My New 2026 Series Begins — And Today’s Theme Is Huge

Today marks the start of a brand-new series inside McCall’s Market Insights — a multi-day look at the biggest, most investable megatrends I see shaping 2026 and beyond.

Each day this week, I’ll break down one theme that’s quietly gaining momentum under the surface of the market… trends most investors are completely missing.

My goal is simple: give you the early insights, the long-term narratives, and the specific areas of opportunity so you can position ahead of the crowd. And we’re kicking off the series with one of the most important — and overlooked — shifts happening right now: Europe’s historic rearmament.

For the last three decades, Europe enjoyed a peace dividend. Defense budgets were cut, militaries shrank, and taxpayers assumed the U.S. would always backstop the continent’s security. That era is over.

And for investors, a major long-term opportunity is just beginning.

European nations have underinvested in defense for nearly 30 years, ever since the fall of the Iron Curtain. But the past few years have forced a historic reset. Russia’s invasion of Ukraine, cyberattacks across the continent, and even unidentified drones flying over key European infrastructure have shattered the illusion of security. Europe now recognizes that relying on the U.S. alone is no longer an option.

The result: the biggest rearmament cycle in Europe since the Cold War.

Defense spending in Europe has been rising steadily for a decade, increasing 3.9% annually from 2014–2024, but that was just the warm-up. Today, 23 of the 32 NATO members already meet the 2% of GDP defense-spending threshold set back in 2014 — a milestone nobody would have believed possible even five years ago.

But last year’s NATO Summit took it to another level.

At the 2025 NATO Summit, member nations committed to investing 5% of GDP into defense by 2035. That is a staggering number — and it forces years of budget expansion that can’t be reversed with a single election.

In 2024 alone, 10 NATO countries increased their defense budgets by 20% or more. And countries with fiscal challenges like Spain, Italy, and France are expected to follow as the geopolitical pressure rises.

Meanwhile, the Baltics, Nordics, Poland, and Germany already have multi-year spending programs in motion, including new air defense systems, drone defenses, munitions stockpiles, and next-gen fighter investments.

This is not a one-year surge. It’s a decade-long rebuild of the entire European defense industrial base. And because you can’t build factories, missile systems, or naval fleets overnight, the spending will be sustained and predictable.

Despite all this momentum, European defense stocks still trade at a discount to their U.S. peers. That disconnect won’t last. U.S. defense names have already re-rated higher after years of strong orders and geopolitical demand — Europe is just beginning that same cycle.

Over the next 12–24 months, I expect:

This is exactly the kind of long-term, inevitable megatrend that sets up powerful multi-year returns for early investors.

One of my biggest winners over the last few years is Rheinmetall (RNMBY) – Germany’s largest defense company that has played a pivotal role in arming Ukraine in it’s war against Russia. I originally recommended the stock on May 3, 2023 and it was up as high as 705% in September.

I have a list of several stocks I feel are set to repeat what Rheinmetall did in the coming years. For more information on our investment services please check out more here…

Tomorrow, I’ll continue this series with another of my top investment themes for 2026. Stay tuned — these early trend spotlights are key to positioning ahead of the crowd.

Talk soon,
Matt McCall
Founder, NXT Wave Research