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Written by Dan SchmidtThe second-half rally in U.S. stocks this year has made it easy to forget some of the assets that outperformed at the start of the year. Cryptocurrencies have rallied back to their February peaks following a prolonged period of dormancy, and now commodities like gold and silver have also reached record highs.
European stocks spent most of 2025 outperforming U.S. equities, although that delta has narrowed lately. However, one area of the European market that hasn’t slowed down is the defense sector. In fact, as the war in Ukraine approaches its fourth anniversary, European defense contractors are becoming more intertwined with global commerce. Today, we’ll examine three companies helping to defend Ukraine and the breakout their stocks are experiencing.
European Defense Stocks Continuing Their Sharp Repricing
Russia’s ambitions far exceeded its capabilities in Ukraine, and the February 2022 invasion has now turned into a grinding altercation with no end in sight. Ukraine has even begun conducting cross-border raids in an attempt to disrupt Russian supply chains. While the war has reached more of a stalemate phase than a series of dramatic battles, pressures are increasing in some areas (i.e., drone strikes), and the outcome is vital for NATO countries. Even U.S. President Donald Trump has recently changed his tune, commenting that Ukraine could regain territory with more support.
Before the war, many defense and aerospace stocks in Europe were undervalued, and governments had restrictions on how much they could spend on defense. However, the Ukraine war was a shock to this system, causing European regulators to reevaluate their budgets. Reducing dependency on the U.S. has also become a goal for European governments, which has created several tailwinds in favor of the defense industry.
3 European Defense Stocks to Watch as Tensions Roll On
The war in Ukraine requires advanced systems, such as integrated air defense systems, so large companies offering modern solutions will likely earn the most lucrative contracts from European governments. These three large-cap stocks appear to be among the biggest beneficiaries of Europe’s renewed defense commitments, with share prices surging to new all-time highs and structural tailwinds in place for a prolonged uptrend.
Note that all three securities are American Depository Receipts (ADRs), which function differently from typical shares. Be sure to understand the contrasts before investing any capital.
Rheinmetall: The Primary Beneficiary of Germany’s Debt Brake Reform
German defense giant Rheinmetall AG (OTCMKTS: RNMBY) has soared to new highs following reforms in the highest levels of government.
Germany’s debt brake, which limits defense spending to a certain percentage of GDP, was revised to allow the country to increase its defense budget.
Rheinmetall shares were trading under $20 before the invasion began, but are now up over 2,500% in the last five years.
And it’s not hype or sentiment: revenue growth has been stunning, and the company posted $2.7 billion in sales in the most recent quarter.
Rheinmetall started 2025 with more parabolic stock gains following a contentious White House meeting between Presidents Trump and Volodymyr Zelenskyy.
The stock cooled down over the summer, but now evidence is emerging supporting another breakout. Shares have had strong support at the 50-day simple moving average (SMA), and this new all-time high hasn’t yet led to an Overbought reading on the Relative Strength Index (RSI).
Saab: Stagnating Revenue Revived by Increased Orders
Saab AB (OTCMKTS: SAABY) may be most remembered in the U.S. for its brief foray into the automotive manufacturing business, selling its diminutive vehicles with ignition keys on the floor. However, the real strength of its business lies in defense contracting.
Saab sells military aircraft, watercraft, missiles, and other advanced systems, generating over $6 billion in revenue in the last 12 months.
But before the war in Ukraine, Saab’s revenue was stagnating, and the stock failed to soar alongside its peers once the invasion began.
What’s caused Saab’s stock to surge nearly 200% year-to-date (YTD)? A growing order book and accelerating profitability.
After a brief decline in 2022, revenue has soared, growing over 20% year-over-year (YOY) each year.
Current projections have 2025 revenue growth at 26% YOY, and the company’s Q2 2025 revenue of $2.05 billion represented a 44% YOY advance. Like Rheinmetall, Saab shares also exhibit the hallmarks of a strong technical uptrend, with support at the 50-day SMA and bullish action on the MACD.
BAE Systems: A Technical Breakout Boosting Strong Fundamentals
BAE Systems PLC (OTCMKTS: BAESY) is a British defense and aerospace company designing everything from vehicles and munitions to advanced cybersecurity solutions.
BAE Systems might be the ‘safest’ play amongst the three defense stocks we’ve listed here today.
While its growth isn’t as explosive as Rheinmetall’s or Saab’s, the company is massive with an $83 billion market cap and more than $28 billion in annual sales.
