Guided Weapon System Market Report 2025

The guided weapon system market size has grown strongly in recent years. It will grow from $46.38 billion in 2024 to $49.97 billion in 2025 at a compound annual growth rate (CAGR) of 7.7%. The growth during the historic period can be attributed to rising demand from emerging economies, increasing terrorism threats, improved range and payload capabilities, government initiatives promoting indigenization, and a rise in maritime security operations.

The guided weapon system market size is expected to see strong growth in the next few years. It will grow to $66.43 billion in 2029 at a compound annual growth rate (CAGR) of 7.4%. The growth projected for the forecast period can be attributed to rising global defense budgets, escalating geopolitical tensions, increased demand for precision and accuracy, growing use of UAVs and drones, and heightened investment in research and development. Major trends during this period include advancements in AI and machine learning, integration of network-centric warfare systems, demand for cost-effective weapon systems, international defense collaborations and partnerships, and a focus on quick-response capabilities.

Rising defense expenditures worldwide are expected to drive the growth of the guided weapon system market in the near future. Defense expenditure refers to the total budget a country allocates to maintain and enhance its military capabilities. Escalating geopolitical tensions have prompted nations to increase their defense spending to strengthen readiness amid regional conflicts and global power rivalries. Increased defense budgets facilitate investments in advanced guided weapon systems, which offer precision-strike capabilities that improve military effectiveness while minimizing collateral damage. For example, the Stockholm International Peace Research Institute, a Sweden-based organization, reported that global military spending reached $2.71 trillion in 2024, representing a 9.4% real-term increase compared to the previous year. Hence, rising defense expenditures are expected to boost the guided weapon system market.

Companies in the guided weapon system sector are concentrating on the development of advanced technologies like electronic warfare-resistant guided missiles to ensure accuracy and effectiveness despite electronic jamming attempts. These missiles are engineered to retain targeting and navigation functions even when electronic signals are intentionally disrupted. For instance, in October 2024, Israel Aerospace Industries, an aerospace and defense company based in Israel, developed the Teaser missile, which features an external aiming system called Teaser-Sight. This system enables the missile to engage targets up to 2.5 kilometers away. Traveling at a speed of approximately 200 meters per second, the missile allows the operator to keep visual contact with the target throughout its flight. Designed for small infantry and special forces units, the lightweight, shoulder-fired weapon is effective against light structures, lightly armored vehicles, and personnel, and operates without relying on satellite navigation.

In April 2025, General Atomics Electromagnetic Systems (GA-EMS), a U.S.-based technology firm, entered a partnership with Rafael Advanced Defense Systems Ltd. to develop precision-guided missiles. Their collaboration focuses on the Bullseye missile, a long-range, precision-guided strike weapon built to meet U.S. military standards and capable of multi-platform launches from air, ground, and sea. Utilizing Rafael’s expertise in modular missile design and testing, this partnership aims to lower development risks and costs, enabling large-scale production of a high-performance missile with significant cost savings per unit. Rafael Advanced Defense Systems Ltd. is an Israeli manufacturer specializing in guided weapon systems.

Major players in the guided weapon system market are Lockheed Martin Corporation, General Dynamics Corporation, Northrop Grumman Corporation, BAE Systems plc, Thales Group, L3Harris Technologies, Inc., Leonardo S.p.A., Textron Inc., Rheinmetall AG, Elbit Systems Ltd., Israel Aerospace Industries Ltd., Hanwha Aerospace, Diehl Defence GmbH & Co. KG, Saab AB, Rafael Advanced Defense Systems Ltd., Kongsberg Defence & Aerospace, MBDA Holdings SAS, Defence Research and Development Organisation, ASELSAN A.S., Bharat Dynamics Limited, Tactical Missiles Corporation JSC, Denel Dynamics, KBP Instrument Design Bureau.

North America was the largest region in the guided weapon system market in 2024. The regions covered in guided weapon system report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the guided weapon system market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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.

The swift increase in U.S. tariffs and the ensuing trade tensions in spring 2025 are significantly affecting the machinery sector by increasing costs for steel, hydraulic systems, and precision bearings critical components often imported from tariff-affected regions. Manufacturers of construction, agricultural, and industrial machinery now face squeezed margins, as many long-term contracts prevent immediate price adjustments. The uncertainty has also delayed investment in automation and smart machinery technologies, slowing productivity gains. To adapt, firms are accelerating local supplier development, redesigning products to use alternative materials, and leveraging predictive maintenance to extend equipment lifespans amid higher replacement costs.

A guided weapon system is a type of armament engineered to accurately steer its trajectory toward a predetermined target using various internal or external guidance mechanisms. It operates with greater precision than unguided systems, often making mid-course adjustments to correct deviations and enhance targeting accuracy. These systems combine multiple components that work together to ensure effective control and targeting throughout the weapon’s flight.

The primary types of guided weapon systems include missiles, guided rockets, guided mortars, and guided bombs. Missiles are self-propelled weapons designed to deliver explosive payloads with high accuracy over various distances. They employ technologies such as infrared, laser, radar, and global positioning system (GPS) and are used in applications like air-to-air missiles, air-to-ground missiles, anti-ship missiles, precision-guided munitions, and unmanned aerial vehicles. These systems are utilized by both defense forces and homeland security agencies.

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

The guided weapon system market consists of revenues earned by entities by providing services such as system integration services, training services, system modernization, and supply chain support. The market value includes the value of related goods sold by the service provider or included within the service offering. The guided weapon system market also includes sales of guidance control units, target acquisition systems, seeker heads, actuation systems, and navigation systems. 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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