Saab's Naval Powerplay and Global Defense Dominance: A Buy in Turbulent Times?

The world is on edge, and Saab AB (SAAB.ST) is cashing in. Let's talk about a company that's turning geopolitical tension into profit—starting with its recent deal to supply Sweden with 10 next-gen combat boats. These aren't just any boats; they're the CB90 Next Generation, engineered to dominate coastal waters and signal Sweden's seriousness about Baltic Sea defense.

The Combat Boat Contract: A Watershed Moment for Sweden's Navy

Saab's SEK 400 million ($37.7 million) contract to build 10 CB90 Next Gen boats is a microcosm of its strategic brilliance. These vessels, capable of 40+ knots and carrying 21 troops or equipment, aren't just speedboats—they're multirole war machines. With advanced sensors, remote weapon systems, and CBRN protection, they're designed for everything from amphibious assaults to countering surface threats. Crucially, they're part of Sweden's $15 billion naval modernization push, a response to Russia's aggressive posturing in the Baltic.

But here's the kicker: Sweden's navy already has 165 CB90s, and this order isn't an isolated play. It's a recurring contract model—Saab's bread and butter. These boats will be built at its Docksta shipyard, ensuring steady revenue streams and skilled workforce retention. For investors, that's music to the ears: recurring contracts = predictable cash flow.

A Proven Global Playbook: Saab's International Dominance

Now, let's zoom out. Saab isn't just a Swedish success story—it's a global defense juggernaut. In 2023–2024, it booked SEK 96.8 billion ($10.5 billion) in orders, with a backlog swelling to SEK 187 billion ($20.4 billion)—a 22% year-on-year jump. This isn't luck; it's strategic execution.

Take Poland's SEK 12.9 billion ($1.4 billion) deal for Carl-Gustaf M4 recoilless rifles. These aren't just guns; they're war-winning tools, proven in Ukraine. Then there's India, where Saab is building its first overseas M4 factory—a $700 million investment that ties it to Asia's largest defense market. Meanwhile, Hungary's Gripen E/F fighter orders and the UAE's GlobalEye radar systems underscore Saab's NATO-friendly tech, a critical edge in today's alliances.

Saab's stock has surged 65% since early 2023, reflecting soaring demand for its systems.

Synergies: Naval Might Meets Air Defense

Here's where Saab's genius shines: synergy between its product lines. The CB90 Next Gen isn't just a boat—it's a node in a networked defense ecosystem. Pair it with the RBS 70 NG, Saab's air defense system, and you've got a layered defense that can stop drones, missiles, and small craft in their tracks. This isn't just about selling widgets; it's about turnkey solutions for nations in survival mode.

The Philippines, for instance, just bought Saab's RBS-15 coastal missiles. Add that to their CB90s, and suddenly you've got a regional deterrent. Saab's ability to package these systems as a “defense suite” is why governments are flocking to its doorstep.

Geopolitical Tailwinds: The Fuel in Saab's Tank

The world is in a defense spending boom, and Saab is at the pump. The Ukraine war, China's Pacific ambitions, and Russia's Baltic threats mean $2.3 trillion will be spent on defense globally by 2027—up 15% from pre-2022 levels. Saab isn't just riding this wave; it's shaping it.

Consider its AI investments: a SEK 75 million ($8.1 million) stake in German firm Helsing GmbH gives it cutting-edge AI for autonomous systems. Pair that with its BlueBear acquisition (swarm tech for drones/boats), and you've got a future-proof arsenal. This isn't just R&D—it's moats against competitors like Boeing and Lockheed Martin.

The Bottom Line: Buy Saab for Defense—and Growth

Saab's order backlog is a fortress: SEK 187 billion ($20.4 billion) gives it visibility through 2030+. Throw in its 17% R&D spend (vs. 8% for peers) and you've got a company primed to dominate next-gen tech like AI-driven drones and swarm warfare.

For investors, the math is simple: geopolitical risk = Saab's upside. Its stock is up 65% in two years, but with a backlog growing at 20% annually, there's more room to run.

Action Item: Buy SAAB.ST for your portfolio. It's a defensive equity with growth legs, and in a world where “security” is the new buzzword, Saab's playbook is bulletproof.

Backlog surges 22% in 2024 alone, underpinning years of revenue visibility.

The next time you hear about a Baltic Sea drill or a new fighter deal, remember: Saab is already cashing the check.