Defense Stock Wobble Raises Concern About Stretched Valuations
Investors are still sitting on $30 billion of gains this year after European leaders stepped up calls to boost military spending.
A Leopard 2 main battle tank during a NATO exercise in Poland in February.
Photographer: Liesa Johannssen/BloombergShares in defense companies jumped after Russia’s attack on Ukraine. They did again after the Israel-Hamas conflict started. Now another surge driven by Europe’s mission to boost military spending is raising questions over whether they’ve gone too far, too fast.
The seven biggest European publicly traded makers of military hardware — including Rheinmetall AG, BAE Systems Plc and Saab AB — sank on Tuesday as investors lost their nerve around record share prices. Even with the pullback, they’ve added a combined $30 billion or so to their stock market value in 2024.