Core Viewpoint - Defense stocks are expected to have a strong year in 2026 due to increased military spending driven by geopolitical tensions and uncertainty in global relations [1][3]. Group 1: Market Trends - A Goldman Sachs basket of European defense companies has surged in January, following a 90% advance in 2025, indicating heightened investor interest in military spending [3]. - Analysts at Morningstar Inc. predict that European defense stocks could rise by an average of 20% this year, influenced by domestic economic conditions and US spending [4]. - The call for a $500 billion increase in the US defense budget is contributing to gains in the defense sector, benefiting companies globally [4]. Group 2: Key Companies - Rheinmetall AG has become a favorite among investors, following a record 150% jump in 2025 and continued gains in January [5]. - Portfolio managers highlight Rheinmetall as a top pick, with Saab AB and Kongsberg Gruppen ASA also seen as beneficiaries due to their geographic proximity to Greenland [6].

Group 1 - A German contractor, an Italian aerospace company, and a British defense firm are mentioned, indicating a collaboration or involvement in a project [1]