Rheinmetall's F-35 Bet and Autonomous Vehicle Push Put a Floor Under the Stock — But the Cash-Flow Debate Rages On

Rheinmetall's shares jump 10.7% on US Army autonomous vehicle deal and F-35 production start, but negative cash flow sparks investor debate.

The weekend brought another tranche of transatlantic contract news for Rheinmetall, and shareholders responded by driving the Düsseldorf-based defence group's shares to their strongest weekly showing in months. The stock closed Friday at €1,145.00, capping a 10.74% advance that has reignited a fierce argument among investors: is this the start of a genuine turnaround, or merely a pause within a deeper correction?

At the heart of the latest optimism sits a fresh award from the US Army to American Rheinmetall under the "Project Sustainment" programme. The 18-month contract covers the development of autonomous hybrid ground vehicles designed to resupply company-sized units of 150 to 200 soldiers. The platform builds on the plug-in hybrid Harbinger chassis, pairing it with autonomy software from Forterra and voice-control technology from Primordial Labs. Prototypes are expected within a year, with field trials potentially beginning in late 2026. Jim Schirmer, American Rheinmetall's vice president of sales and marketing, framed the deal as an expansion of the company's growing autonomous-systems portfolio.

The announcement adds to a steady drumbeat of recent wins, including further US agreements, the British RCH155 programme, and a frigate modernisation contract. For investors, the clustering of orders across two continents is evidence that Rheinmetall's diversification strategy is paying dividends well beyond its European home base.

Adding further ballast is the formal start of production in Weeze, North Rhine-Westphalia, where Rheinmetall has spent roughly €200 million building a manufacturing line for fuselage sections of the F-35 stealth fighter. The facility is designed to produce 30 sections annually, with the first delivery to the United States slated for autumn. A framework agreement guarantees offtake of 400 sections over a 17-to-20-year horizon. The site currently employs 200 people, a figure expected to more than double to over 400 by 2026. Germany's own order of 35 F-35 jets lends the programme additional political weight.

Yet for all the contract momentum, a nagging concern refuses to fade. Operating cash flow remains firmly negative while capital expenditure on capacity expansion — whether in Weeze or through Project Sustainment — continues to climb. The debate playing out across investor forums captures the tension neatly. One camp argues the heavy investment is a necessary prerequisite for working through the order backlog and cementing market leadership. The other warns of a precarious balancing act: a demanding valuation sitting atop deeply negative cash generation is, in their view, a combustible mix.

A related point of contention is Rheinmetall's unusually high degree of vertical integration. The company manufactures many components in-house rather than sourcing from low-cost jurisdictions. Supporters see this as both a technological and a security advantage — the strict requirements of defence procurement are difficult to satisfy through simple off-the-shelf purchasing — and argue it secures pricing power through control of the value chain. Skeptics remain unconvinced, waiting for the operating data to show whether the capacity build-out is actually compressing margins.

The chart, meanwhile, tells a story of partial recovery. The stock has climbed 26.87% from its 52-week low of €902.50 set in late June, and recently crossed above its 50-day moving average — a positive short-term signal. But the distance to the 200-day average of €1,473.94 remains a yawning 22.32%, underscoring how far the shares still sit from the record high reached in October. With annualised volatility hovering near 70%, the equity remains a wild ride in either direction.

Traders are split on strategy: some are taking profits at current levels, while others are waiting for entries below €1,000. The prevailing sentiment, however, leans constructive. The coming weeks will test whether the order flow translates into a visible improvement in capital flows — a metric that may ultimately matter more for the share price than any single contract announcement from Washington or London.