Rheinmetall's War Profits: A Moral Minefield or Smart Investment?

The German defense giant Rheinmetall has become the unlikely center of a fiery political debate, as Left Party leader Jan van Aken condemns its soaring profits as unethical “war windfalls.” The party’s symbolic two-shareholding, bought for €180 in 2017 and now worth €3,200, has turned into a high-stakes cudgel against arms profiteering. But as Rheinmetall’s stock soars amid global defense spending booms, investors must ask: Is this company a moral hazard—or a can’t-miss growth play?

The Left’s Ethical Siege
Van Aken’s critique hinges on the grotesque irony of profiting from human suffering. “I find it disgusting that people make millions from the war and suffering of others,” he declared in 2025, referencing Rheinmetall’s 1,000% share price surge since 2022. The Left Party has used its minimal stake to demand a windfall tax on arms firms, arguing that wartime profits should fund social needs instead of shareholder pockets. Yet van Aken’s stance faces internal party criticism, as The Left has avoided outright opposing arms exports to Ukraine or condemning Israel’s Gaza actions—a contradiction that weakens its moral high ground.

The Financial Case for Rheinmetall

The numbers tell a compelling story for investors. Rheinmetall’s sales are projected to grow by up to 40% in 2024 alone, fueled by Germany’s €500 billion infrastructure-defense plan and Merz’s push to exempt military spending from debt brakes. The company’s factories in Europe are expanding to meet demand for Ukraine’s war machines and NATO’s modernization. Even survival threats—such as assassination attempts on CEO Axel Lehmann—haven’t dented investor confidence.

Political Risks Looming
The Left’s windfall tax proposal isn’t just rhetoric. If implemented, it could slice Rheinmetall’s margins by double digits. But with the far-right AfD now Germany’s largest opposition party, and Merz’s hawkish policies gaining traction, the political climate favors arms manufacturers. Still, investors must monitor two key risks:
1. Export Restrictions: A potential EU-wide ban on arms exports to Ukraine could dent orders.
2. Economic Headwinds: Rising interest rates might crimp defense budgets, despite Merz’s plans.

The Left’s Strategic Gamble
By retaining its two shares, The Left aims to amplify its voice in shareholder meetings—a clever use of leverage. Yet this tactic highlights the party’s pragmatic limits. While it rails against “war profits,” it avoids outright opposing the very arms shipments fueling those profits. This ambiguity leaves room for Rheinmetall to portray itself as a jobs-creating, geopolitically vital firm—a narrative that resonates with centrist voters.

Conclusion: A Volatile but Profitable Play?
Rheinmetall’s stock surge underscores a stark truth: in an era of geopolitical instability, defense stocks are cash cows. With a projected 40% sales jump this year and Merz’s policies shielding it from fiscal constraints, the company’s growth trajectory is undeniable. However, van Aken’s campaign underscores a critical risk: rising public discomfort with “war profiteering” could fuel regulatory backlash.

Investors should weigh the math: a stock that’s risen 10x since 2022 is no sure bet, but Rheinmetall’s dominance in Europe’s defense ecosystem gives it structural advantages. For now, the calculus leans bullish—provided you’re comfortable betting on a world where profit and peace remain uneasy bedfellows.

As The Left’s shares sit, a symbol of dissent, the real power lies with the markets—and the politicians pulling their strings.