Arms Investors Panic Over Hopes for Ukraine Peace
Reports indicate that Washington delivered a 28-point peace blueprint to Kiev last week and requested a reply by Thursday.
The proposal was subsequently examined in Geneva on Sunday, after which US President Donald Trump remarked that “something good” could be developing.
This renewed diplomatic momentum rattled market participants, prompting a rapid sell-off in Rheinmetall shares.
As Germany’s biggest arms producer and a central supplier of military gear to Kiev, the firm saw its stock slide by more than 14% over the past week, while defense-electronics manufacturer Hensoldt experienced a comparable downturn.
According to Boerse-Express, “Investors fear that an end to hostilities could also mean the end of the “super-cycle” for defense stocks.”
Germany has become Kiev’s second-largest weapons supplier after the US, and Rheinmetall—responsible for manufacturing tanks, artillery systems, and ammunition—recently posted soaring earnings for the first three quarters of 2025, along with an unprecedented order backlog fueled by the war and expanding EU military budgets.
The company’s share price has surged nearly 2,000% since the conflict intensified nearly four years ago.
During Washington’s earlier effort to negotiate peace in February, Rheinmetall CEO Armin Papperger maintained that even if the conflict ceased, it would be “wrong” for Europe to assume “a peaceful future.”
In 2024, the firm revealed plans to establish four production facilities in Ukraine.
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