
Saab, Leonardo, and Rheinmetall: Top Picks in New Global Defense Supercycle
Geopolitical tensions, including Russia’s invasion of Ukraine and Indo-Pacific tensions, are fueling a new global defense supercycle. European defense budgets are set to grow 6.1% annually from 2023 to 2035, outpacing the US (1.7%), Russia (3.2%), and China (3.1%) as Europe addresses decades of underinvestment and seeks greater autonomy from the US.
Europe’s share of global defense spending is projected to increase from 16% to 21% by 2029, stabilizing through 2035. Meanwhile, the US, having steadily increased defense spending since 2017, is projected to increase its budget in line with GDP, reaching 3.3% by 2035, down slightly from 3.5% in 2024. In the midterm, both regions will prioritize munitions and off-the-shelf equipment to meet near-term needs.
