Back to blog

What to Invest In? Top 5 Arms Companies to Diversify Your Portfolio

In today's uncertain times, the defence and security sector is one of the most sought-after in today's uncertain times. Why? At a time of global conflicts and record state defense budgets, the door is opening for companies with billion-dollar contracts, technological dominance and the power to dictate the pace of the market. This is an industry where uncertainty brings opportunities, and investors who enter early can earn more than just a steady return.

What to Invest In? Top 5 Arms Companies to Diversify Your Portfolio

A strong player from Italy

The Italian company Leonardo is one of the largest manufacturers in the field of defence, security and space technologies in Europe. The company is known for its broad focus, and its dominance is especially visible in connection with the production of helicopters, radar systems and defense IT solutions. Thanks to its strong presence in NATO countries and an extensive product portfolio, Leonardo has a stable position in the market, and in addition, the current increased demand for modern sensors and combat systems significantly supports their growth. This is also reflected in the development of the share price, which increased by almost 100%1 from the beginning of 2025 to mid-March, which was also greatly helped by a year-on-year growth in sales of 11.1%.*

French technological backbone

Another promising technology company is Thales Group, which is not only active in the defense sector. The scope of the company, whose share price has similarly risen by more than 90%2, extends to aerospace, cyber security and civil solutions.* The company is characterized by a strong focus on the development of communication systems and the protection of critical infrastructure. Looking at the factors affecting stability and growth, it is crucial in this case to highlight French state contracts, which contributed to a year-on-year growth in consolidated net profit of 39%, as well as involvement in European Union projects.

German leader in ground technology

Rheinmetall, the largest manufacturer of ground equipment from Germany, specializes primarily in combat vehicles, artillery systems and ammunition. Recently, we have noticed the efforts of the German government to expand the armed forces, which of course plays into the hands of Rheinmetall. In connection with this, the share price increased by as much as 140%3 in the period under review from the beginning of the year to mid-March, along with a year-on-year growth in sales of 35%, thus surpassing the already solid growth of the competition.* If we were to evaluate this company, it is clearly a European leader in terms of production and development capacity.

The engine of French innovation

Given that diversification is essential, Safran acts as a leading supplier of aircraft engines, evacuation devices and specialized optical systems for military use. As it follows from the selection of previous companies, a strategic advantage in a certain area is absolutely necessary. Safran's strength lies in the fact that it works closely with GE on the production of engines for NATO aircraft. At the same time, however, it is also involved in the development of key defence technologies across the EU. Another advantage for the investor is that the share price is down about 20%4 from the absolute peak, while adjusted sales, reflecting the company's fundamental background, are growing by 17.8% year-on-year.*

British defense giant

The last on the list is the largest British defense company, BAE Systems, whose share price is growing by a more modest 50%5, but at the same time the demand for this company's solutions is growing by 32.4%.* The main business of this giant is the production of combat vehicles, related electronics, naval systems and military software. What is very important in this case is that the company maintains a close partnership with NATO, as well as with the USA. This reflects its stable income stream, which is usually reflected in the quarterly results, which to some extent affect the development of the price of their shares.

Conclusion

The defense sector as an investment anchor. These companies hold a key position in a balanced investment portfolio within the framework of sectoral diversification, and in the current market environment, they also provide protection against price declines of leading US technology companies. This, and inherently their financial performance, growing order volume and involvement in long-term strategic projects, make them attractive opportunities for investors looking for stability, long-term growth and portfolio diversification.

* Historical figures are not a guarantee of future returns.

Warning! This marketing material is not and should not be construed as investment advice. Data relating to the past are not a guarantee of future returns. Investing in foreign currency can affect returns due to fluctuations. All securities trades can lead to both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which is subject to change. These statements do not guarantee future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s., regulated by the National Bank of Slovakia.

1 Leonardo's share price performance over the past five years: * https://tradingeconomics.com/ldo:im

2 Thales Group's share price performance over the past five years: *https://tradingeconomics.com/ho:fp

3 Rheinmetall's share price performance over the past five years: * https://tradingeconomics.com/rhm:gr

4 Safran share price performance over the past five years: * https://tradingeconomics.com/saf:fp

5 BAE Systems stock price performance over the past five years: * https://tradingeconomics.com/ba:ln

Resources:

https://www.leonardo.com/en/business

https://www.thalesgroup.com/en/global/group#ourmarkets

https://www.rheinmetall.com/en/company/divisions/our-divisions

https://www.safran-group.com/companies?page=1

https://www.baesystems.com/en/our-company/our-businesses

Read more

Apple and the Foldable iPhone: Could It Set New Sales Records?

Apple and the Foldable iPhone: Could It Set New Sales Records?

The first news about the possibility of starting production of a foldable iPhone bypassed technology enthusiasts at the end of last year, but unfortunately at that time it was only preliminary information, without a broader basis. We are currently in the middle of 2025 and analyst Ming-Chi Kuo of TF International Securities, a renowned expert on the Asian supply chain, commented on the situation. According to him, production of the foldable iPhone is likely to begin as early as 2026. Investors should not miss it, as this novelty would potentially have a chance to push stagnant sales.

Meta and Scale AI: What Will Zuckerberg Gain From the $14 Billion Bet?

Meta and Scale AI: What Will Zuckerberg Gain From the $14 Billion Bet?

At the beginning of last week, the first speculations appeared on the market about one of Meta's largest investments, namely the acquisition of a minority stake in the startup Scale AI founded by Alexander Wang. Preliminary information was subsequently confirmed on Friday, which also led investors to think about the possible impacts. Will Meta be able to reach the very top of AI innovation thanks to the new collaboration, or are the expectations too high? Will we see a new absolute high for Meta's share price soon?

Looking to Diversify Beyond U.S. Equities? M2C Is Going Public!

Looking to Diversify Beyond U.S. Equities? M2C Is Going Public!

When in 1992 a group of students decided to establish a company with the aim of providing services, probably none of them knew that three decades later, the company would stand on the threshold of the Prague Stock Exchange and head to America. Mark2 Corporation, M2C, has moved from a simple Facility Management (FM) to a high-tech ecosystem of services, which today operates in 13 countries in Europe, is expanding to the Middle East and the United States, and is preparing for an initial public offering (IPO) that you will soon be able to use.

The Biggest Drop in Tesla's History, Disputes with Trump, and the Uncertain Future of Electromobility

The Biggest Drop in Tesla's History, Disputes with Trump, and the Uncertain Future of Electromobility

Tesla has always been seen as a representative of technological dominance, vision, and success on the stock market. Unfortunately, since the beginning of 2025, the situation has changed and the market wants to see concrete results that the high valuation, caused by the initial euphoria, would justify. Following this comes a blow to the stock, which fell by 14% in one day, dropping the market capitalization below $1 trillion.* Should investors start worrying?