Investing in Defense Stocks: A Growing Trend in Europe
Josias Fagerland, a savvy investor, saw an opportunity in the headlines calling for a stronger defense in Europe. With the government announcing a significant increase in defense spending, Fagerland decided to boost his investments in the weapons industry. “I see a growing defense industry in Europe in the coming years, and as an investor, it’s intriguing,” Fagerland explained.
### ‘Buy, Buy, Buy’ – Thousands of Investors Follow Suit
The government’s decision to allocate an extra 50 billion kroner for defense in 2025 and 2026 sent a clear message about the perceived threat from an increasingly aggressive Russia. Prime Minister Mette Frederiksen emphasized the urgency by urging the defense chief to “Buy, buy, buy. Speed is of the essence as we are falling behind.”
#### Danish Investors’ Preferred Defense Stocks:
– Saab, a Swedish company producing aircraft, advanced weapon systems, and electronics for the defense industry, saw a 59% stock increase in the past year.
– Kongsberg, a Norwegian company specializing in missiles and advanced weapon systems, experienced a 105% stock surge in the last year.
– Rheinmetall, a German company manufacturing military vehicles, weapon systems, and ammunition, witnessed a 140% stock rise in the past year.
While the Prime Minister’s statements were primarily directed at the defense chief, Michael Hyldgaard, they resonated with some investors. In February alone, more than 8,000 new investments were made in defense stocks by Nordnet’s clients.
### Rising Stock Prices Attract Investors
Per Hansen, Nordnet’s investment economist, attributed the surge in defense stock investments to a combination of factors such as geopolitical uncertainties in Europe, Trump’s unpredictability, and media coverage. “Investors tend to follow market trends and stock performance, and recent events may have sparked more interest in defense stocks,” Hansen suggested.
### Comparing Defense Stocks to Green Investments
Oscar Krogh, a 22-year-old student from Aarhus, joined the wave of investors flocking to defense stocks. Inspired by Russia’s invasion of Ukraine in 2022, Krogh initially hesitated but eventually invested in European defense companies like Rheinmetall and Airbus.
Krogh strategically chose European companies to minimize the risk of their weapons systems being used by non-European actors. He views investing in European defense stocks as a way to support Europe and Ukraine during times of conflict, likening it to investing in green technologies to promote sustainability.
In conclusion, the surge in defense stock investments in Europe reflects a growing interest among investors driven by geopolitical tensions and a desire to support European defense capabilities. As the landscape evolves, investors like Fagerland, Hansen, and Krogh continue to navigate the complex interplay between politics, security, and financial markets.