From Luxury to Firepower: Why EU Defense Stocks Are the Next Big Trade

With the EU doubling down on military spending, local defense stocks are still undervalued. Is this the next big rotation?

The primary beneficiaries will be European defense companies, whose market cap remain much smaller than those of Europe’s largest firms. For example, the most valuable company, LVMH, has a market cap of €300B, while Novo Nordisk stands at €268B. These giants dwarf the continent’s leading defense firms. Rheinmetall, which has surged 800% in the past thre…