The Global Arms Market Hits Historic Record: Sales Surge to $679 Billion. Analysis of Dynamics, Key Companies, and Investment Trends.
The global defense industry is experiencing unprecedented growth. According to the Stockholm International Peace Research Institute (SIPRI), the total revenue of the 100 largest arms manufacturers in 2024 increased by nearly 6%, reaching a record $679 billion. Over the past decade, the volume of global arms sales has grown by 26%. Armed conflicts, geopolitical tensions, and a new arms race are driving this spiral of demand and profit for weapons companies.
U.S. Market Dominance
The United States maintains its undisputed leadership in the global military-industrial complex. Five out of the six largest arms corporations in the world are American. These include giants like Lockheed Martin, RTX (Raytheon Technologies), Northrop Grumman, General Dynamics, and Boeing. American companies account for about half of the total global arms sales (in 2024, $334 billion).
The world's largest producer, Lockheed Martin, increased revenue from military contracts by 3.2% to $64.7 billion, breaking a years-long stagnation. Other U.S. leaders also saw their revenues grow for the first time since 2018.
Notably, SpaceX founded by Elon Musk made its debut in the list of the top defense contractors in the world, doubling its military project revenue over the year to $1.8 billion. SpaceX’s entry into the ranking highlights that even relatively new players with innovations can quickly carve out a significant niche amidst rising demand.
Europe Accelerates Defense Production
The European military-industrial complex is demonstrating the highest growth rates. In 2024, the combined revenue of 26 European companies from the SIPRI list (excluding Russia) grew by 13% to $151 billion, accounting for approximately 22% of the global arms market. European countries are ramping up weapons and equipment production in response to the war in Ukraine and increased threats from Russia. Twenty-three out of the 26 European companies increased sales, with some achieving impressive results:
- Rheinmetall (Germany) – defense revenue growth of 46.6% over the year due to demand for tanks, artillery, and munitions.
- Czechoslovak Group (Czech Republic) – growth of a record 193% (almost tripling to $3.6 billion) due to the production of about 1 million artillery shells for Ukraine under a Czech government initiative.
- JSC Ukrainian Defense Industry (Ukraine) – growth of 41% (to $3 billion) thanks to the mass production of weapons for the country’s needs amid the war.
Neighboring countries in Eastern Europe are also expanding military-industrial capacities. Poland has sharply increased its military budget (to 4.2% of GDP) and is investing in local production of military equipment and munitions. The European defense sector is experiencing a boom, although challenges lie ahead—from supplier overloads to shortages of specific materials.
Russia: Growth Despite Sanctions
The Russian defense industry is showing steady growth despite sanctions and restrictions on component access. Two Russian companies are featured in the SIPRI ranking – the state corporation Rostec (ranked 7th in the world) and the United Shipbuilding Corporation (ranked 41st). By the end of 2024, their total revenue grew by 23% to $31.2 billion. Meanwhile, Rostec's revenue from arms sales increased by 26.4%, reaching approximately $27 billion.
Western sanctions have not hindered production—explosive internal demand compensated for the decline in exports. Russian factories significantly increased the output of munitions and equipment for army needs. For example, the production of 152 mm artillery shells in Russia in 2024 was increased fivefold compared to pre-crisis levels. As a result, the Russian defense industry has maintained resilience, and post-stabilization, it aims to return to global markets. The export intermediary Rosoboronexport has already formed a record portfolio of foreign orders exceeding $60 billion, indicating pent-up demand for Russian arms.
Asia: New Leaders and China's "Pause"
The Asian arms market is experiencing mixed trends. On one hand, South Korea has emerged as a leader in growth: four South Korean companies from the Top-100 increased their total revenue by 31% to $14.1 billion. Seoul is actively developing arms exports, securing multi-billion dollar contracts with European and Middle Eastern clients. For instance, the Hanwha Group raised its sales by 42% to $8 billion, driven by exports of self-propelled artillery and MLRS, both domestically and internationally.
Other Asian manufacturers are also gaining prominence. India is promoting a policy of import substitution: three Indian companies in the SIPRI ranking increased their total revenue by 8% to $7.5 billion due to government defense orders. The industry is developing in countries like Pakistan, Indonesia, and Taiwan; however, their achievements are currently more modest.
On the other hand, the growth in China has unexpectedly slowed down—the second-largest arms market after the U.S. According to SIPRI’s official data, the revenue of the eight largest Chinese arms companies decreased by 10% in 2024 to $88 billion. Some giants like NORINCO reported a one-third drop in sales amid anti-corruption investigations and delays in state orders in China. Nevertheless, experts suggest that this "pause" might be temporary: China continues its extensive military modernization program, and its actual arms spending is rising. The statistical decline might be linked to one-time factors, and in the coming years, the Chinese defense industry could return to growth, strengthening competition in the market.
The Middle East Makes Its Mark
Middle Eastern countries and adjacent regions are rapidly ramping up arms production, displacing traditional suppliers in certain markets. For the first time in the SIPRI ranking, nine companies from the Middle East appeared, with total revenue of about $31 billion (+14% year-over-year). Particularly notable is Israel: three Israeli defense companies (including Elbit Systems and Israel Aerospace Industries) collectively increased sales by 16% to $16.2 billion. Demand for Israeli drones, missile defense systems, and precision weapons remains high despite geopolitical risks and criticism of Israel's actions—clients worldwide continue their purchases.
Turkey has solidified its position as an exporter of drones, armored vehicles, and missiles. Turkish companies (such as drone manufacturer Baykar) received large orders from Ukraine, Asian countries, and Africa, raising the export component to 95% in some projects. The success of the Turkish defense industry is supported by active government backing and a focus on external markets.
The Persian Gulf is also entering the global arena. The United Arab Emirates has created a multi-profile conglomerate, the EDGE Group, which reported arms sales of $4.7 billion in 2024. Saudi Arabia, Qatar, and other oil-rich nations are also investing billions of dollars in local production of drones, munitions, and military equipment, aiming to reduce dependence on imports and eventually become net exporters of arms.
Conclusions and Prospects for Investors
The record figures in the arms sector reflect a new reality: the world has entered an era of heightened military spending and rearmament. For investors, the defense industry has become one of the fastest-growing segments. Shares of many arms companies have strengthened amid increasing orders and government defense budgets. Major corporations are expanding production capacities, acquiring contractors, and preparing for years of rising demand.
In the short term, this trend is likely to persist. Ongoing conflicts and general geopolitical instability compel countries worldwide to spend more on security, ensuring that arms companies maintain filled order books. However, risks are also present: a shortage of skilled labor, disruptions in supply chains, and political restrictions on exports could impact project profitability. Nonetheless, from an investment perspective, the global military-industrial complex is currently experiencing a boom reminiscent of the Cold War era, and many market players intend to take advantage of this.
