Shares of Dassault Aviation, the French manufacturer behind the Rafale fighter jet, have seen a sharp 8% drop in the past five days, sparking concerns among investors. The stock, which had recently been trading at €325, plunged to an intraday low of €292, reflecting a significant loss in value over the short term.
This decline is largely attributed to escalating tensions between India and Pakistan, which have been linked to the use of Dassault’s Rafale jets. On May 7, India deployed Rafale jets in an operation against terrorist targets in Pakistani territory, which was followed by Pakistan’s claims of shooting down several Indian aircraft, including Rafales. This has fueled uncertainty surrounding the long-term prospects of Dassault’s involvement in the region.
Despite this short-term slump, Dassault’s financial position remains robust. The company reported annual revenues of €6.24 billion and a net profit of €924 million, underscoring its strong overall performance in the aerospace and defense sector. However, the current geopolitical instability has placed its future in some uncertainty, with analysts warning that the stock could fall further if it breaches the €291–€292 support level, potentially reaching €260.
Interestingly, while Dassault’s shares have taken a hit, shares of China’s Chengdu Aircraft Corporation (CAC), which manufactures the J-10 fighter jets used by Pakistan, surged by 20% during the same period. This contrast highlights the shifting dynamics of global defense markets amid the ongoing conflict.
As tensions continue to unfold, both the stock market and global defense sectors will be watching closely to gauge the long-term impact on Dassault Aviation’s standing in the industry.