BAE Systems also has a record backlog of orders, with over $100 billion in contracts on its books (approximately £80 billion in local currency), and has recently inked a $1.2 billion contract with the U.S. government.
The daily chart for BAESY also shows promising potential. The stock has reached its first new all-time high since June, and the MACD is indicating that a bullish breakout may be in the works. Like its industry brethren, the stock has strong upward momentum, with support at the 50-day SMA. BAE Systems likely won’t provide parabolic gains, but it’s a steady revenue grower with a deep backlog and steady dividend.
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Something big is brewing in Washington.
According to my research, an executive order from President Trump could be just weeks away.
And it holds the potential to trigger one of the most explosive tech booms in US history.
At the center of it all? Robots.
Not the kind that clean your house or pour you coffee.
But the kind that could reshape entire industries, add $1.2 trillion per year to the US economy, and affect 65 million American lives — just in the next year.
This little-known company holds nearly 100 patents and trades for around $7 |
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Written by Jordan ChusslerIt’s been a tough year for Starbucks (NASDAQ: SBUX). The king of coffee retail chains has seen its stock slide more than 25% from its year-to-date (YTD) high on Feb. 23, and when it reported Q3 earnings on July 29, it missed analysts’ estimates by nearly 28%.
While some of that may reflect cyclical consumer behavior amid all-time high coffee prices—both as a global commodity and for U.S. retail prices—Starbucks has also suffered from poor optics. Multi-year protests by labor union supporters as well as a boycott campaign rooted in the Israel-Gaza conflict has bled into 2025, significantly impacting the company’s sales.
Last week, the coffee chain announced plans to close stores and conduct another round of layoffs. But as Starbucks debuts a new strategic plan to bolster sales, there are fundamental issues that may go unanswered. Meanwhile, one competitor is making waves and providing an alternative for investors looking to harness the upside potential of a company that went public in 2021 and is now the fastest-growing retail coffee chain.
Starbucks’ Struggles Aren’t Isolated to Last Quarter
Despite a small revenue increase in Q3, Starbucks saw comparable store sales as well as transactions decline significantly throughout the first second and third quarters of its fiscal year. In response, chairman and CEO Brian Niccol announced in late September a restructuring plan billed as “Back to Starbucks.”
As part of that new strategy, which entails a $1 billion restructuring, 900 non-retail employees will be laid off. This marks the second round of layoffs with Niccol at the helm, following 1,100 workers being let go earlier in 2025. Other notable features of the “Back to Starbucks” plan include the return of the condiment bar, a marketing shift away from highlighting discounts, and efforts to increase pricing transparency—for example, by removing upcharges for non-dairy milk.
However welcome those measures may be, bringing back condiment bars doesn’t appear to be the solution to more systemic issues that the company faces. In April, a lawsuit was filed against Starbucks by Brazilian workers who alleged forced labor in the company’s coffee supply chain. One month later, hundreds of its baristas across the United States staged walkouts to protest a new dress code policy, and in September, the union representing its eligible workers claimed that 59 of the locations Starbucks has decided to close were unionized stores.
The restructuring plan will come at a sizable cost, too. According to a Form 8-K filing Starbucks made with the SEC, the company is expected to have to shell out $150 million in employee separation costs (e.g., severance pay, unemployment taxes and administrative tasks such as exit interviews and payroll updates) and another $850 million in payments related to its store closures (e.g., breaking leases due to store closures before the end of contractual terms).
While the company remains a decent option for income investors—its dividend currently yields 2.81%, or $2.44 per share annually—its dividend payout ratio of 105.17% is an enormous red flag and seemingly unsustainable.
One Competitor Undergoing Rapid Expansion
While the impacts of the “Back to Starbucks” strategic plan won’t materialize for some time, it is a clear indication—underscored by downsizing its location and staffing footprints—that the company is not in growth mode.
But for investors who are dialed into America’s insatiable appetite for coffee, it isn’t all bad news. Other retailers operating in the consumer discretionary sector are providing better upside potential, stronger earnings, and better growth prospects.
Dutch Bros (NYSE: BROS) continues to outperform Starbucks in share appreciation, earnings, and revenue growth. The company, which went public in September 2021, is favored among Wall Street, with higher institutional ownership at nearly 86% versus Starbucks’ 72%.
Last quarter, Dutch Bros beat on earnings by 44.44% while seeing its quarterly revenue grow 28% year-over-year. The company is expected to grow its earnings 38.60% next year. Analysts are in agreement that Dutch Bros’ performance over the next year will outperform that of Starbucks, with an average 12-month price target of $79.88 representing nearly 52% upside potential from today’s share price.
