Saab's Stock Soars 700% Amid Ukraine War, But Is the Company's Growth Sustainable?

Saab AB's stock has risen approximately 700% since the start of the Ukraine war in 2022, driven by the company's defense business, which has benefited from increased demand for military equipment and services. The company's stock price has grown exponentially due to its involvement in the production of the Gripen fighter jet, which is used by several NATO countries, including Sweden, Hungary, and Malaysia. Saab's financial performance has been boosted by the rise in demand for defense equipment and services, as well as its successful bid for a Swedish military procurement program.

Saab AB's stock has experienced a remarkable surge, rising approximately 700% since the start of the Ukraine war in 2022. This substantial growth can be attributed to the company's robust defense business, which has benefited significantly from the increased demand for military equipment and services. The company's involvement in the production of the Gripen fighter jet, used by several NATO countries including Sweden, Hungary, and Malaysia, has been a key driver of this growth. Additionally, Saab's financial performance has been bolstered by successful bids for military procurement programs, such as the Swedish military procurement contract.

Bank of America (BofA) has highlighted the accelerating defense spending growth in the United States and Europe, which is likely to continue benefiting major defense contractors. NATO allies have agreed to increase defense equipment spending to 3.5% of GDP by 2035, up from the previous 1.5% to 2% range. This move is expected to significantly boost the defense sector [1].

Saab AB's recent earnings call for Q2 2025 underscored the company's strong performance. The company reported record sales growth and upgraded its 2025 sales guidance. This positive outlook is driven by the rising global defense budgets, which are fueling demand for Saab's combat systems [2]. The company's CEO, Micael Johansson, has emphasized the importance of domestic support for the European defense industry, highlighting the crucial role of companies like Saab in meeting increased defense demands.

Saab's recent successes include securing orders for its GlobalEye aircraft from the French defense procurement agency and the Swedish Defense Materiel Administration (FMV). These contracts further demonstrate the company's ability to capitalize on global defense spending trends [3, 4]. Moreover, Saab's strategic partnership with General Atomics to develop unmanned airborne early warning solutions underscores its commitment to innovation and staying ahead in the defense market [5].

The company's financial targets for 2023-2027, which include organic sales growth of around 18% and higher operating income growth than organic sales growth, reflect a strong outlook for future performance. Saab's capital markets day presentation further highlighted the company's well-positioned strategy for capturing future growth opportunities [6].

References:
[1] https://www.investing.com/news/stock-market-news/bofa-sees-defense-spending-continuing-to-surge-93CH-4152784
[2] https://stockanalysis.com/quote/otc/SAABF/
[3] https://www.prnewswire.com/news-releases/saab-receives-order-for-ground-based-air-defence-from-sweden-304416108.html
[4] https://www.prnewswire.com/news-releases/saab-intends-to-sell-planes-to-french-armed-forces-304395805.html
[5] https://www.prnewswire.com/news-releases/saab-and-general-atomics-develop-unmanned-airborne-early-warning-solution-304389217.html
[6] https://www.prnewswire.com/news-releases/saabs-capital-markets-day-2025-well-positioned-for-future-growth-304299692.html