European Defence Industry Sees Unprecedented Growth Amid Rearmament Push

Rheinmetall and other European arms manufacturers benefit from increased military spending as geopolitical tensions reshape the continent's priorities.

Rheinmetall, Europe's largest munitions producer, has reported record sales and projects up to 40% growth in 2025 due to rising defence budgets across Europe.
The war in Ukraine and shifting U.S. foreign policy under the Trump administration have prompted European nations to significantly increase military spending.
Germany's Rheinmetall has expanded production capacity, including building new factories, and is a major supplier of arms to Ukraine, contributing to its stock's 1,000% surge since 2022.
Other key players like Italy's Leonardo and France's Thales are also experiencing growth, with Leonardo focusing on joint ventures and Thales forecasting a 6-7% annual revenue increase in its defence division through 2028.
The European defence sector's re-rating has drawn increased investor interest, including the launch of a thematic ETF, reflecting a broader shift in attitudes toward defence investments.

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