The STOXX Europe Total Market Aerospace & Defense index has gained almost 15% this year.The conservative CDU grouping won the biggest share of the vote, meaning leader Friedrich Merz is set to lead the next government.

With the growing need for improved infrastructures, rapid technological advances, and growing spending, the defense sector is well-poised for significant expansion. Amid this backdrop, it could be ideal to invest in top defense stocks TransDigm Group (TDG),

European officials talked of increasing defense spending at the Munich Security Conference. Saab and Hensoldt stocks stand to benefit.

Shares in London-listed BAE Systems soared 7% on Monday. Germany's Rheinmetall jumped 8%, while Italian and French defense firms also got boosts.

Europe will likely have to spend hundreds of billions to prepare to defend itself without U.S. help, and will have to find ways to do that without spooking bond investors.