Defense Industry – The Free World's Security or Merchants of Death

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HS Visio writes about the collaboration between Patria and Nest AI (no paywall). Nokia is also mentioned.

Patria acquired the Nordic Drones company in 2024 and has since expanded its own drone platform development. Currently, it showcases three different types of drones on its website, which are suitable for imaging and reconnaissance, but also for striking with explosive payloads.

In the new collaboration, Patria is responsible for the mass production of the drones, while Nest AI provides the software and AI, and integrates them into the command and control system.

In its first financial year in 2025, Nest AI already generated a turnover of 3.3 million euros and an operating profit of nearly 0.8 million euros. The company was only founded in May 2025.

According to Sarlin, in addition to the Finnish Defence Forces, customers include several other European armed forces, particularly near Europe’s eastern border.

The company now has 160 employees, and according to Sarlin, the goal is to grow to 300 employees by the end of the year.

The network equipment company Nokia and the state-owned investment company Tesi invested a total of one hundred million euros in Nest AI in November 2025. At the same time, Nokia and Nest AI announced a strategic partnership to develop AI-based defense solutions.

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Another major deal for Patria.

Lithuania intends to purchase 936 armored vehicles from Patria.

According to the news agency Reuters, the announcement was made by the country’s president, Gitanas Nausėda.

300 vehicles are scheduled to be delivered by 2030, writes the Lithuanian national broadcaster LRT.

Patria announced today, Wednesday, that the company is ready for technology transfer to Lithuania in the CAVS [Common Armoured Vehicle Systems] vehicle project.

President: Lithuania to buy nearly a thousand Patria vehicles | News in brief | Yle

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The analysis at the moment seems to be that we are moving from hype and a phenomenon toward a serious investment asset class.

I have reduced my holdings in the defense sector to about half of the original and concentrated my positions in Europe. I see an upward trend, but expectations were initially baked in a bit too heavily. It will still take a moment for those to fully materialize.

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:canada: :sweden:
News from Canada:

This now becomes the clearest sign yet of Canada’s efforts to diversify defence spending away from the United States.

The southern neighbor’s L3Harris (AERIS X) and Boeing (E-7 Wedgetail) would have wanted to compete for the deal, but in the words of the CBC reporter: “there’s been no competition, so this is a sole source contract going to a European company, which is a major departure for the Canadian government”.

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The article below discusses European defense sector stocks and, among other things, how the most aggressive rallies seem to have leveled off for the time being.

Last year, share prices benefited from increasing defense spending, but now, according to the article, investors are looking more closely at results, cash flow, and valuations.

High growth expectations are already baked into many stocks. The article suggests that future winners could particularly be diversified companies with versatile expertise in electronics and drones.

Key Points

  • Defense stocks in Europe have struggled in 2026 against the broader index.
  • Analysts see 2026 as a period of consolidation in which investors have become more selective on winners.
  • Lofty expectations are already baked in to companies’ share prices.

https://www.cnbc.com/2026/05/30/defense-stocks-consolidation-rheinmetall-saab-renk.html

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Lockheed Martin and L3Harris have successfully tested a new “propulsion system” for the PrSM missile, where a rocket booster hands over the workload to a ramjet engine.

The goal is a range of over 1,000 kilometers from existing HIMARS and M270 launchers. So-called flight tests will begin in the fall.

Scott Alexander, president of Missile Propulsion at L3Harris, said the propulsion system “strikes a balance between capability and affordability by meeting the Army’s requirements for speed, range and lethality.”

https://www.investing.com/news/assorted/lockheed-martin-completes-key-propulsion-test-for-longrange-missile-432SI-4724628

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News from AI pilot company Merlin: The autonomization of the C-130J transport aircraft is progressing with USSOCOM. The stock is currently +39% in the pre-market. (Kurssien ja niiden muutosten kyselyt, kauhistelut ja hehkuttelut (Osa 4) - #5622 käyttäjältä Raphael)

BOSTON, June 04, 2026 (GLOBE NEWSWIRE) – Merlin, Inc. (NASDAQ: MRLN), an aerospace and defense technology company building the operating system of record for autonomous flight, today announced the successful completion of the Critical Design Review (CDR) for its C-130J autonomy program with the U.S. Special Operations Command (USSOCOM). Completion of the CDR is a milestone in the program’s maturation, validating the system’s design readiness and advancing Merlin from design development into aircraft integration activities.

