Implications of a Ukraine Peace Plan for Europe's Defense Expansion

Written by Emily J. Thompson, Senior Investment Analyst

Source: CNBC

Updated: Nov 20 2025

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Source: CNBC

European Defense Stocks Outlook: Market analysts believe the bull run on European defense stocks will continue despite ongoing discussions about a potential peace deal in Ukraine, with significant growth expected due to increased defense spending commitments from NATO and European governments.
Impact of Peace Deal Rumors: Reports of a possible peace agreement have caused short-term volatility in defense stocks, but experts suggest that long-term growth remains likely as countries will still need to replenish military supplies and modernize their capabilities.
Investment Sentiment: Analysts emphasize that the structural drivers behind European defense spending, such as underinvestment and the need for strategic autonomy, will persist regardless of the outcome of peace negotiations, ensuring sustained demand for defense capabilities.
Future Defense Spending Trends: Experts predict that NATO countries will continue to increase defense spending, potentially reaching 5% of GDP, which will support the defense sector even if production orders slow down due to a peace deal.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.