity. With real yields this high, investors should seriously consider whether they would get a fine result with fewer equities and less stomach acid." Investing with the right mentality Beyond the specific strategy, advisors say it's crucial to have the right mentality when it comes to long-term investing and the challenges it presents. "The bottom line answer is that no matter how you feel about market valuations, the market can either stay irrational a lot longer than you expect, or alternatively, corporate earnings can catch up with lofty valuations, bringing them back down to reality. Case in point are the earnings of companies like Meta and Microsoft," said Alex Caswell, a financial planner at Wealth Script Advisors in San Francisco. "I would encourage investors to think primarily about the risk/reward balance in their entire portfolio and commit to a long-term holding mentality," he added." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Meta to share AI infrastructure costs via $2 billion asset sale
By Echo Wang (Reuters) -Meta Platforms is pressing ahead with efforts to bring in outside partners to help fund the massive infrastructure needed to power artificial intelligence, disclosing plans in a filing on Thursday to offload $2 billion in data center assets as part of that strategy. The strategy reflects a broader shift among tech giants — long known for self-funding growth — as they grapple with the soaring cost of building and powering data centers to support generative AI. The social media giant said earlier this week that it was exploring ways to work with financial partners to co-develop data centers to help finance its massive capital outlay for next year. 'We're exploring ways to work with financial partners to co-develop data centers,' Meta Chief Finance Officer Susan Li said on a post-earnings conference call on Wednesday. While the company still expects to fund much of its capital spending internally, some projects could attract 'significant external financing' and offer more flexibility if infrastructure needs shift over time, Li said. The company did not have any finalized transactions to announce, she said. The disclosure in Meta's quarterly filing, however, signals that plans are firming up. In its quarterly filing on Thursday, Meta said it had approved a plan in June to dispose of certain data center assets and reclassified $2.04 billion worth of land and construction-in-progress as "held-for-sale". These assets were expected to be contributed to a third party within the next twelve months for co-developing data centers. Meta did not record a loss on the reclassification, which values the assets at the lower of their carrying amounts or fair value less costs to sell. As of June 30, total held-for-sale assets stood at $3.26 billion, according to the filing. Meta declined to comment for this story. CEO Mark Zuckerberg has laid out plans to invest hundreds of billions of dollars into constructing AI data center 'superclusters' for superintelligence. 'Just one of these covers a significant part of the footprint of Manhattan,' he said. The Instagram and WhatsApp owner on Wednesday raised the bottom end of its annual capital expenditures forecast by $2 billion, to $66 billion to $72 billion. It reported stronger-than-expected ad sales, boosted by AI-driven improvements to targeting and content delivery. Executives said those gains were helping offset rising infrastructure costs tied to its long-term AI push. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data