Rheinmetall, Almonty Industries, AMD – These stocks have tailwinds

Rheinmetall – New joint venture

Amid a global rethink of security, the defense industry in Europe is experiencing an unprecedented upswing. A striking step in this development is the new joint venture between Leonardo and Rheinmetall, which will focus on the production of modern combat vehicles. This alliance promises technological excellence and aims to dominate the European market. Based in Rome and La Spezia, both partners hold equal proportions of the Company, underscoring their shared vision and confidence in the future demand for world-class defense technology.

The primary goal of Leonardo Rheinmetall Military Vehicles is to provide innovative military solutions for the Italian Army. Based on the Rheinmetall Panther KF51, the new main battle tank is intended to replace the aging Ariete tank. In addition to tank variants for the Armored Infantry Combat System program, a whole range of support vehicles is also on the agenda. This strategic partnership exploits the strengths of both companies, not only to conquer the Italian market but also international markets, thereby ushering in a new era in European defense technology.

In parallel with its European orientation, Rheinmetall is strengthening its commitment to the US market by participating in the US Army's S-MET program. Together with Textron Systems, American Rheinmetall Vehicles is developing unmanned transport vehicles that will optimize the equipment of troops in the future. These efforts reflect Rheinmetall's global strategy of securing a technological advantage through local partnerships. It is a solid approach that offers potential for economies of scale and long-term investment opportunities. The demand for defense equipment will not fade anytime soon. The share is currently trading at EUR 482.60.

Almonty Industries – Support from the Korean government

The Sangdong mine is on the verge of resuming production. A ceremony was held to celebrate this momentous occasion, attended by business representatives and politicians from South Korea. The Company plans not only to extract tungsten concentrate but also to produce tungsten oxide in order to reduce dependence on imports. This will make it the largest tungsten producer outside China. The support of the Korean government means that Almonty's approach is seen as respectful and sensitive. Its focus on sustainability and its commitment to social responsibility have contributed to this. The reopening of the Sangdong mine thus symbolizes a pivotal moment for the Korean economy and its ambitious goals in future technologies such as electromobility and semiconductor production.

The Sangdong mine in Korea, regarded as the largest tungsten mine outside of China, is making promising progress. Despite the rainy season, construction is progressing rapidly, and the completed technical review of the pilot plants has cleared the way for the installation of the processing facilities. The Company benefits from unique offtake agreements and the stable political situation in Korea. The mine is characterized by high yields, which are more than three times higher than those of the Panasqueira mine. In addition, a significant molybdenum deposit offers further growth potential. Planning is further along than expected, with the basic infrastructure nearly completed and confirmation of historical data pending, which will provide substantial added value.

In Portugal, the Company plans to increase production by 40% by expanding the Panasqueira mine to Level 4. These initiatives promote sustainable growth and strengthen the Company's position in the global market. US delegations have already been on site to get a picture of the situation. The geopolitical importance of tungsten is also underlined by its inclusion in the list of critical raw materials of the European Union and the US. As the raw material is used in more and more high-tech applications, demand is steadily increasing, whether it be from the automotive or defense industry. The share has risen by around 80% since the beginning of the year due to these prospects and is currently trading just below the year's high of CAD 0.95. If the Sangdong mine goes into operation, the share will likely have further growth potential.

AMD – Edge computing as a growth opportunity

The chip industry is currently experiencing an enormous boost from the rapid development of artificial intelligence, from which AMD is likely to benefit enormously. Given the bottlenecks at Nvidia, the analyst known as "The Asian Investor" anticipates rising demand for AMD's upcoming AI accelerator Instinct MI325X, which is expected to hit the market in 2025. The highly sought-after AI chips, expected to cost over USD 30,000, offer AMD the opportunity to significantly expand its market share. With a positive outlook, the analyst offers an optimistic assessment of AMD's performance compared to Nvidia.

While AMD is still lagging behind Nvidia in the AI data center market, the focus is increasingly on edge computing. Smartphones and laptops with integrated neural processing units (NPUs) are experiencing strong growth. Market research predicts that the market for AI-enabled PCs will grow by around 40% annually. With its innovative Ryzen AI processors, AMD has already achieved a strong position here. Nevertheless, it remains to be seen whether a "killer application" will bring the breakthrough with end users. Meanwhile, the competitive pressure from the likes of Intel, Qualcomm, and Nvidia should not be underestimated.

AMD is strengthening its market position through strategic alliances, such as the recently announced partnership with Intel to promote the x86 architecture. This step aims to further develop the compatibility and scalability of the architecture and promises new growth impulses. Nevertheless, Oppenheimer analyst Rick Schafer remains cautious about AMD's long-term profitability. Despite the potential due to the decline in the PC market, he views Nvidia and Intel as technically superior. Nevertheless, the stock still seems to have catch-up potential and is currently available for USD 157.55.

Stocks in the defense, tungsten production, and chip manufacturing for AI sectors are currently experiencing a significant tailwind. Rheinmetall is strengthening its market position through a joint venture with Leonardo, that aims to produce modern combat vehicles, and through innovative collaborations in the US. The Company is benefiting strongly from growing defense budgets. Almonty Industries is set to become the largest tungsten producer outside of China with the reopening of the Sangdong mine, which should guarantee sustainable growth. AMD sees great potential in the increasing demand for AI chips, with technological developments in edge computing and strategic partnerships that could expand its market share.