The smart weapons market is experiencing significant growth driven by increasing global defense spending, rapid adoption of precision-guided munitions, and advancements in AI-enabled targeting systems for modern warfare.
Hyderabad, India, March 27, 2026 (GLOBE NEWSWIRE) — According to a recently published report by Mordor Intelligence, the smart weapons market size is projected to reach USD 22.26 billion in 2026, up from USD 20.72 billion in 2025, and is expected to grow to USD 31.89 billion by 2031, registering a 7.45% CAGR. This growth is largely driven by rising defence budgets and a clear shift toward precision-based warfare over traditional firepower. Initiatives such as NATO’s push to exceed 2% of GDP defence spending and the EU’s EUR 800 billion ReArm Europe program are ensuring steady long-term demand. At the same time, modernization efforts across the Asia-Pacific are expanding the market landscape. While challenges like inflation, semiconductor shortages, and rising material costs persist, they are also encouraging innovation in modular systems and AI-powered targeting technologies, especially as militaries prioritize minimizing collateral damage.
Smart Weapons Market Trends and Growth Drivers
Growing Focus on Precision Strikes to Reduce Collateral Damage: Modern urban warfare has made indiscriminate attacks increasingly unacceptable, pushing militaries toward highly accurate single-shot strike capabilities using advanced systems. Today’s precision goes beyond just hitting targets and includes features like real-time retargeting and the ability to abort strikes mid-flight if conditions change. Defence planners are also prioritizing smaller and more controlled warheads designed to limit unintended damage. As a result, precision-guided weapons are becoming essential across all levels of military operations, from ground troops to long-range strike systems.
Increasing Defence Spending Across Major Global Economies: Stronger defence spending across allied nations is driving steady demand for precision-guided weapons. Countries are channeling larger budgets into advanced missiles, glide bombs, and long-range strike systems, while joint European procurement efforts are helping reduce costs through shared production. This coordinated approach is enabling manufacturers to move toward more consistent, large-scale output and faster delivery timelines. However, rising demand is also putting pressure on supply chains, particularly for key components, increasing the risk of delays.
Phani Kumar, Senior Research Manager, Mordor Intelligence, says, “Evolving procurement priorities and modernization programs continue to influence demand in the smart weapons market, reflecting broader defense spending patterns. This analysis is grounded in consistently validated datasets and cross-checked market perspectives, offering decision-makers a dependable, balanced view.”
Smart Weapons Market Share by Region
North America holds a leading position in the smart weapons market, supported by strong investments in advanced missile and precision strike programs. The United States continues to drive demand through large-scale production initiatives, while Canada’s participation in collaborative defence projects adds further momentum. A well-established industrial ecosystem, with capabilities spanning key components to final systems, helps the region manage supply chain disruptions, although ongoing semiconductor shortages are encouraging stockpiling strategies.
Europe’s smart weapons market is gaining momentum in the wake of recent geopolitical tensions, with countries increasing defence budgets and expanding production capabilities. Major players are scaling up manufacturing facilities, while collaborative programs are strengthening the region’s push for greater technological independence. Efforts to reduce reliance on external suppliers are accelerating innovation, and countries in Eastern Europe are actively boosting procurement of precision strike systems, supporting a more distributed production network across the region.
Smart Weapons Market Segmentation Insights
By Product
- Smart Missiles
- Smart Bombs
- Guided Rockets and Projectiles
- Loitering Munitions
- Directed Energy Weapons
By Technology
- Satellite/GNSS Guidance
- Laser Guidance
- Radar Guidance
- Infra-Red/Imaging Guidance
- Multi-mode and AI-enabled Guidance
By Platform
- Land
- Airborne
- Naval
By End-User
- Military
- Homeland Security
For a full breakdown of market dynamics, segmentation insights, and competitive landscape, access the details of the Mordor Intelligence report
https://www.mordorintelligence.com/industry-reports/smart-weapons-market?utm_source=globenewswire
Smart Weapons Industry Companies
- Lockheed Martin Corporation
- RTX Corporation
- The Boeing Company
- BAE Systems plc
- Northrop Grumman Corporation
- Israel Aerospace Industries Ltd.
- Rafael Advanced Defense Systems Ltd.
- Rheinmetall AG
- MBDA
- Safran SA
- Thales Group
- Saab AB
- L3Harris Technologies, Inc.
- Elbit Systems Ltd.
- Hanwha Systems
- AeroVironment, Inc.
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