Guided Weapon System Market Report 2026

The guided weapon system market size has grown strongly in recent years. It will grow from $49.97 billion in 2025 to $53.76 billion in 2026 at a compound annual growth rate (CAGR) of 7.6%. The growth in the historic period can be attributed to military modernization programs, geopolitical tensions, defense budget expansion, demand for accurate strike capabilities, technological advancements in guidance systems.

The guided weapon system market size is expected to see strong growth in the next few years. It will grow to $71.17 billion in 2030 at a compound annual growth rate (CAGR) of 7.3%. The growth in the forecast period can be attributed to increased defense spending, adoption of ai enabled targeting, demand for unmanned combat systems, cross domain warfare strategies, development of next generation missiles. Major trends in the forecast period include rising demand for precision guided munitions, integration of multi sensor guidance systems, advancements in target tracking accuracy, growth in autonomous weapon capabilities, modernization of defense arsenal.

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 companies operating 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 2025. The regions covered in the guided weapon system market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the guided weapon system market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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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