After the setback before the weekend, defense stocks are stabilizing again. Record high military spending could now provide new impetus.
• Defense stocks fell significantly before the weekend
• Countermovement to the start of the week
• Global military spending at record levels
Armor values start recovery attempt
Last Friday, a significant correction began in the defense sector: Rheinmetall shares lost over five percent and fell to 1,340.20 euros. RENK also lost more than 5.4 percent, while HENSOLDT also fell by around 5.4 percent. The TKMS papers remained comparatively stable, but still lost almost three percent to 81.10 euros.
At the start of the week, the mood seems to be improving across the board: Rheinmetall temporarily rose by 2.58 percent to 1,353.20 euros via XETRA, RENK recorded an increase of 2.15 percent to 55.06 euros. For HENSOLDT, profits of 1.37 percent to 74.02 euros are on the price board, while TKMS shares increased by 0.13 percent to 80.10 euros.
This countermovement could indicate that investors continue to interpret pullbacks as entry opportunities.
Global military spending at record levels
The world has never spent as much money on the military as in 2025. Driven by numerous wars and conflicts, global military spending reached a new high for the eleventh year in a row, according to the Stockholm peace research institute Sipri. Adjusted for inflation, spending rose by 2.9 percent compared to the previous year. Within a decade they even grew by 41 percent.
In 2025, all countries together spent almost 2.89 trillion US dollars (almost 2.47 trillion euros) on the military. However, the increase was significantly lower than in 2024. The peace researchers attributed this to a decline in US military spending. The main reason for this: the lack of aid for Ukraine. In contrast, the United States invested more in its own nuclear and conventional military capabilities.
The Federal Republic came fourth in the ranking of countries with the highest spending – behind the USA, China and Russia, but ahead of all other European countries.
Despite the decline, the USA remained the country with by far the largest expenditure on the military (the equivalent of almost 814 billion euros). In the future, the number is likely to rise again, said Sipri expert Diego Lopes da Silva: “The USA has already announced plans to increase its military spending.”
According to the researchers, the fact that global military spending increased again overall in 2025 is primarily due to the rearmament in Europe. European countries’ spending rose by 14 percent last year.
The uncertainty as to the extent to which the USA will support them as a reliable NATO partner in the future certainly played a role for many countries, said da Silva. “When you see international security deteriorating, it creates an atmosphere of insecurity – and to feel safer, countries put more money into their military.”
Greenpeace criticized the high spending by European states: “This course is leading in the wrong direction,” said disarmament expert Barbara Happe. “Real security grows from civil crisis prevention, climate protection and social justice, not from ever new spirals of armaments.” In Germany, climate protection and social justice are being neglected, while billions are being invested in rearmament.
“When international security deteriorates, uncertainty arises – and states invest more in their military,” SIPRI expert Diego Lopes da Silva is quoted as saying.
Rheinmetall relies on autonomous systems
At the same time, Rheinmetall is driving technological development forward. Together with IBM and other partners, the group is working on autonomous surface vehicles. The aim is to make maritime operations more efficient and safer.
“The most viable solution to this is the autonomous system network,” explained Naval Systems boss Tim Wagner. A first prototype has already been tested under real conditions and demonstrated capabilities in reconnaissance, surveillance and defense.
For the market, this could be an indication that value creation is increasingly shifting towards AI-supported systems.
Bundeswehr-Follow-up order for Rheinmetall
In addition, the armaments company Rheinmetall receives another billion-dollar order from the Bundeswehr for so-called soldier systems for the digital networking of ground troops. Further soldier systems “Infantryman of the Future – Extended System” (IdZ-ES) were obtained from a framework agreement concluded in February 2025, as the company announced.
The order, worth 1.04 billion euros, provides for the modernization of existing systems and the delivery of an additional 237 train systems. The systems are scheduled to be delivered between November 2027 and December 2029.
A train system is used to equip a military sub-unit and primarily includes 35 individual soldier systems and a train set of peripheral components, consisting of expanded IT equipment, optics, optronics as well as clothing, protective and carrying equipment.
A few days ago, the Bundestag approved 1.3 billion euros for the project, so further calls are expected.
In February 2025, the Federal Office for Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) concluded a framework agreement for the replacement procurement of IdZ-ES systems with a maximum gross volume of 3.1 billion euros. This runs until the end of 2030 and has already included a firm contract to modernize 68 systems in use as well as the procurement of 24 new train systems with a gross value of around 417 million euros.
TKMS strengthens international cooperation
Meanwhile, thyssenkrupp Marine Systems is expanding its international presence. A memorandum of understanding was signed together with Embraer and the Brazilian Ministry of Defense to expand the Tamandaré frigate program.
At the same time, the first frigate “Tamandaré” was put into service. CEO Oliver Burkhard spoke of a “clear sign of the deep trust” in the partnership.
The program is considered a key project for the Brazilian Navy and involves around 1,000 companies in the supply chain.
Correction as an opportunity?
Given rising military spending and operational progress, the recent period of weakness could be interpreted as consolidation within an intact trend. In addition to defense spending, geopolitical tensions also remain as structural drivers of the industry.
However, some of these expectations are likely to have already been priced in. If orders or political impulses fall short of expectations, a reassessment would be conceivable. On the other hand, setbacks could offer opportunities.
Benedict Kurschat, Evelyn Schmal, finanzen.net editorial team with material from Dow Jones Newswires and dpa-AFX
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
