London, April 6, 2026, 15:22 (BST)
BAE Systems landed a $180 million deal with Sweden on April 2 for its TRIDON Mk2 air-defense system, a chunk of an 8.7 billion crown package signaling that European governments continue to pour money into countering drones and aerial threats. Saab was named in the order as well.
European governments keep funneling funds into air-defense and anti-drone tech—tools to spot and jam unmanned aircraft—lessons learned after Ukraine. Sweden plans to bump military spending to 2.8% of GDP by 2026 and up to 3.5% by 2030, which feeds a demand surge. BAE had already flagged in February that this trend sent its order backlog—work booked but undelivered—to a record 83.6 billion pounds.
The TRIDON Mk2, a 40 mm anti-aircraft gun mounted on a truck, is built to take down drones, cruise missiles, and aircraft—and it can target threats on the ground as well. “Designed for today’s warfare,” according to BAE Systems Bofors president Lena Gillström. Nasdaq
BAE comes into the Sweden deal with a sturdier foundation than it had last year. In February, the company logged a 12% bump in full-year operating profit and projected 2026 sales would climb 7% to 9%, with operating profit up 9% to 11%. Chief Executive Charles Woodburn kept the tone bullish, pointing to increased military budgets as a tailwind for growth over the long haul.
Contract activity has been picking up. BAE and Lockheed Martin, according to a Pentagon announcement on March 25, are set to ramp up output of THAAD interceptor seekers—the missile’s key guidance components—by four times. Then, on April 2, the GCAP Agency awarded Edgewing a £686 million contract; that’s the tri-national group overseeing the next-gen fighter effort for Britain, Italy, and Japan.
Europe’s defense market remains fiercely contested. Saab pegged its cut of the April 2 order at 2.6 billion crowns. Leonardo, a heavyweight across the region, is tied up with BAE on GCAP and also handles support for Turkey’s Typhoon order.
But investors aren’t throwing money at every defense story these days. Reuters noted last week that drawn-out production timelines and bottlenecks mean fresh orders don’t necessarily show up quickly in profits. Valuations? Already stretched—LSEG data put the U.S. aerospace and defense index at roughly 32 times forward earnings. “A lot of conflict premium” is already baked in, DWS’s David Bianco pointed out. Bernstein’s Douglas Harned cautioned that people shouldn’t count on the current conflict to push estimates any higher.
For BAE, execution now takes center stage, not demand. Sweden’s orders are slated for delivery in 2027 and 2028. This year, the company sees sales climbing 7% to 9% as European governments keep pouring money into air-defense and fighter-jet projects—ranging from Sweden’s newest package to Turkey’s Typhoon support arrangement.
