Rolls-Royce Stock Surges 500% in Two Years Amid Defense and Aerospace Turnaround

Rolls-Royce (RR) has delivered staggering returns for investors, with a $10,000 investment in July 2022 now worth over $60,000. The aerospace and defense giant's resurgence under CEO Tufan Erginbilgic has been fueled by operational restructuring, margin improvements, and debt reduction.

Defense spending tailwinds could propel further growth. The UK plans to increase defense expenditure to 2.6% of GDP by 2027, with NATO pushing for 5% over the next decade. Rolls-Royce stands to benefit significantly from its role in nuclear submarines and military propulsion systems.

Prime Minister Keir Starmer's endorsement of Rolls-Royce's small modular nuclear reactor (SMR) initiative adds another potential growth driver for the second half of 2025. The company's transformation from struggling industrial player to high-performing defense contractor mirrors the disruptive potential seen in cryptocurrency markets.