Shares in Germany's Rheinmetall have soared 57% this year, while BAE Systems is up 17% and France's Thales has gained 22%.

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),

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.