The analysis of the three popular German defense stocks Rheinmetall, Hensoldt, and Renk shows different opportunities and developments in the current market environment, which is heavily influenced by geopolitical tensions and the upcoming NATO summit.
Current Market Situation and Influencing Factors
- The NATO summit on June 24 and 25, 2025, in The Hague is in focus, as there will be discussions on increasing defense spending to five percent of the Gross Domestic Product (GDP) for member countries – of which 3.5 percent is intended to go directly into defense.
- Germany plans to increase its defense spending to initially two percent of GDP in the current year, with a possible increase to 3.5 percent in the coming years.
- These political frameworks are driving the demand for military equipment and thus the prices of defense stocks.
Comparison of the Three Stocks
| Stock | Price Development & Valuation | Special Features & Opportunities |
|---|---|---|
| Rheinmetall | Leading with over 20 billion euros market capitalization; share price increase of over 60% within a year; reached all-time high at around 1,886 euros (May 2025) | Heavyweight in the sector with billion-euro contracts from the Bundeswehr and abroad; innovation leader in combat vehicles and air defense; however, currently very little price increases on the day before the NATO summit |
| Hensoldt | Strong growth of around +167% since the beginning of the year; among the top stocks in the MDAX with significant gains before the NATO summit | Benefits from increased demand for security technology solutions; good positioning through technological innovations; more dynamic price development than Rheinmetall just before the summit |
| Renk | Also strong performance (clear gains); third place among companies in the sector according to the current ranking | Specialist in drive technology for military vehicles; benefits from the overall upswing in the defense sector |
Conclusion: Which Stock Has the Best Opportunities Right Now?
- Rheinmetall remains the heavyweight with a stable base from large contracts and technological leadership but currently offers less short-term price potential due to already high valuation.
- Hensoldt is currently showing the most dynamic development among the three, benefiting strongly from the geopolitical environment and technological innovations – here investors might see better short-term opportunities.
- Renk is a promising niche player within the sector with solid gains.
Overall, all three stocks offer good prospects in light of rising defense spending worldwide. For investors, Hensoldt might be particularly attractive currently due to its strong performance ahead of the NATO summit and its growth profile. Rheinmetall scores in the long term due to its size and innovative strength, while Renk as a specialized provider also offers solid opportunities.
This assessment is based on current stock market developments up to June 2025, as well as political frameworks surrounding the NATO summit.