The Global Arms Market Sets Historic Record: Sales Surge to $679 Billion. Analysis of Trends, Key Players, and Investment Opportunities.
The global defense industry is experiencing an unprecedented rise. According to the Stockholm International Peace Research Institute (SIPRI), the total revenue of the world's top 100 arms manufacturers grew by nearly 6% in 2024, reaching a record $679 billion. Over the past decade, the volume of global arms sales has increased by 26%. Armed conflicts, geopolitical tensions, and a new arms race are fueling this spiral of demand and profits for defense companies.
American Market Dominance
The USA maintains its undeniable leadership in the global military-industrial complex. Five out of the six largest arms corporations in the world are American, including giants such as Lockheed Martin, RTX (Raytheon Technologies), Northrop Grumman, General Dynamics, and Boeing. American companies account for nearly half of total global arms sales (projected at $334 billion in 2024).
The world's largest manufacturer, Lockheed Martin, increased its military order revenue by 3.2% to $64.7 billion, breaking several years of stagnation. Other US leaders also reported revenue growth for the first time since 2018.
Notably, SpaceX, led by Elon Musk, made its debut in the list of the top defense contractors globally, doubling its revenue from military projects in a year to $1.8 billion. SpaceX's entry into this ranking underscores that even relatively new players with innovative offerings can swiftly carve out a significant niche amidst growing 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 on the SIPRI list (excluding Russia) rose by 13% to $151 billion, representing around 22% of the global arms market. European countries are ramping up weapons and equipment production in response to the war in Ukraine and the increased threat from Russia. Twenty-three out of the twenty-six European companies increased sales, with some achieving impressive results:
- Rheinmetall (Germany) - defense revenue grew by 46.6% over the year due to demand for tanks, artillery, and ammunition.
- Czechoslovak Group (Czech Republic) - revenue surged by a record 193% (nearly tripling to $3.6 billion) due to the production of approximately 1 million artillery shells for Ukraine as part of a Czech government initiative.
- JSC Ukrainian Defense Industry (Ukraine) - revenue grew by 41% (to $3 billion) thanks to mass production of armaments for the country’s needs during the war.
Russia's neighbors in Eastern Europe are also enhancing 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 ammunition. The European defense sector is experiencing a boom, but challenges lie ahead—from supplier overloads to shortages of specific materials.
Russia: Growth Amid Sanctions
The Russian defense industry is showing steady growth despite sanctions and restricted access to components. Two Russian companies are featured in the SIPRI ranking: the state corporation Rostec (7th in the world) and the United Shipbuilding Corporation (41st). By the end of 2024, their combined revenue had increased by 23% to $31.2 billion. Notably, Rostec's revenue from arms sales grew by 26.4%, reaching approximately $27 billion.
Western sanctions have not halted production—soaring domestic demand compensated for declining exports. Russian factories significantly ramped up the production of ammunition and equipment for military needs. For instance, the production of 152 mm artillery shells in Russia in 2024 increased fivefold compared to pre-crisis levels. As a result, the Russian defense industry has maintained resilience and is looking to return to global markets after stabilizing conditions. 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 a Chinese Slowdown
The Asian arms market is displaying mixed trends. On one hand, South Korea is emerging as a leader in growth: four South Korean companies from the Top 100 saw a combined revenue increase of 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 boosted sales by 42% to $8 billion, due to deliveries of self-propelled artillery and multiple rocket launchers both domestically and abroad.
Other Asian manufacturers are also gaining traction. India is promoting a policy of import substitution: three Indian companies from the SIPRI ranking increased their combined revenue by 8% to $7.5 billion, facilitated by government defense contracts. The industry in countries such as Pakistan, Indonesia, and Taiwan is developing, but their results remain modest for now.
On the other hand, growth in China unexpectedly slowed down—the second-largest arms market after the USA. According to SIPRI's official data, revenue from 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 government orders within China. However, experts note that this "pause" may be temporary: China continues its extensive military modernization program, and actual military spending is on the rise. The statistical decline may be related to one-off factors, and in the coming years, the Chinese defense industry might return to growth, bolstering competition in the market.
The Middle East Emerges as a Top Contender
Countries in the Middle East and adjacent regions are rapidly increasing weapons production, displacing traditional suppliers in some markets. For the first time, nine companies from the Middle East region appeared in the SIPRI ranking, with a total revenue of approximately $31 billion (+14% year-on-year). Notably, Israel: three Israeli defense companies (including Elbit Systems and Israel Aerospace Industries) collectively increased sales by 16% to $16.2 billion. High demand for Israeli drones, missile defense systems, and precision weapons persists, despite geopolitical risks and criticism of Israel's actions—clients around the world continue their purchases.
Turkey has solidified its position as an exporter of drones, armored vehicles, and missiles. Turkish companies (such as drone manufacturer Baykar) have received substantial orders from Ukraine and nations in Asia and Africa, raising the export component to 95% in certain projects. The success of the Turkish defense industry is supported by active government backing and a focus on external markets.
The Gulf region is also making its mark on the global stage. The United Arab Emirates has created a diversified conglomerate known as EDGE Group, reporting arms sales of $4.7 billion in 2024. Saudi Arabia, Qatar, and other oil-rich states are also investing billions of dollars in local production of drones, ammunition, and military equipment, aiming to reduce dependence on imports and eventually become net exporters of arms.
Conclusions and Prospects for Investors
The record-breaking 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 sector has become one of the most dynamically growing segments. Stocks of many arms companies have strengthened amid rising orders and increased government defense budgets. The largest corporations are expanding their production capabilities, acquiring contractors, and preparing for years of growing demand.
In the short term, this trend is likely to continue. Ongoing conflicts and general geopolitical instability compel countries worldwide to allocate more resources to security, ensuring filled order books for defense companies. However, risks are also present: shortages of skilled labor, disruptions in supply chains, and political restrictions on exports could affect project profitability. Nonetheless, from an investment perspective, the global military-industrial complex is currently in a phase reminiscent of the Cold War era, and many market players are eager to seize this opportunity.
