The war industry is rubbing its hands with glee at the massive rearmament of Europe.

BrusselsIf the tide is rough, there's plenty of fish. The war in Ukraine and Donald Trump's return to the White House has pushed Europe to deploy major rearmament plans And, in the process, the European arms industry could benefit greatly. Since Vladimir Putin's regime began its invasion of Ukraine, the profits and share values of arms companies across the continent have continued to rise. However, they have soared higher than ever in recent days, especially since the Pentagon threatens to abandon protection of European allies and during the week that Brussels presented its roadmap for to rapidly increase the continent's military capacity"[Trump's return] is good for business," he admitted in a recent interview on the Financial Times Armin Papperger, the CEO of the German arms company Rheinmetall.

In fact, this company is the largest in the European arms sector and a favorite among investors. In the last five years, Rheinmetall has seen how the wars in Ukraine and Gaza—Germany is Europe's leading arms exporter to Israel—have allowed it to multiply its stock market value by 15 times its previous peak at the start of the pandemic.

As for profits, the figures are equally good for the German brand: in 2024, they increased by 36%, reaching €717 million, according to data published by the company itself. Orders received by Rheinmetall also grew substantially, reaching a total value of €55 billion, €22 billion more than in 2023. The CEO admitted that the current growth prospects are the most positive the company has "ever experienced."

In the case of Thyssenkrupp, its shares have also soared recently. The company, also headquartered in Germany, manufactures components and parts for the aeronautical sector, as well as for the automotive and elevator industries. Between January 1st and the publication of this article, its stock market value has more than doubled.

It's worth remembering that Germany was one of the European countries that spent the lowest percentage of its gross domestic product (GDP) on defense and, since the trauma of World War II, had emerged as one of the most pacifist EU states. However, in recent years it has broken the taboo against rearmament and is one of the NATO partners that are increasing their military spending faster, and that more weapons have been supplied to Ukrainian troops. The caretaker government and the future chancellor, Friedrich Merz, have announced constitutional reforms to allow them to borrow more and push for a massive German rearmament.

All of Europe benefits.

The boom in the European arms industry is reaching many other countries. BAE Systems, from the United Kingdom, has achieved record sales and profits, both increasing by 14% in 2024, reaching 28 billion and 3 billion, respectively. Furthermore, its stock market value has tripled since the start of the war in Ukraine, and its shares have appreciated by nearly 40% in the last month. It is worth remembering that the President of the European Commission, Ursula von der Leyen, has stated that she will prioritize European companies in arms purchases, even if they are located outside the EU. especially British and Norwegian ones.

This week, Italy's Leonardo, which manufactures electronic defense systems for aeronautics, energy, and transportation, among others, also presented its results. It earned 1.15 billion in 2024, 67% more than the previous year, and had a turnover of 17.763 billion, 16.2% more. Looking ahead to 2025, it forecasts revenues of 24 billion. Its stock market value has also skyrocketed. Since the start of the Russian invasion of Ukraine, it has grown by more than 650%.

The arms companies of France, the main military power in the European Union, are also not far behind. Thales, a military and aerospace electronics and components company, has seen its stock market value increase by more than 200% since 2022, and by 75% so far this year. Its revenue grew 11.7% compared to 2023, to €20.577 billion, and it expects to grow by 5% to 6% in 2025 compared to this year.

In Spain, the most notable case is Indra, which focuses primarily on information technology and, among others, cybersecurity. Since the war began, its shares have risen 200%, but they have especially appreciated in value in the last 45 days: they have grown 60%. In any case, the state's arms sector is far from the weight and competitiveness of the weapons industries of Germany, France, the United Kingdom, and Italy.

Golden prospects

The rearmament plans announced, both at the state level and jointly in the EU, are still being discussed, and most Member States are asking Von der Leyen for ambition, aims to mobilize some 800 billion euros in just four years. Spain, for example, continues to push for new eurobonds in the form of aid to state governments—like those for COVID-19, but for defense—and Germany asserts that four years of exceptional measures, such as the relaxation of fiscal rules, are not enough. In the long term, the EU is expected to change its budget plan and substantially increase the money it allocates to defense.

Beyond the EU, however, the pressure is even stronger. NATO, which is controlled by de facto by the Pentagon, already assumes that starting next June it will force all Atlantic partners to at least spend 3% or 3.5% of its GDP on defenseOnly five of the 32 countries in the Atlantic Alliance exceed the 3% rate, and Spain, for example, is at the bottom, at 1.28%.