The “third wave” of European defense gave birth to dark horses! Sweden's Mildef surged 80% to the top during the year, and computers and drones beat traditional military industry

The Zhitong Finance App learned that the Swedish small business Mildef Group AB became Europe's best-performing defense stock in 2026. Its CEO attributed this rise to the “third wave” wave of military spending. This phase focused more on computer systems and drones rather than tanks and ammunition in the traditional sense of the word.

Mildef Group AB specializes in products such as rugged laptops, servers, and display screens for armored vehicles. Benefiting from the continued rise in European defense spending, the company's stock price has increased by more than 80% year to date. Although the gains of large defense stocks such as Rheinmetall AG (Rheinmetall AG) and Saab AB (Saab AB) have slowed this year, Mildef's rise is accelerating.

Mildef CEO Daniel Ljungren said in an interview: “The first wave was full mobilization, focusing on combat materials such as ammunition, military boots, and tank fuel” — this refers to the emergency phase after the outbreak of the Russian-Ukrainian conflict in 2022. Subsequently, a large number of major orders went to large military industrial groups.

“We are now in the third wave, which is a higher level of this ecosystem.” Ljunggren said.

Mildef, headquartered in Helsingborg, Sweden, has garnered a series of big orders in recent months. In July, the company announced the signing of two seven-year framework agreements: one is to provide a command and control system for the Swedish armed forces, with a contract amount of up to SEK 1.5 billion (US$160 million); the other is to supply the German Bundeswehr, which amounts to 527 million euros (US$610 million).

As the focus of arms procurement shifts from traditional hardware to drones and their guidance technology, broader defense spending is benefiting other companies. The stock prices of defense technology company Kongsberg Gruppen ASA (Kongsberg Gruppen ASA) and Cohort Plc have rebounded after losing out to their peers last year, while aviation supplier Senior Plc (currently the target of the acquisition) is also at the top of the increase.

Submarine drone manufacturer Exail Technologies SA's shares soared about 50% as the Hormuz Strait mine threat boosted demand for its products. Thales SA signed a binding agreement to acquire the company in early July.

Submarine manufacturer TKMS AG & Co. KGaA, on the other hand, excelled by receiving large orders from Germany and Canada.

At a time when the stock prices of large military hardware groups continue to be sluggish, analysts are trying to determine the next direction of the defense sector. Barclays Bank analyst Afonso Osorio and others expressed optimistic expectations in a research report released on August 11 and began covering a number of large defense companies, but suggested adopting a more selective investment strategy. Osorio notes that he expects “as visibility, portfolio quality, and execution capabilities become more important to investors, individual stock differentiation will become more obvious.”

Meanwhile, Mildef is concentrating on increasing production capacity to meet growing demand and increasing market share in an industry that usually relies on long-term partnerships with local manufacturers. Ljungren said that mergers and acquisitions and strategic cooperation occupy an important position in the company's strategy, and the group has always been highly alert to overseas market opportunities.

“This' radar 'is on around the clock.” Ljunggren said.