Smart Weapons Technology Market Report 2026

The smart weapons technology market size has grown strongly in recent years. It will grow from $21.37 billion in 2025 to $22.91 billion in 2026 at a compound annual growth rate (CAGR) of 7.2%. The growth in the historic period can be attributed to increasing adoption of guided munitions in modern armed forces, advancements in gps and laser targeting technologies, rising investment in defense modernization programs, integration of ai and data analytics in weapon systems, development of unmanned and loitering munitions for precision strikes.

The smart weapons technology market size is expected to see strong growth in the next few years. It will grow to $30.21 billion in 2030 at a compound annual growth rate (CAGR) of 7.2%. The growth in the forecast period can be attributed to growing demand for autonomous and semi-autonomous smart weapons, integration of cybersecurity measures in weapon systems, expansion of directed energy and advanced missile technologies, focus on network-centric warfare and real-time data connectivity, rising adoption of smart small arms and modular munitions for battlefield flexibility. Major trends in the forecast period include rapid integration of directed energy weapons, enhanced gps-denied targeting capabilities, modular and upgradeable smart weapon designs, growth of loitering munitions adoption, increasing focus on lifecycle support and predictive maintenance.

The increasing defense budgets are expected to drive the growth of the smart weapons technology market in the coming years. Defense budgets refer to the financial resources a government allocates to maintain and develop its armed forces and military operations. The rise in defense budgets is largely due to growing geopolitical tensions, as countries dedicate more funds to bolster military capabilities in response to regional conflicts, strategic rivalries, and national security threats. Smart weapons technology improves precision and operational efficiency, optimizing defense spending by reducing the need for extensive troop deployments and minimizing costs related to collateral damage. For instance, in November 2024, according to the Ministry of Defense, a UK government department, total defense expenditure increased by approximately $1.4 billion (£1.1 billion) compared to 2022-23. Consequently, the rising defense budgets are fueling the expansion of the smart weapons technology market.

Key players in the smart weapons technology market are concentrating on creating innovative solutions, such as autonomous systems, to enhance targeting precision and operational efficiency. Autonomous systems are technologies capable of functioning independently without human input, using sensors, AI, and machine learning to make decisions. In military contexts, they allow weapons and vehicles to autonomously perform tasks like navigation, targeting, and surveillance. For example, in September 2023, MARSS Group, a UK-based technology firm, introduced the Interceptor-SR, a portable autonomous system designed to counter drones. This advanced system integrates AI-driven autonomous tracking, thermal sensors, and kinetic neutralization capabilities, enabling it to independently detect and eliminate Class 1 drones. The Interceptor-SR is highly adaptable, supporting both mounted and dismounted deployment, making it an effective solution across various military operations. Its modular design ensures operational flexibility and efficiency in addressing aerial threats.

In November 2024, AeroVironment, Inc., a US-based defense contractor, acquired BlueHalo LLC for $4.1 billion. Through this acquisition, AeroVironment aims to develop a diversified defense technology company by incorporating BlueHalo’s expertise in uncrewed systems, loitering munitions, counter-UAS, space technologies, electronic warfare, and cyber capabilities, leveraging AI and autonomy to boost innovation, manufacturing, and customer support. BlueHalo LLC, a US-based advanced engineering manufacturer, provides smart weapons technologies.

Major companies operating in the smart weapons technology market are Raytheon Technologies Corporation, The Boeing Company, Lockheed Martin Corporation, Northrop Grumman Corporation, BAE Systems, L3Harris Technologies Inc., Textron Inc, Rheinmetall AG, Elbit Systems Ltd., Israel Aerospace Industries Ltd., MBDA, Diehl Stiftung & Co. KG, Saab AB, General Atomics, Aselsan A.S., Denel SOC Ltd., Thales Group, UVision Air, Rafael Advanced Defense Systems Ltd., Bharat Dynamics Limited.

North America was the largest region in the smart weapons technology market in 2025. The regions covered in the smart weapons technology market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

Tariffs on electronic components, aerospace-grade materials, and advanced guidance systems are increasing production costs and causing supply chain delays in the smart weapons technology market. Key segments such as guided missiles, UCAVs, and directed energy weapons, particularly in manufacturing-dependent regions like Asia-Pacific and Europe, are most affected. However, tariffs are also encouraging domestic sourcing, driving localized manufacturing, and fostering innovation in cost-effective substitutes and resilient supply networks.

The smart weapons technology market research report is one of a series of new reports that provides smart weapons technology market statistics, including the smart weapons technology industry global market size, regional shares, competitors with the smart weapons technology market share, detailed smart weapons technology market segments, market trends, and opportunities, and any further data you may need to thrive in the smart weapons technology industry. This smart weapons technology market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

Smart weapons technology refers to sophisticated weapon systems that are designed to accurately target and engage threats through integrated guidance, control, and targeting systems. These weapons typically use GPS, laser, infrared, or radar technologies to enhance precision and minimize collateral damage. They are built for high performance in modern warfare, allowing for real-time data processing and autonomous or semi-autonomous targeting.

The primary types of products in smart weapons technology include missiles, munitions, guided projectiles, guided rockets, guided firearms, and directed energy weapons. Missiles are precision-guided weapons that incorporate smart technologies and propulsion systems, enabling them to hit targets accurately from land, sea, or air over long distances. The technologies used in these weapons include laser, infrared, radar, GPS, and other advanced systems. These weapons can be launched from various platforms, such as air, land, and sea-based systems.

The countries covered in the smart weapons technology market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The smart weapons technology market consists of revenues earned by entities by providing services such as integration of smart weapon systems with defense platforms, maintenance and repair of advanced munitions, simulation-based training for personnel, modernization and upgradation of existing weapon systems, data analytics and AI-based targeting solutions, cybersecurity support against electronic threats, and logistics and inventory management for mission readiness. The market value includes the value of related goods sold by the service provider or included within the service offering. The smart weapons technology market also includes sales of smart missiles, smart bombs, guided mortar rounds, smart artillery shells, directed energy weapons, smart small arms, loitering munitions, and unmanned combat aerial vehicles (UCAVs). Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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