A new diplomatic dynamic is raising hopes for a possible end to the Ukraine conflict and presenting investors with a complex question. While any news of peace puts pressure on defense stock prices in the short term, structurally increased defense budgets and an ongoing modernization cycle are driving the industry forward in the long run. The real opportunity lies in the shift from an acute crisis to a predictable, steadily growing security industry. We analyze the starting positions of Rheinmetall, Almonty Industries, and thyssenkrupp.
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Rheinmetall – Ending the year with operational momentum
Rheinmetall continued its strong order momentum in December. One of the most important orders is the delivery of the Trailblazer sighting system for the NATO Support & Procurement Agency (NSPA), which will be integrated into the combat upgrade of the British M270 A2 MLRS multiple rocket launcher. Delivery is scheduled to begin as early as 2026. This order consolidates the position of the system, which is already installed in tanks such as the Challenger 3, as the standard in the British Army. At the same time, the Group completed the acquisition of ammunition specialist Muni Berka, significantly expanding the urgently needed storage capacity for the rapidly ramped-up production of artillery shells.
These recent activities are part of a larger transformation. The Company is increasingly positioning itself as a systems provider in new domains. The partnership with Lockheed Martin for the GMARS wheeled artillery system targets the growing market for precision, long-range missile defense. At the same time, Rheinmetall is pushing ahead with digitalization, for example, through a joint venture with satellite operator ICEYE for space-based reconnaissance and the modernization of the German Armed Forces’ combat training center. These initiatives are intended to open up higher-margin business areas in the long term.
For the coming year, the focus will be on integrating the latest acquisitions and scaling up production capacities. The full commissioning of the expanded storage infrastructure at Muni Berka will be crucial for the smooth flow of planned ammunition production. In addition, projects such as Trailblazer deliveries and the expansion of digital training infrastructures will generate concrete revenue. The strategic realignment to a pure defense company is expected to continue in 2026, giving the Company a sharper profit profile that investors will be watching closely. The stock is currently trading at EUR 1,604.00.
Almonty Industries – The reorganization of the tungsten market
While lithium and copper dominate the headlines, a fundamental shift is taking place in the tungsten market. This strategic metal, which is indispensable for defense, semiconductors, and precision tools, is becoming scarce globally. China, which controls over 80% of the global supply, has imposed strict export controls on tungsten since February 2025, driving up prices. This political shift is forcing Western industries to rethink their supply chains and opens up a historic window of opportunity for non-Chinese producers. One company is taking full advantage.
At the center of this development is Almonty Industries (TSX:AII). The Company is about to transition its flagship project, the Sangdong Mine in South Korea, into commercial production. Commissioning is underway, with initial sales revenues expected early next year. At the same time, Almonty is expanding its presence in North America. With the acquisition of the Gentung Browns Lake project in Montana, the Company has secured a strategic position in the US. The project is not notable for spectacular discoveries, but for its pragmatism. It has existing permits, water rights, and infrastructure. This paves the way for planned production starting in 2026.
To finance this ambitious expansion, Almonty has recently strengthened its capital base significantly. The Company announced that it has completed a public offering of common shares in the US with gross proceeds of approximately USD 129 million. These funds are earmarked for the development of the Montana project, the expansion of the mine in Portugal, and work in Sangdong. The message from management is clear. The Company is now fully financed to implement the projects and does not intend to carry out any further capital increases for the time being. For investors, Almonty is thus one of the few pure bets on a Western tungsten supply that is currently making the transition from the development phase to large-scale production. The share is currently trading at USD 6.80.
The past fiscal year brought mixed results for thyssenkrupp. In operational terms, the group was able to slightly increase its adjusted operating profit and report positive free cash flow. However, this apparent stability is deceptive, as the balance sheet was improved by value-enhancing special effects. The real challenge lies in the future. The Company expects a significant net loss for the current year. This gloomy forecast reflects the profound problems in the steel business, while other segments, particularly the marine sector, are reporting impressive order books.
The core of the change lies with Steel Europe. A radical restructuring process is underway here, which is entailing massive financial burdens. A comprehensive social plan has been agreed with the workforce, which provides for the reduction of thousands of jobs and a significant reduction in capacity. High provisions must be set aside for this restructuring, which is a major factor in the expected annual deficit of up to EUR 800 million. At the same time, negotiations are underway with potential investors to give the business a long-term perspective. In the short term, these costs are weighing heavily on the balance sheet.
The maritime subsidiary TKMS presents an entirely different picture. Its successful stock market listing and inclusion in the MDAX underscore the strength of the business. With a record order backlog and buoyant cash flows, the Company acts as a financial and strategic stabilizer. This contrast demonstrates the new corporate strategy in action. The financial holding company thyssenkrupp is gradually divesting itself of operational burdens and creating independent, capital market-ready units. For investors, the development of TKMS and the outcome of the steel transaction will continue to be the decisive value drivers. The share price is currently trading at EUR 8.81.
The possible end of the war in Ukraine does not mark a turning point for the defense industry, but rather signals the transition to predictable, structural growth. Rheinmetall is driving forward its transformation as a system provider with digitalization and acquisitions. Almonty Industries is seizing the historic opportunity to establish a non-Chinese tungsten supply as a fully financed producer. thyssenkrupp is caught between the costly steel restructuring and the record high in the marine business. For investors, the real opportunity lies in the long-term trend toward increased security, not in short-term peace shocks.
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