The 32 member countries of NATO reached a historic decision at the summit held on June 25 in the Netherlands. Members agreed to increase their defense spending to 5% of their Gross Domestic Product (GDP); this target will be implemented by the year 2035.
Following this decision, the German defense industry giant Rheinmetall strengthened the major momentum it had gained after U.S. President Donald Trump’s demand for defense spending to reach 5% of GDP. With these developments, the company’s market value soared from $4.1 billion to $91 billion, surpassing many long-established German brands. This striking rise highlights the impact of international defense policies on corporate valuations.
Europe’s Leading Supplier: The Rise of Rheinmetall
Under the leadership of CEO Armin Papperger, Rheinmetall became Europe’s largest supplier of ammunition and armored vehicles following the outbreak of the war in Ukraine. The company’s Leopard 2 tanks and Lynx armored vehicles have played a critical role in Ukraine’s defense.
Rheinmetall has rapidly expanded, establishing new production facilities in Spain, Hungary, Latvia, and Ukraine. It is also continuing the construction of Europe’s largest ammunition factory in Germany. As reported by The Washington Post, the company’s soaring market value has even surpassed that of long-standing German brands.
Record Order Backlog and Strong Demand Outlook
While Rheinmetall expects its annual revenue to increase by 25–30% this year, its order backlog has exceeded $75 billion. CEO Papperger emphasizes that even in the event of a cease-fire, demand for defense industry products will remain strong due to European countries’ depleted military stockpiles.
Source: C4Defence / Washington Post
