German Defence Stocks Surge Amid Ongoing Military Investment

German defence companies listed on the stock exchange are experiencing significant growth as global demand for military equipment and technology continues to rise. The recent entry of Vincorion, a specialist in energy solutions for military applications, marks another milestone for the sector as it seeks additional capital through public markets.

Vincorion, headquartered near Hamburg, made its debut on the stock market with shares opening at EUR19.30 and closing at EUR18.70, well above the initial offer price of EUR17. This strong start reflects heightened investor interest in the defence industry, which has seen robust activity since the beginning of the Ukraine conflict. Vincorion, formerly part of Jenoptik and now majority-owned by the British investment firm Star Capital, reported a 2025 revenue of EUR240 million and an order backlog of EUR1.1 billion. The company manufactures mechatronic systems, generators, and energy management solutions for tanks and air defence systems.

The positive trend extends across Germany's major defence firms:

• Rheinmetall: As the country's largest defence contractor, Rheinmetall has posted new records in revenue and order volume. Its portfolio includes tanks, artillery, ammunition, military trucks, drones, and more recently, naval vessels and components for advanced aircraft like the F-35. The company aims to increase its revenue fivefold to EUR50 billion by 2030 and double its workforce to 70,000. Since early 2022, the share price has climbed from under EUR100 to over EUR1,500, though recent months have seen a slight correction as market expectations have intensified.
• Renk: Based in Augsburg, Renk specializes in gear systems for military vehicles and has similarly benefited from increased defence spending. With a 2025 revenue of EUR1.4 billion and a backlog of EUR6.7 billion, Renk's stock value has quadrupled since it went public two years ago, although it has also experienced recent fluctuations.
• Hensoldt: This electronics firm, spun off from Airbus, produces radar and sensor systems for military platforms. Its shares have surged sixfold since the start of the Ukraine war, as the need for advanced detection and early-warning systems has grown. Hensoldt's headquarters are located in the Munich area.
• Heckler & Koch: While the small-arms manufacturer is technically listed, its shares are thinly traded due to low free float. Initially intended to raise capital, the partial listing has mostly served as a forum for shareholder activism, but the company has returned to profitability amid increased demand for personal weapons.
• ThyssenKrupp Marine Systems (TKMS): The naval shipbuilding division of Thyssenkrupp went public in late 2025. It boasts an order book of EUR18.7 billion and continues to expand its operations, including the transformation of a shipyard in Wismar to produce submarines and the construction of new frigates for the German Navy. Thyssenkrupp retains a majority stake in TKMS.
• Gabler: A newcomer to the stock market, Gabler produces periscopes and control systems for submarines, as well as marine technology for scientific and industrial use. With 240 employees and EUR70 million in revenue, Gabler's entry signals the broadening scope of investable defence firms in Germany.

Looking ahead, KNDS--a joint Franco-German venture formed by the merger of Krauss-Maffei Wegmann and Nexter--is preparing for a stock market listing. The group, jointly owned by German and French stakeholders, manufactures tanks, artillery, and air defence systems. Its upcoming initial public offering is expected to further increase investor interest in the sector.

The ongoing conflict in Ukraine and heightened security concerns across Europe have triggered a surge in military spending and procurement programmes, positioning German defence companies for sustained growth. The influx of capital from public markets is enabling these firms to expand production capabilities, invest in new technologies, and meet the evolving requirements of allied nations.