Precision Guided Munition Market (2026 - 2033)

Precision Guided Munition Market Summary

The global precision-guided munition market size was valued at USD 41.9 billion in 2025 and is projected to grow from USD 44.3 billion in 2026 to USD 68.7 billion in 2033, at a CAGR of 6.5% from 2026 to 2033. Asia Pacific dominated the market, accounting for a revenue share of 31.5% in 2025. Enhancements in military operations and the adoption of advanced warfare techniques are anticipated to support market growth over the projected period. Moreover, the increasing deployment of security measures worldwide in recent years is likely to increase the penetration of precision-guided munitions.

The precision-guided munitions market is anticipated to grow, driven by the increasing demand for advanced warfare equipment among major economies to maintain their lead in the global landscape. In addition, rising concerns about national security due to increasing terrorist activities are anticipated to spur demand for precision-guided munitions over the forecast period. Political and territorial conflicts among major economies have increased the adoption of precautionary measures in tactical and military operations. Defense systems in major economies are focusing on procuring advanced war equipment capable of precise operations. These factors are likely to have a positive impact on the market for precision-guided munitions over the forecast period.

The ongoing conflicts between the U.S. and Iran are anticipated to increase defense spending in the coming period, which is likely to influence the market for guided war equipment over the forecast years. Leading global militaries are focusing on procuring advanced warfare equipment to maintain their dominance. Thus, they are likely to drive the demand for precision-guided missiles, rockets, and mortars. In addition, the adoption of advanced positioning systems in nuclear warheads is expected to support market growth. Enhancements in defense systems to address conflicts and protect territories have prompted major countries to deploy advanced defensive and offensive systems. Growing security measures for guarding activities are likely to drive the market for guided war munitions over the forecast period.

Advancements in positioning system technology, including semi-active lasers, radar homing, Inertial Navigation System (INS), and Global Positioning System (GPS) have influenced the market for precision-guided munitions. Furthermore, the compatibility of positioning systems with nuclear warheads in missiles is likely to accelerate their penetration into the market. For instance, In August 2024, the U.S. Army awarded the Javelin Joint Venture (Raytheon and Lockheed Martin) a USD 1.3 billion contract for the production of Javelin missiles and associated equipment. The contract is part of efforts to replenish stockpiles and increase annual production to nearly 4,000 missiles by 2026, reflecting growing demand for precision-guided anti-armor munitions amid geopolitical tensions and military modernization programs.

Analyst Perspective

The precision-guided munition market is poised for sustained growth, driven by rising defense modernization programs, increasing geopolitical tensions, and the growing need for highly accurate strike capabilities. The main factors that might hinder the adoption of precision-guided munitions include the costs of procuring and maintaining advanced technology. Moreover, strict export regulations can pose a major barrier to expansion in this industry. Nevertheless, there has been an emphasis in most militaries worldwide on incorporating advanced guided missile technology, precision-guided loitering weapons, and precision bombs. This is because of their effectiveness in reducing collateral damage while maximizing military efficiency.

Product Insights

The tactical missiles segment led the market, accounting for approximately 71.0% of global revenue in 2025. This trend is attributed to their long-range travel and their ability to significantly damage targets. These missiles can be installed with nuclear warheads coupled with navigation systems and can be launched from the surface and air to destroy targets at their desired locations. These factors are likely to support the market segment in the estimated timeframe. For instance, in September 2025, L3Harris secured a USD 292 million contract to continue producing solid-rocket motors for the Javelin missile system. The contract reflects the growing emphasis on tactical missile procurement and production expansion to meet demand from the U.S. military and allied nations.

Guided rockets are expected to see moderate growth over the estimated period, owing to their low cost and lightweight nature. However, limited or short-range travel by these rockets is anticipated to pose a challenge to their market growth. On the other hand, developments in guided rocket systems are expected to increase their penetration into the precision-guided munitions market during the projected period.

The loitering munition product category is anticipated to grow significantly over the projected period, owing to its unique capability to loiter around the target and strike at a precise location. Moreover, the lightweight nature and partially automated mechanisms in components that do not require human intervention are likely to accelerate their market penetration. For instance, in February 2025, AeroVironment received a USD 288 million delivery order from the U.S. Army for its Switchblade loitering munition systems under a broader USD 990 million contract. The award underscores the growing military preference for loitering munitions capable of surveillance and precision engagement of time-sensitive targets.

The guided ammunition segment, which includes bombs, bullets, mortars, and artillery shells, is anticipated to grow moderately in the coming period, owing to its lower adoption rate in defense systems. Short range and lower destruction at the target location are factors expected to pose a challenge to its growth within the estimated time.

Technology Insights

The semi-active laser guidance technology for locating targets accounted for approximately 26.0% of global revenue in 2025. Fast coordination by illuminating the target for aerial attack is the primary factor driving the growing demand for guided weapons. The semi-active laser guidance for war weapons is likely to be replaced by the Global Positioning System (GPS) in the estimated timeframe. Detection of the exact target location, with real-time target movement data, is likely to drive the popularity of GPS-enabled guided munitions for long-range warfare. For instance, in January 2025, the United Operational Test Team conducted the first-ever dual external release of the GBU-54 Laser Joint Direct Attack Munition (LJDAM) from an F-35 aircraft. The GBU-54 integrates semi-active laser guidance with GPS/INS navigation to engage both stationary and moving targets with high accuracy.