”As we move into integration, ground testing, and eventually flight demonstrations, we’re focused on proving autonomy from takeoff to touchdown is one of the most effective ways to improve operations and safety for US warfighters.”

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HS Visio had a story this week (for subscribers) about the defense industry boom on the Helsinki Stock Exchange. It was a bit of a superficial overview.

Mentioned listed companies: Bittium, Nokia, Componenta, Aspocomp, and Incap. “With a wider lens, the following can also be included”: Wärtsilä, Vaisala, Scanfil, Kreate Group, GRK Infra, and even YIT.

In addition, companies in the process of listing or planning to do so were mentioned: Savox Communications, Reaktor, Sensofusion, and Varjo Technologies.

A few quotes:

The only company that can truly be classified as a defense company is Bittium, as the majority of its revenue and earnings come from the defense sector and it has a clear product offering aimed at the defense industry.

Savox Communications, which is currently attempting to list, is also a true defense industry company, as the defense sector accounted for slightly more than half of its revenue last year.

“Companies benefiting from the defense industry are interesting because they are among the few companies in Finland capable of showing growth,” assesses Juha Varis, portfolio manager of S-Bank’s Fenno fund.

Bittium’s wild rise is attracting new IPOs to the stock exchange that are getting a boost from the defense industry, he says.

According to Inderes analyst Juha Kinnunen, returns have now weakened at least temporarily, as the enthusiasm was occasionally even excessive. According to him, the outlook in Europe remains excellent.

Kinnunen hopes that the weakening of the biggest boom would mean that investors focus more on company-specific factors rather than blindly buying the entire industry and everything related to it.

“In the medium term, the wheat will be separated from the chaff,” Kinnunen tells HS Visio.

One of these other defense companies on the exchange is Nokia. The defense industry is currently one of its strategic focus areas, but its share of revenue is still small.

Other companies benefiting from the defense industry include at least the foundry company Componenta, the circuit board manufacturer Aspocomp, and the electronics component manufacturer Incap.

With a wider lens, Wärtsilä and Vaisala can also be included with their dual-use products.

Scanfil, on the other hand, manufactures components and electronics for defense systems.

Infrastructure construction companies Kreate Group, GRK Infra, and even YIT can also claim to be part of the defense industry as they build and repair bridges and railways that are part of national defense capabilities.

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Satellite company Iceye has raised more funding: “Finland’s third decacorn is born.” Among listed companies, Nokia is mentioned once again.

Press releases from Iceye and Tesi (Finnish Industry Investment) and the news from Yle:

Participants in the round:

Tesi participated in the round along with Finnish entities Solidium, Ilmarinen, Varma, Nokia, and Lifeline Ventures, as well as the Qatar Investment Authority (QIA) and the American firm TCV. Following the completion of the funding round, Tesi owns approximately 7% of ICEYE’s shares, the Finnish state—through Tesi and Solidium—owns approximately 12%, and Finnish institutional investors own approximately 17% in total.

Comment from Nokia’s CEO:

Nokia joins the funding round as a new strategic investor. Justin Hotard, President and CEO of Nokia, said: “Modern defense increasingly depends on combining trusted connectivity with real-time visibility. Nokia and ICEYE bring complementary strengths that can help advance Europe’s defense, resilience and technological sovereignty. This combination will become increasingly important as governments and industries look to build more secure, aware and adaptable critical systems.”

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