In a bid to draw new investors into the booming world of UK defence stocks, trading platform XTB has relaunched its much-anticipated promotion: a free share in Rolls-Royce Holdings for every new UK client who opens and funds an investment account. The offer, which runs until February 28, 2026, comes at a time when Rolls-Royce shares have delivered eye-popping returns and the entire defence sector is basking in the glow of unprecedented investor enthusiasm.
According to Good Money Guide, the mechanics of the promotion are straightforward but time-sensitive. Prospective investors must register for a new XTB account between January 26 and February 28, 2026, accept the “Free Stock” terms during sign-up, complete standard identification checks, and make their first deposit within seven days. Within three business days of deposit confirmation, XTB credits one Rolls-Royce share—currently worth about £13—directly to the user’s portfolio. An email confirmation follows, making the process as seamless as possible for first-time investors.
But what’s behind the timing of this campaign, and why Rolls-Royce? The answer lies in the remarkable performance of the company’s shares and the broader context of the UK defence industry. As reported by The Motley Fool, Rolls-Royce’s share price has soared 116% in the past year and a staggering 1,070% over five years—making it the single best performer on the entire FTSE 100 index. That’s not just impressive; it’s nearly unprecedented in the blue-chip world.
Rolls-Royce, though often associated with luxury cars in the public imagination, is a multifaceted giant. The company’s main business is in aerospace, where it manufactures engines for commercial and military aircraft. But there’s more: its Power Systems division is riding the wave of artificial intelligence, supplying data centres with high-tech solutions, and the company is betting big on the future of small modular nuclear reactors—a sector many analysts believe could transform global energy markets in the coming decades.
Of course, Rolls-Royce isn’t the only UK defence stock making headlines. BAE Systems and Babcock International, two of its closest sector peers, have also posted dramatic gains. BAE’s share price is up 65% over the last year and 322% over five years, while Babcock has surged 118% in twelve months and 411% in five years. Across the FTSE 250, smaller players like Chemring, Goodwin, and QinetiQ are also outperforming, reflecting a sector-wide surge driven by global events.
Why the sudden investor stampede? The answer, as The Motley Fool points out, is a mix of rising geopolitical tensions and a rush to increase defence spending across Europe and beyond. The ongoing conflict between Russia and Ukraine, simmering tensions between the US and Iran, and concerns over China’s ambitions have all contributed to a sense of urgency among policymakers. Germany, for instance, is set to inject €500 billion into its military, and other European countries are being pressured to follow suit. In the UK, there’s talk of a £28 billion “defence black hole”—a funding gap that will likely drive even more investment into the sector.
For investors, the numbers are hard to ignore. BAE Systems recently reported a 12% rise in underlying operating profit to £3.32 billion for the full year ending February 18, 2026, beating analyst forecasts. The company’s order backlog reached a record £83.6 billion, and net debt fell by 22% to £3.84 billion. Babcock, meanwhile, posted a 19% increase in underlying operating profit to £201 million for the first half of its fiscal year, with its contract backlog climbing to £9.9 billion. These are not just incremental improvements—they are the kind of figures that make investors sit up and pay attention.
Yet, with such dizzying gains, some experts are urging caution. Valuations are now stretched, and expectations are sky-high. For instance, BAE Systems trades at a price-to-earnings (P/E) ratio of 28.5, while Babcock isn’t far behind at 27.9. Rolls-Royce, the sector’s star, commands a staggering trailing P/E of 65. As The Motley Fool notes, “the air is getting thin at these valuations.” Even a small earnings miss could send shares tumbling, and broker consensus forecasts for the next twelve months are surprisingly modest. For Rolls-Royce, the median analyst target is 1,333p—a mere 2% above current prices. BAE Systems and Babcock are expected to rise by just 5.35% and 11%, respectively.
That hasn’t stopped retail investors from piling in, however, and XTB’s free share promotion is a clear sign of the times. The company, which offers commission-free trading on shares and ETFs up to €100,000 turnover per month (with a 0.5% FX conversion fee on non-GBP trades), is aiming to attract a new generation of clients. As with all investments, there are caveats: the promotion is only open to new UK clients, and a deposit is required to qualify. Stocks and ETFs are commission-free only up to a certain threshold, after which a 0.2% fee (minimum £10) applies. And, crucially, all investments carry risk—share prices can fall as well as rise, and the value of that free Rolls-Royce share could fluctuate after it lands in your portfolio.
Richard Berry, founder of Good Money Guide and a veteran broker, underscores the importance of due diligence. With over two decades in the industry and recognition from publications like The Sunday Times and The Financial Times, Berry has seen his share of market cycles. He emphasizes that while promotions like XTB’s can be a great way to start investing, “your capital is at risk” remains a fundamental truth. Understanding the terms, the risks, and the broader market context is essential for anyone looking to take advantage of these offers.
For those who do their homework, the current climate offers both opportunity and peril. The UK defence sector is riding an extraordinary wave of demand, but valuations suggest the easy money may have already been made. As one analyst put it, “It would be brave to bet against defence stocks today. But after such a blistering run, valuations look stretched.”
For now, XTB’s free Rolls-Royce share promotion is a timely enticement, giving new investors a direct stake in one of Britain’s most dynamic—and closely watched—companies. Whether this marks the start of a new growth story or the crest of a wave remains to be seen, but one thing is clear: the defence sector, and Rolls-Royce in particular, are firmly in the spotlight.