La Frankfurt Stock Exchange has its own Queen of 2025 And his name is RheinmetallSince the beginning of the year, shares of the German defense giant have soared 164,4%, with a year-over-year increase of nearly 192%. The stock is being driven by an international climate marked by wars and geopolitical tensions, primarily the conflict in Ukraine, which has led Germany and Europe to strengthen their military capabilities. Between national programs, community initiatives, and NATO spending commitments, the sector defense has returned to the spotlight of investors.
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Rheinmetall: From Munitions Factory to Defense Giant
Founded in 1889 a Düsseldorf by Heinrich Ehrhardt, Rheinmetall started as small workshop to produce cannons and seamless pipes, soon obtaining important military contracts. The company grew rapidly: during the First World War, it employed 8.000 people, and after the conflict, it diversified its production into locomotives, agricultural machinery, and typewriters due to the restrictions of the Treaty of Versailles. In the XNUMXs, with the merger with Borsig, it became Rheinmetall-Borsig AG and participated in the German rearmament. Bombed during the Second World War, military production resumed only in 1956, when the company returned to operating as a Rheinmetall AGToday the group, with divisions in armaments and automotive, factories in Germany and Italy, and a joint venture including Leonardo Rheinmetall Military Vehicles remains a major European player in defense systems and high-tech components.
Rheinmetall, Queen of the Dax: German and European Rearmament Boom
2025 is the golden year for the title, driven by the maxi 400 billion euro rearmament plan approved in March by Bundestag, which puts decades of German military caution to rest. The European program also supports this. ReArm Europe, designed to strengthen the war industry and coordinate purchases among member countries, and the announcement NATO to raise military spending to 5% of GDP, more than doubling the current 2% (of which approximately 1,5 percentage points are allocated to related civilian infrastructure). This context has fueled a climate of cautious optimism among investors, with Rheinmetall considered among the companies best positioned to benefit from European rearmament.
In recent weeks, however, there have been some signs of slowdown: the second quarter accounts have disappointed expectations on revenues and margins. The recalibration of the German industrial strategy and delays key orders have been postponed in the budgets. Geopolitical uncertainties also weigh on the situation, including theUS-EU agreement on duties and arms supplies and the expected meeting between Vladimir Putin and Donald Trump in Alaska, which could reduce the perceived urgency of rearmament. Yesterday, however, the stock closed up 2,18%.
Frankfurt Stock Exchange: Who shines beyond Rheinmetall?
Rheinmetall's performance outperforms that of the other DAX giants, but 2025 also sees other success stories shine. Commerzbank, the fourth largest bank in Germany after Deutsche Bank, DZ Bank and KfW, recorded a +136,76% since the beginning of the year (+199,27% on the year), supported by a double-digit growth in profitability in the second quarter and by the increase in 2025 guidance. However, the bank is also in the spotlight for the Unicredit takeover, which rose to 20,17% of the voting rights (29,34% including financial instruments). The move, however, met with strong opposition from the German Government, determined to keep the institute independent and to discourage any takeover by CEO Andrea Orcel.
Siemens Energy, specializing in solutions for energy production and transmission, is riding the demand for infrastructure and green transition (+93,71% since the beginning of the year, +298,38% on the year). Deutsche Bank, the main German banking institution, gained +83,91% since the beginning of the year (+132,44% on the year) benefiting from the best first half of the year since 2007. Finally, Heidelberg Materials achieved a +70,73% (+133,98% in one year), driven by major infrastructure plans worth 600 billion over ten years and a record profit of 1 billion in the quarter.
These five stocks are the real stars of the DAX 2025, confirming Frankfurt (+20,8% since the beginning of the year) among the best performing stock markets in Europe, after Madrid and Milan.
DAX: Frankfurt's Worst-Performing Stocks Since the Beginning of 2025
While Frankfurt can boast some impressive stories on the upside, some of the downsiders stand out. Adidas It has lost 29,02% since the beginning of the year, weighed down by uncertainty over US tariffs, weakness in end markets, and the strengthening of the euro, which is eroding foreign revenues. Zalando (-26,91%), suffers from downwardly revised forecasts and strong competition in e-commerce. Symrise, a leader in the production of flavors and fragrances, fell by 23,49%, affected by the slowdown in global demand which prompted the group to cut its 2025 growth guidance, despite increasing margins and a 40 million euro efficiency plan. Porsche marks a -21,75%, with profits down 40% and a new cost-cutting plan to address the crisis in the auto sector and the slowdown in the electric sector.