The infrared-enabled guided munition segment is expected to grow significantly in the precision guided munition market, owing to its low cost and precise location-detection capabilities. Infrared components attached to war equipment occupy less space and are lightweight, and thus are widely installed in missiles, rockets, and artillery. However, the enhanced accuracy and precision offered by counterparts are expected to hamper demand for them during the projected period.

Radar-homing guidance systems are primarily used for missile guidance, enabling missiles to locate targets autonomously. These systems are equipped with radar transceivers and the necessary electronics that simplify their location operations. This guidance system is extremely popular in tactical ballistic missiles.

Regional Insights

The Asia Pacific region dominated the market and accounted for approximately 31.5% of the revenue share in 2025. The industry is anticipated to continue the same trend over the forecast period. China, South Korea, India, North Korea, Pakistan, and Japan are among the largest economies ordering tactical warfare. Growing tensions between the countries in this region and the need to strengthen defense capabilities are likely to create scope for the precision-guided munition industry. For instance, in November 2025, India and France signed an agreement to support the indigenous production of the HAMMER (Highly Agile Modular Munition Extended Range) precision-guided weapon system. This partnership is formed by the purpose of strengthening India's domestic defense manufacturing capabilities while enhancing access to advanced precision-strike technologies, reflecting the country's ongoing efforts to modernize its armed forces amid evolving regional security challenges

Growing tensions between India and Pakistan have led India to strengthen its defense capabilities with the addition of enhanced missiles, including Prithvi, Agni, Brahmos, and others. Moreover, technological developments and collaborations with foreign defense departments for modern war equipment are projected to increase the penetration of guided weapons. The ongoing conflict between Iran and the U.S. has led to enhancements in the military operations of both countries, thereby driving demand for these products. Strong R&D by the U.S. military has led to the development of long-range missiles and rockets with precision to hit targets autonomously.

Europe Precision Guided Munition Market Trends

The presence of prominent manufacturers in Europe, coupled with high investments in military operations by economies such as the UK, Germany, France, Italy, and Russia, is anticipated to drive growth in the guided weapons market. Moreover, military developments in Russia are further expected to advance the production of improved artillery and missiles, which is expected to have a positive impact on the market. For instance, in 2025, the UK Ministry of Defense awarded MBDA an approximately USD 2.1 billion (GBP 1.6 billion) contract to manufacture and support advanced air defense missiles, including CAMM (Common Anti-Air Modular Missile) systems. The agreement is expected to strengthen the UK's sovereign missile manufacturing capabilities while supporting the expansion of precision-guided missile production across Europe.

The global precision-guided munitions industry has consistently seen mergers and acquisitions among major players to ensure competitiveness and profitability and to establish a strong foothold in the market. Technological advancements in the U.S. and in European countries, including Germany and France, in manufacturing guided munitions are expected to influence the growth of the global precision-guided munition market.

Countries such as China, South Korea, India, France, Saudi Arabia, Germany, Israel, and South Africa are expected to further boost demand in the precision-guided munitions industry. However, the high costs of research & development and international import/export regulations are expected to hinder market growth over the forecast period.

Key Precision Guided Munition Market Companies Insights

Key players in the market include General Dynamics, Lockheed Martin Corporation, Raytheon, Northrop Grumman, and Elbit Systems, among others. Market participants are increasingly focusing on long-range precision strike capabilities, loitering munitions, and advanced guided ammunition through strategic contracts, partnerships, and production expansion initiatives. For instance, in July 2024, Elbit Systems was awarded a contract worth approximately USD 190 million to supply its Iron Sting laser- and GPS-guided mortar munition to the Israeli Ministry of Defense. The contract highlights the growing demand for precision-guided munitions that enhance strike accuracy while minimizing collateral damage in modern combat environments.

Key Precision Guided Munition Market Companies

The following key companies have been profiled for this study on the precision guided munition market.

• Lockheed Martin

• Atlas Elektronik

• Raytheon

• Thales Group

• BAE Systems

• Northrop Grumman

• General Dynamics

• Elbit Systems

Recent Developments

• In March 2025, Lockheed Martin secured an Indefinite Delivery Indefinite Quantity (IDIQ) contract worth up to USD 4.94 billion from the U.S. Army for the production of additional Precision Strike Missiles (PrSM).

• In April 2025, Elbit Systems secured a USD 130 million contract to supply advanced rocket munitions and its Precise and Universal Launching System (PULS) to a European customer, underscoring the increasing demand for precision-strike capabilities among European armed forces

Precision Guided Munition Market Report Scope

Global Precision Guided Munition Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2021 to 2033. For this study, Grand View Research has segmented the global precision guided munition market report on the basis of product, technology, and region:

• Product Outlook (Revenue, USD Million, 2021 - 2033)

  • Tactical Missiles

  • Guided Rockets

  • Guided Ammunition

  • Loitering Munition

• Technology Outlook (Revenue, USD Million, 2021 - 2033)

  • Infrared

  • Semi-Active Lasers

  • Inertial Navigation System (INS)

  • Global Positioning System (GPS)

  • Radar Homing

  • Anti-Radiation

  • Others

• Regional Outlook (Revenue, USD Million, 2021 - 2033)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Russia

  • Asia Pacific

    • China

    • India

    • South Korea

  • Central & South America (CSA)

    • Brazil

    • Argentina

  • Middle East & Africa (MEA)

    • Saudi Arabia

    • Iran