Europe’s Defense Renaissance: Structural Tailwinds Amid Costly Valuations

The featured DWS CIO Special analyzes Europe’s accelerating rearmament trend and its long-term implications for investors in the defense sector.

• After decades of underinvestment, European nations are boosting defense spending toward 3% of GDP by 2030, driven by heightened geopolitical risk and NATO commitments.

• Despite steep valuations—defense stocks now trade at twice the market’s earnings multiple—the sector’s government-backed revenues and scalability offer durable growth potential.

• Selectivity is key: investors must differentiate among defense, aerospace, and cybersecurity firms positioned for technological adaptation.

Explore how Europe’s strategic pivot could redefine the region’s industrial and investment landscape for the decade ahead.