European aerospace and defence stocks are on fire this month—up nearly 15% as capital flows into the sector betting on rising geopolitical tensions and sustained military spending from NATO members. The Stoxx Europe Aerospace and Defence index tells the story: governments across the continent are under pressure to boost defence budgets, creating a tailwind for contractors. It's the classic defensive play when global uncertainty peaks. Investors watching defence spending cycles know this cycle can run for years once it starts rolling.