The Rolls-Royce share price dominated headlines this week as the aerospace engineer hit a new record price. On Tuesday (10 June), it surged to 912p per share, 4.6% higher than the previous day.
The shares are now up 56.3% this year – but they’re not alone in driving the FTSE 100 to new highs. Three shares have performed even better in 2025, with two more than doubling in value.
Could these stocks follow in the footsteps of Rolls and keep climbing — or is the rally tapped out?
BAE Systems
BAE Systems (LSE: BA.) has been riding the same tailwinds as Rolls, enjoying growth on increased defence spending, with the shares up over 62% in the past year. With defence budgets expanding across Europe and beyond, demand for BAE’s military tech isn’t slowing.
Its income credentials stand out too. While the current dividend yield is a modest 1.76%, BAE has raised its payout consistently for 19 years, averaging 10% annual growth. For long-term investors focused on reliability, this kind of track record is gold.
It’s also a textbook defensive stock. When economies wobble, government defence spending often doesn’t — and that’s a strong buffer. However, geopolitical risk cuts both ways. While war drives demand, the sudden peace we all want or policy shifts can derail expectations. Plus, valuations are starting to look rich.
Still, BAE remains a solid stock to consider for its sturdy mix of income, growth and stability in uncertain times.
Babcock International
It’s rare for a FTSE 100 stock to more than double in a year, but Babcock International (LSE: BAB) has done exactly that — up nearly 109% in 2025 alone. The engineering and defence services firm has been on a turnaround path since its restructuring, and investors seem to be betting on a long-term revival.
Its fundamentals look encouraging. A return on equity (ROE) of 44% is eye-catching, especially compared to others in the industry. And with a price-to-earnings growth (PEG) ratio of 0.05, it remains undervalued with a decent balance sheet — not perfect, but far from concerning.
However, the recent surge may be running on a lot of optimism. Margins remain thin and execution risk is real. If operational issues resurface, the gains could disappear again quickly – especially if defence spending drops off.
Fortunately, Babcock has secured a string of government contracts and is expanding its presence in nuclear and submarine maintenance. These highly specialised, sticky areas tend to generate steady revenue, giving the stock long-term growth potential that’s worth considering.
Fresnillo
Fresnillo (LSE: FRES) has been the standout performer of the FTSE 100 this year, surging 122%. As gold and silver prices climb, investors have poured into this Mexico-based precious metals miner.
Momentum aside, there’s a big red flag – its current price-to-earnings (P/E) ratio is a staggeringly high 92.6. That kind of valuation demands either spectacular earnings growth or continued commodity tailwinds. Without one or both, a correction may be inevitable.
That said, gold often shines brightest when markets turn fearful. If inflation lingers or central banks stay cautious, precious metals could remain in demand
Still, it’s hard to ignore how expensive the shares have become. The growth potential from here may be limited unless the gold bull run continues. Risk-tolerant investors might still see value, but after such a steep climb, I consider the stock too pricey for me right now.
