French Defense Stocks Set to Score Big While German Counterparts Soar
Paris
By Gesche Wupper, Paris
Increased interest in French defense sector products and services
While German defense stocks have been on a rollercoaster ride of growth, their French counterparts have been lagging behind. However, the increasing European defense budgets could be just the boost these French stocks need. But, they haven't landed any new contracts yet.
Recently, the appointment of Johann Wadephul as the new German Foreign Minister has sent shockwaves through the defense sector. Not only has he set German defense stocks ablaze, but he's also ignited the flames under the French defense specialists. After Wadephul agreed to ramp up NATO countries' defense spending - to 5% of their GDP at a meeting in Turkey - stocks like Dassault Aviation, Thales, and Safran were on a tear. Interestingly, Airbus, despite earning a significant portion of its revenue from passenger aircraft, didn't see the same growth spurt.
Germany's recent surge in defense spending is part of a decades-long commitment to bolster military readiness and enhance infrastructure resilience. With more than €60 billion allocated annually, the German government seeks to boost defense spending to 3.5% of GDP from its current near-term levels[2][3]. This move seems a response to the intensifying geopolitical tension and the upcoming NATO summit, which is expected to clarify spending commitments and military requirements for the next decade.
In Germany, companies like Rheinmetall, a major ammunition and armored vehicle manufacturer, and Renk, a leading maker of military gearboxes and drive systems, have benefited exponentially. Rheinmetall's order intake skyrocketed by 181% to €11 billion in Q1 2025, largely due to significant contracts with the German government[1][5]. As a result, its stock price has more than doubled this year, making it one of the top performers in the European defense sector. Analysts remain optimistic about Rheinmetall's future growth[1][5]. Similarly, Renk reported a 15% year-on-year revenue increase in Q1 2025 and anticipates further gains linked to Germany's escalating defense budget and NATO's requirements[3].
The French defense companies, including Dassault Aviation, Thales, and Safran, are well-positioned to reap the rewards of this increased European defense spending and heightened geopolitical focus. These firms supply military aircraft, avionics, and defense systems that align with NATO's growing focus on airborne surveillance, advanced weaponry, and infrastructure modernization. Airbus, which includes Dassault Aviation's military aircraft business, and Thales benefit from NATO's emphasis on airborne surveillance and satellite technology. Meanwhile, Safran stands to gain from the demand for propulsion and defense electronics[2].
In essence, the growing security climate in Europe offers a multi-year investment and business opportunity for defense contractors across Germany and France.
- The increasing European defense budgets, coupled with the escalating geopolitical tension, present a significant investment opportunity for industry players in the defense sector, particularly in France and Germany.
- The recent appointments in German politics, such as the new Foreign Minister Johann Wadephul, have sent ripples through the finance world, boosting the growth of defense stocks in Germany and igniting similar growth expectations in French defense specialists.
- Companies involved in the business of military hardware, like Rheinmetall and Renk in Germany, have seen exponential growth, with Rheinmetall's stock price more than doubling this year due to increased defense spending and high-value contracts from the German government.
- While general-news outlets discuss the surge in defense spending and its impact on German companies, technology-focused news platforms may be interested in the engineering breakthroughs and advancements in avionics, aviation, and defense electronics that these investments could foster in both French and German businesses.
