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For decades, Europe enjoyed one of the greatest financial benefits imaginable.
America paid much of the bill for its security.
While European governments spent money on infrastructure, healthcare, and social programs, the United States maintained an enormous military presence across the continent.
That arrangement worked reasonably well for generations.
But now, everything’s changing.
Russia’s invasion of Ukraine shattered Europe’s sense of security. Questions about America’s long-term military commitments have only accelerated the shift. And European leaders have reached a conclusion that would’ve been almost unthinkable a decade ago.
Europe needs to prepare for war. And it needs to build the weapons itself.
For investors, this could create one of the largest defense spending opportunities in modern history.
Last year, the European Union unveiled its Readiness 2030 initiative, designed to mobilize as much as €800 billion in additional defense investment.
That’s roughly $900 billion at recent exchange rates.
And this isn’t just political rhetoric.
According to the European Defence Agency, EU military spending reached a record €418 billion in 2025, up 20% from the previous year.
Spending is projected to climb another 8.6% to €454 billion in 2026.
That’s an extraordinary amount of money.
But here’s the part I find especially interesting.
Europe doesn’t just want to spend more on defense. It wants to spend more of that money at home.
Under the EU’s defense industrial strategy and readiness roadmap, European governments are working toward sourcing at least 55% of defense investment from European manufacturers by 2030.
They’re also targeting 40% joint procurement by the end of 2027.
These are policy goals rather than blanket bans on American suppliers. But the direction is unmistakable.
Europe wants its own factories, its own supply chains, and greater control over the technologies needed to defend itself.
And that could create enormous opportunities for European defense companies.
Let’s start in Germany.
Rheinmetall (RNMBY) has become one of the most recognizable beneficiaries of Europe’s military buildup.
The company manufactures ammunition, armored vehicles, weapons systems, and other critical military equipment.
And business is booming.
Last week, Rheinmetall reported that revenue for the first nine months of 2026 surged 38% to €8.4 billion. Operating profit jumped 69%.
That’s the kind of growth you rarely see from an established industrial company.
However, project delays also forced management to adjust its full-year outlook. Even with record demand, converting military budgets into actual deliveries takes time.
If Rheinmetall sounds familiar, I originally recommended it in May 2023 before it rallied 7X in less than three years.
Next, let’s head to Britain.
Rolls-Royce Holdings (RYCEY) is best known for aircraft engines, but its defense business is becoming increasingly compelling.
The company supplies propulsion systems for military aircraft and nuclear reactors for Britain’s submarine fleet.
Its defense division reported 17% revenue growth during the first half of 2026, with a backlog of approximately £17.5 billion.
And the AUKUS submarine partnership between Britain, Australia, and the United States could support demand for decades.
Finally, there’s another German company that many American investors probably haven’t heard of.
Hensoldt (HAGHY) develops radar, electronic warfare, and advanced sensor systems.
Think of the technology that helps military forces detect incoming missiles, track drones, and identify threats before they strike.
As modern warfare becomes increasingly dependent on electronics and AI, companies like Hensoldt could become just as important as traditional weapons manufacturers.
Here’s something investors need to understand.
Europe can announce enormous defense budgets tomorrow, but that doesn’t mean factories can immediately double production.
The continent faces shortages of skilled workers, manufacturing capacity, and standardized equipment. Complicated procurement systems can delay contracts for years.
And after big rallies in many defense stocks over the last few years, valuations were a legitimate concern. However, the entire sector has pulled well back from the highs and valuations are now once again attractive.
Europe spent decades allowing its defense industry to shrink relative to its strategic needs.
Now it’s attempting to reverse that trend in just a few years.
That’s not a normal spending cycle. It’s an industrial transformation.
And tomorrow, we’re going to examine a critical weakness in America’s own military supply chain.
Because the next generation of warfare isn’t just about drones, missiles, and advanced weapons.
It’s also about the specialized materials and technologies required to manufacture them.
I’ve been researching a little-known American company connected to a breakthrough with roots in the U.S. Naval Research Laboratory.
And I’ll reveal the full story tomorrow at 2 p.m. ET in my special presentation, The Edison Prophecy.
Save your free seat right here.
Europe is preparing for a future it hopes never arrives.
But the investment opportunities created by that preparation are already taking shape.