Since the stock ran up in the wake of its blowout Q2 earnings call in August, BROS has retraced nearly 30%. But it appears to have found support just above its YTD low set on April 4. With a current Relative Strength Index (RSI) reading of 29.97, the stock is considered oversold, which could foretell the start of a dramatic near-term price reversal. The last time Dutch Bros’ RSI was in oversold territory on July 24, it preceded a 27% gain through Aug. 28.
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Gold has surged past $3,600 an ounce, up 45% in the last year, but Weiss Ratings analyst Sean Brodrick says the real opportunity is in a little-known strategy that has historically outpaced gold’s rallies many times over — including one past run where investors saw gains of more than 26,000%.
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Written by Sam QuirkeHaving suffered a 70% drop followed by a 110% rally within the first eight months of the year, The Trade Desk Inc. (NASDAQ: TTD) has been one of the most volatile tech stocks of 2025. As we recently highlighted, that rollercoaster hasn’t eased since. Once seen as a reliable pure-play on digital advertising, the stock started a 50% plunge after August’s earnings, only bottoming out in mid-September. Since then, it has been consolidating and showing early signs of recovery, leaving investors divided over whether this marks the start of a genuine comeback or just another pause before further weakness.
Shares opened right around $50 on Thursday, still far below pre-earnings levels but already more than 10% above September’s low. Importantly, support at $43 has now held for the second time this year, creating a base that bears have failed to break. The comeback case is building, but the stock isn’t out of the woods just yet. Here are two of the top reasons to think a comeback has officially begun, and one reason to think it’s still some time away.
Technical Momentum Returns
The first sign that The Trade Desk’s recovery has legs comes from the chart. A bounce of more than 10% from early September lows, with $43 once again acting as a hard floor, has strengthened the technical setup. Each time the stock rebounds from this level, it becomes harder for sellers to push it lower, building investor confidence that it is a meaningful support zone.
Adding to this foundation, the MACD crossed into a bullish pattern some weeks ago. It has managed to stay there into October, suggesting a trend reversal is underway, while the stock’s RSI has rebounded out of extremely oversold territory. When occurring at the same time, these signals can often mark the start of a sustained rally, especially when supported by other tailwinds. For a stock that has looked technically broken since August, the past two weeks have brought much-needed signs of life.
Product and Market Tailwinds Build
The second reason to believe in a comeback lies in The Trade Desk’s fundamentals and positioning. Earlier this week, the company announced its Audience Unlimited data marketplace, which it called a “major upgrade”. It will leverage artificial intelligence and “help advertisers understand the relevance of all data sources to their campaigns”.
The market reaction was immediate, with shares jumping as much as 7% on the day of the announcement. That kind of response shows there is still a genuine desire on Wall Street to believe in The Trade Desk’s innovation pipeline and its ability to stay relevant.
Beyond that, the broader digital advertising market is stabilizing after a period of softness, with many of the Wall Street analysts also reiterating their bullish stances. Guggenheim, for example, earlier this week refreshed their Buy rating on The Trade Desk, echoing similarly bullish moves by Needham and UBS last month.
Competition Still Looms Large
However, there is at least one reason this comeback might not stick, and that’s competition. The Trade Desk operates outside the walled gardens of some of its bigger peers, a positioning that has always been both a strength and a weakness. Independence gives it flexibility, but it also means constantly battling against giants with far deeper pockets and unmatched scale.
Alphabet Inc (NASDAQ: GOOGL), in particular, continues to dominate digital ad infrastructure, while platforms like Amazon.com Inc (NASDAQ: AMZN) are making rapid gains. This puts pressure on The Trade Desk to consistently innovate while managing margins. If the giants intensify their push into programmatic advertising, The Trade Desk could find itself forced to spend more heavily to defend its turf.
Analysts Remain Unsure
Wall Street has not ignored this risk. Morgan Stanley recently moved to the sidelines, citing mounting concerns over slowing growth and intensifying competition. JMP Securities also expressed similar concerns earlier this week, cautioning investors that the ad-tech industry is among the most saturated sectors in the digital economy.
Still, even with this cautious remark, they maintained their Market Outperform rating on the stock, while giving it a fresh price target of $60. From the $50 that shares of The Trade Desk were trading on Thursday morning, that’s a solid 20% in targeted upside.
Taken together, these updates highlight the risks but also reinforce the bull case that a comeback is starting to get underway—even if the stock still has more to prove against its bigger rivals.
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