Rheinmetall’s Stock Sheds Half Its Value Even as New Plants and Partnerships Take Shape

The Düsseldorf-based defense group is delivering on some of its most ambitious production goals, yet its shares continue to trade in the shadow of a prolonged rout. On Tuesday, Rheinmetall closed at €975.00, just a few euros above its 52-week low of €902.50 set in late June. The stock has lost 46.9% over the past twelve months and now sits 51% below the record high of €1,995.00 touched on September 29, 2025. Investors appear far more focused on the company’s shifting profitability profile than on its expanding order book.

A fresh wave of short selling underscores the mood. Hedge fund D. E. Shaw disclosed a new bearish position on July 14, joining similar bets against German stocks such as Bechtle, Scout24 and Volkswagen. The short interest, which must be reported above 0.5% of shares outstanding, points to growing institutional wariness over how the defense sector is being revalued. Technical indicators reinforce the caution: Rheinmetall trades 15.4% below its 50-day moving average and 35.4% under the 200-day average of €1,510.16. The relative strength index of 35.7 suggests the stock is oversold, though not at a panic level, while the annualized 30-day volatility of nearly 69% reflects persistent jitters.

The operational picture, by contrast, is filled with milestones. On July 14, Rheinmetall confirmed that its new plant in Lower Saxony at Unterlüß had shipped the first batch of RH1412 155mm artillery rounds to Ukraine. The delivery comprises a low-five-figure number of shells, more than half of which have already arrived; the remainder is due by the end of 2026. Management aims to ramp the site’s annual output to 1.5 million 155mm projectiles by 2030, positioning it as a cornerstone of European ammunition self-sufficiency. The next day, at the NATO summit in Ankara, Rheinmetall signed a memorandum of understanding with Lockheed Martin to produce ATACMS cruise missiles at the same Unterlüß facility — the first such production outside the United States. Volume output is slated for 2027, with full capacity expected by 2029, and annual European demand is estimated at 600 to 800 units. Lockheed will simultaneously scale back its own Arkansas production to focus on the successor PrSM system.

Should investors sell immediately? Or is it worth buying Rheinmetall?

Rheinmetall has also made strides in naval and directed-energy technologies. Kuwait chose the company’s MASS decoy system for its Al-Dorra-class vessels, while Germany’s federal procurement office awarded a joint venture between MBDA and Rheinmetall a mid-three-digit-million-euro contract to develop a high-energy laser weapon system for the German Navy. The weapon is expected to reach operational capability by 2029 after a demonstrator has already completed more than 1,000 test firings against sea and aerial targets.

Yet for every advance, a setback complicates the narrative. The F126 frigate project, which Defense Minister Boris Pistorius halted in June 2026 on grounds of cost overruns and delivery delays, has turned into a legal spat. Dutch shipyard Damen, through its lawyer Peter Gauweiler, accused the ministry of a “precipitate and arbitrary” decision lacking legal basis. Rheinmetall had previously submitted a €15 billion rescue offer to complete the order, but that chapter remains unresolved. Additionally, the company missed its ambitious “Nomination” target of €20 billion, a failure that analysts say amplifies uncertainty about near-term revenue visibility.

More structural pressures are at play. The NATO summit in Ankara marked a clear doctrinal shift away from heavy armored vehicles toward air defense, drone technology, and autonomous warfare — areas where Rheinmetall is still building credentials. Analysts estimate the share of the company’s operating profit from tanks, which stood at roughly 45% in 2023, could shrink to about 20% by 2030. Rheinmetall has responded by taking over the “InterRoC VII” research project for highly automated military convoys on behalf of the German procurement agency and by pushing into rocket and laser systems. But the new high-tech segments, while growing fast, have not yet reached the scale to offset the declining tank business. The stock’s persistent weakness reflects investor demand for proof that the margin gap can be closed. With a market capitalization of €46.23 billion, Rheinmetall remains a heavy weight on the German exchange, but the market is increasingly pricing it as a technology stock rather than a traditional armor builder — and the transition is proving painful.

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