Rheinmetall, a German arms manufacturer, saw its stock go up dramatically and continues to rise, gaining by more than 1,000% following Russia’s invasion of Ukraine in 2022.
Such phenomenal growth was a testament to the company’s important contribution to building up Europe’s defense effort. By March 13, 2025, Rheinmetall’s market capitalization had climbed to about €56.2 billion, now more than the €54.7 billion value of its automotive rival Volkswagen.
This also measures the industry shift in Europe to prioritize defense sector prominence in times of geopolitical tensions. There is a substantial testament to investor confidence in companies like Rheinmetall since the EU has pledged to raise up to €800 billion for defense spending.
This huge allocation will be used to upgrade the military capabilities of the continent in anticipation of changing security threats.
Rheinmetall’s financials mirror this rising trend. In 2024 sales came in at €9.75 billion, up 36%, with operating earnings reaching €1.48 billion, a rise of almost 61% in comparison to the previous year.
The order backlog at Rheinmetall went up by 45% to €55 billion, buoyed by continuing demand for defense offerings. It expects sales to increase from €12 billion in 2025 by 25%-to-30%. The strategic positioning is allowing the company to build towards shipments of €30 billion by the year 2030, accruing the increased spending on defense by Europe.
The boom has not been limited to Rheinmetall; stock prices of other European defense contractors, BAE Systems, Leonardo, and Thales, skyrocketed. Foreshadowing greater defense spending by European nations harnessed against geopolitical threats has also fueled this trend. Rheinmetall CEO Armin Papperger has been leading the company through a period of growth.
Production capacities were added under Papperger’s stewardship, securing huge orders for the company and establishing it among the key European defense players. The company’s strategic vision demands new ammunition production plants and car factories, which will come online in 2025. Such expansions would further boost Rheinmetall’s chances of satisfying the elevating demand for all kinds of defense hardware.
Challenges persist notwithstanding the bullish forecast. Ethical investment considerations in defense companies remain on the agenda of European asset managers. Striking a balance between the need for effective defense systems and ethical investing is a constant conundrum.
In summary, Rheinmetall’s phenomenal stock performance is a reflection of the general trend of rising defense expenditure in Europe. The strategic positioning and sound financial health of the company make it well placed to take advantage of future opportunities in the defense industry. As geopolitical forces continue to shift, Rheinmetall continues to be at the center of debates regarding Europe’s security and industrial priorities.
