BRUSSELS, 8 July 2025 — A sharp uptick in U.S. arms sales to European allies is driving significant gains across the American defense sector, as billions of dollars in new procurement contracts highlight Europe’s intensifying rearmament push. Over $3 billion in U.S. foreign military sales have been approved for Europe in just the past two months, reinforcing NATO interoperability and fueling record activity in transatlantic defense supply chains.
The U.S. State Department’s recent approvals, spanning advanced air-to-air missiles, precision-guided munitions, anti-tank systems, and air defense platforms, have sent shares of major American defense firms climbing steadily. Analysts attribute this surge in demand to both geopolitical urgency in the wake of the conflict in Ukraine and a structural rearmament trend reshaping European security policy. This trend is a key focus in our European Defense coverage, which tracks evolving military strategies across the continent.
European Orders Surge Amid Growing Regional Tensions
Poland has emerged as a key buyer, securing a $1.33 billion proposed deal for AIM-120D Advanced Medium Range Air-to-Air Missiles (AMRAAMs) and an additional $180 million order for GBU-39/B Small Diameter Bombs (SDBs). These systems are designed to equip Warsaw’s growing fleet of F-35 fighter jets and bolster munitions stockpiles as the country positions itself at the forefront of NATO’s eastern flank. Poland’s increased defense spending, including a significant €662 million investment in 155mm ammunition production, underscores its commitment to strengthening its military capabilities.
Meanwhile, Norway has requested a $370.9 million package for AIM-9X Block II Sidewinder missiles, enhancing the country’s air intercept capabilities. Türkiye is also deepening its missile inventory with two approved contracts: $225 million for AIM-120C-8 missiles and $79.1 million for AIM-9X Block II variants.
The Netherlands and Estonia are investing heavily in ground-based strike capacity. The Dutch Defense Ministry’s $215 million request for Joint Air-to-Ground Missiles (JAGM) follows its expanded participation in NATO’s integrated air defense system. Estonia’s $296 million procurement of Javelin anti-tank missiles—one of the largest such US-EU deals to date—underscores regional concerns about armor-heavy conventional threats, reflecting the broader global conflicts that shape defense procurement.
In southern Europe, Romania has pursued a $280 million extension of its Patriot air defense system, while Italy has requested $211 million worth of additional AIM-120D missiles to arm its Eurofighter Typhoon and F-35 fleets. Smaller but symbolically important transactions include Bosnia and Herzegovina’s $100 million deal for AW-119Kx light helicopters to support internal security, training, and border patrol efforts.
US Defense Sector Rides Wave of European Demand
The sheer volume and accelerated pace of recent foreign military sales have had a palpable impact on U.S. defense equities. Companies such as Raytheon, Lockheed Martin, and RTX Corporation—manufacturers of the AIM-120 and Patriot systems—have seen strong upward pressure on share prices throughout the first half of 2025. NASDAQ reports from early July 2025 indicate RTX’s Raytheon unit is set to see a sales boost with major defense contracts, including a $1.10 billion contract for AIM-9X Lot 25 missiles. The rising order book across Europe reinforces robust long-term revenue forecasts amid an already high-growth global defense environment.
According to analysts cited by Defense News and Trustnet on July 8, 2025, European demand is driving a “structural boom” in US production capacity, with major firms investing in expanded manufacturing lines and high-throughput missile assembly infrastructure. Defence ETFs, notably, were the most-bought thematic investment in Europe during the first half of 2025, attracting $7.87 billion in net inflows, signaling a shift from tactical trade to a structural portfolio allocation.
NATO’s renewed emphasis on munitions stockpile readiness and air superiority capabilities is pushing several member states to fast-track procurement cycles. These trends are consistently documented across The Politico’s coverage of European Defense and EU Economy, where rising military spending is increasingly seen as a political and industrial driver.
Interoperability Remains a Strategic Priority
The recent contracts emphasize not only weapons quantity but also critical interoperability with U.S. and NATO systems. Most recipient nations are integrating these platforms into existing U.S.-designed fighter aircraft, particularly the F-16 and F-35, or into NATO-compatible air defense networks.
As outlined in recent EU Politics reports, this standardization is critical to the alliance’s evolving force posture, particularly in the context of NATO’s new regional defense plans approved at the Vilnius (2023) and Washington (2024) summits. These plans represent a significant shift from “assurance” to “deterrence by denial,” requiring forces that can prevent any encroachment on NATO territory from the outset. Further details on NATO’s defense expenditures and commitments can be found on NATO’s official website.
Defense Orders Reflect Long-Term European Rearmament
The post-Ukraine security landscape has dramatically shifted European defense doctrine. A decade of underinvestment is being replaced by long-term military modernization programs, increasingly reliant on transatlantic suppliers. Countries such as Poland, Finland, and the Baltic States are leading this transformation, while Germany and France are also expanding procurement pipelines. Germany, for instance, has embarked on a significant defense shift as part of this broader trend, and France recently updated its military budget for 2025 to reflect increased commitments to NATO.
This rearmament wave is not limited to NATO members. U.S. defense exports to Sweden and Finland—both of which have recently joined or are finalizing their NATO integration—are expected to rise sharply in the coming months.
While the European Defence Fund (EDF) and bilateral frameworks under PESCO (Permanent Structured Cooperation) aim to support joint procurement and defense industrial integration, U.S. suppliers remain dominant in advanced missile and airpower categories. The EU has also approved a €150 billion rearmament fund (Security Action For Europe – SAFE) aimed at enhancing support for Ukraine and boosting the European defense sector.
Outlook: Sustained Momentum Through 2026 and Beyond
With U.S. defense firms reporting full order books and rising backlogs, the current wave of European procurement is expected to extend into 2026 and beyond. Industry experts suggest the bulk of missile deliveries tied to these recent approvals will occur between 2025 and 2028, depending on production capacity and legislative approvals. Reports from Euractiv on July 7, 2025, indicate that companies like Rheinmetall are advocating for more bundled, Europe-wide military orders to improve pricing and drive efficiency in production.
As global defense markets grow increasingly multipolar and threat-driven, Europe’s continued dependency on U.S. military systems raises strategic questions about supply security, cost-sharing, and sovereign capability—issues that continue to feature prominently in EU defense policy debates. This ongoing discussion also includes the role of joint ammunition procurement within the EU to ensure sufficient stockpiles and reduce reliance on external suppliers. For an opinion on this, see our Editors’ Opinion section.