BAZAAR IS OPEN!! European Arms Makers See Stock Prices Surge

European arms manufacturers are experiencing a dramatic surge in stock prices, fueled by heightened geopolitical tensions and a renewed push for defense spending across the continent. On Monday, March 3, 2025, shares of major players like Germany’s Rheinmetall soared by 12%, Italy’s Leonardo climbed 11%, France’s Thales rose 13%, and the UK’s BAE Systems jumped 15%. This rally follows a weekend of intense diplomacy in London, where UK Prime Minister Keir Starmer hosted a European summit to rally support for Ukraine and outlined plans that could include military involvement to secure peace in the Russia-Ukraine conflict.

The surge reflects growing investor confidence in a European rearmament cycle, spurred by the ongoing war in Ukraine and shifting transatlantic dynamics. Starmer’s address to Parliament underscored the UK’s commitment to a “coalition of the willing” to bolster Ukraine’s defense, hinting at “boots on the ground and planes in the air” if necessary. This rhetoric, combined with a GBP 2.26 billion loan for Ukraine’s weapons and an additional GBP 1.6 billion for missiles, has turbocharged market optimism. Analysts at JPMorgan raised price targets for European defense firms by an average of 25%, citing a structural shift in regional security priorities.

The broader context is compelling. The Stockholm International Peace Research Institute reported a 4.2% rise in global arms sales to $632 billion in 2023, with Europe’s defense sector poised for further growth as orders pile up. Rheinmetall, a maker of Leopard 2 tanks, has seen its stock climb 87% year-to-date, while BAE Systems, Europe’s largest defense contractor, is up 24%. This contrasts with a mixed performance among U.S. counterparts like Lockheed Martin, suggesting Europe is seizing the moment as the U.S. reevaluates its role.