US President Donald Trump and Russian President Vladimir Putin are set to meet in Alaska on Friday to discuss a potential resolution to the war in Ukraine.
The summit marks the first in-person dialogue between the two leaders since Russia’s full-scale invasion in 2022.
While broader European equities rallied on news of the meeting, regional defense stocks initially dipped. Yet analysts say the summit – regardless of the outcome – could reinforce long-term bullish momentum for Europe’s defense sector.
With governments committed to multi-year rearmament and modernization, the meeting is widely seen as a net positive for key players like Saab and Thales.
Why Trump-Putin meeting stands to benefit European defense stocks
Whether Friday’s high-profile meeting results in a ceasefire or collapses into a stalemate, European defense stocks are positioned to benefit.
Failed negotiations will likely intensify NATO’s urgency to replenish arms and bolster deterrence.
Conversely, even a peace deal would leave Europe facing a powerful Russian military – prompting sustained investment in defense infrastructure.
As VanEck’s Dmitrii Ponomarev notes, “stockpiles don’t magically refill,” and the region’s pivot to spending 5% of GDP on defense suggests a structural shift.
Either scenario supports long-cycle initiatives, modernization efforts, and multi-year procurement – making diversified defense firms attractive regardless of short-term volatility.
That said, here’s why Sweden-based Saab and France’s Thales particularly stand out as potential investments in the wake of the Trump-Putin meeting.
Saab AB (STO: SAAB-B)
Swedish defense giant Saab stands out as a prime beneficiary of Europe’s rearmament drive. CEO Michael Johansson recently told CNBC that even with a ceasefire, “governments won’t step back and say it’s over.”
Saab’s portfolio spans air defense, surveillance, and autonomous systems, areas central to NATO’s modernization goals.
The company’s exposure to long-cycle contracts and sustainment services positions it well for steady revenue, even if urgency fades.
With shares more than doubling in 2025 and strong institutional interest, Saab stock offers both momentum and strategic relevance.
Investors seeking exposure to Europe’s defense buildout should view any pullback as a buying opportunity.
Note that Saab shares currently pay a dividend yield of 0.38% as well.
Thales SA (EPA: SO)
France’s Thales is another standout in European defense stocks, offering broad exposure across cybersecurity, aerospace, and military systems.
Its inclusion in VanEck’s $6.9 billion Defense ETF underscores investor confidence in its long-term prospects.
Thales benefits from Europe’s shift toward self-reliance in defense – with governments prioritizing modernization and digital warfare capabilities. Trump-Putin summit, even if successful, won’t erase the need for replenishment and strategic upgrades – areas where Thales excels.
With a robust pipeline and diversified revenue streams, the company is well-positioned to absorb short-term volatility and capitalize on multi-year procurement cycles. For long-term investors, Thales stock remains a compelling play.
It, however, does not pay a dividend at the time of writing.
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