Look, I’m not saying we’re on the brink of a global conflict… but let’s just say Rheinmetall shareholders are having a very different kind of year than the rest of us. Germany’s biggest defense company just posted an earnings report so strong it makes GameStop’s 2021 rally look like a rounding error (ok, it’s not that good, I’m being a little dramatic). The stock is up 36% in 2025 and nearly 90% over the last year… a weird dynamic, considering what’s driving demand.

Germany used to be known for luxury cars that break down the second your warranty expires and kitchen gadgets priced like rent in Manhattan. But lately, the country’s biggest industrial bragging right is manufacturing weapons. Rheinmetall has fully embraced its role as Ukraine’s “most important defense industry partner,” repurposing old car factories into arms plants.

The company is scaling up in a big way, breaking ground on three new factories inside Ukraine to meet the ever-growing demand. If their earnings report is any indication, business is booming. Sales are up 36% this year, with defense revenue alone skyrocketing 50% (nothing like a war to drive sales). Operating profit jumped 61% to $1.61 billion, and their order backlog has ballooned to a staggering $55 billion. And they’re just getting started—management expects another 25-30% sales growth in 2025 (because if history has taught us anything, it’s that conflicts don’t wrap up quickly).

Profitability is looking just as healthy. Operating margins climbed from 12.8% to 15.2% (because when your customers are governments, price sensitivity isn’t exactly a thing). CEO Armin Papperger, of course, is out here spinning this as a noble mission rather than a financial windfall. He’s waxing poetic about “facing the challenges of Zeitenwende 2.0” like he’s delivering a TED Talk, all while his company’s stock chart is doing its best SpaceX impression. “We have massively increased our capacities already and will continue to do so,” he said, likely while toasting a room full of ecstatic investors.

Then came the obligatory nod to responsibility: “We are aware of our responsibility for the security of our country and for the defense capability of Europe.” In other words: “Yes, war is awful… but also, please check out these record-breaking Q1 numbers.” On the other hand, Trump is making it very clear that if Europe doesn’t start paying its fair share for defense, the U.S. might just sit the next war out. That’s got European leaders rushing to buy weapons.

No shocker then that JPMorgan just hiked its price target for the stock to $1,308 (because even Wall Street knows where the money is flowing).

But Rheinmetall has far bigger ambitions than supplying Europe with weapons. Papperger has made it crystal clear that the company isn’t content being your average defense contractor. With 50% sales growth in their defense segment, they’re making moves to become a global powerhouse. Lockheed Martin and Raytheon better keep an eye out because there’s a new arms dealer in town, and it wears lederhosen (surprised I spelled that right).

If you bought Rheinmetall stock last year, congratulations… you’re probably feeling like a genius. If you didn’t, well… the company still thinks there’s plenty of room to run. As Europe comes to grips with the fact that Russia isn’t about to call it quits anytime soon, defense stocks are beginning to feel less like risky wagers and more like reliable investments.

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Stocks.News hs positions in JPMorgan and GameStop mentioned in article.