Three years ago at the 2022 Farnborough air show, one of the global defence industry’s top executives issued a warning to military and political leaders in Europe: you’re running out of weapons.

Modern precision munitions take time to produce – time that may not be available should conflicts erupt suddenly, warned then-president of Raytheon Wes Kremer in July 2022.

Less than six months into the Russia-Ukraine War, Kremer reported that, based on munition expenditures in Ukraine, European countries in particular had “thin inventories” of key missile systems, many of which were being shipped to Kyiv. Nor could Europe fall back on its traditional strategy of being resupplied by the USA, which was also transferring vast quantities of arms to Ukraine.

“Replenishment doesn’t happen overnight,” Kremer cautioned.

Although he retired from Raytheon in 2024, Kremer’s warning was prescient – and world leaders appear to have taken heed.

Orders for weapons, particularly the long-range precision variety, are pouring into US manufacturers from governments around the world.

”That market is growing exponentially and it’s probably going to continue,” says Tony Bancroft, the commercial aerospace and defence portfolio manager at Gabelli Funds who oversees the defence-focused GCAD exchange traded fund.

During a 6 August Gabelli webinar, Bancroft predicted that, unlike traditional defence programmes dominated by large incumbents, the precision weapons boom stands to reward established producers and new entrants alike.

”They’re all going to benefit from the amount of growth,” Bancroft says.

Growth is already evident in the form of massive new production contracts handed out by the Pentagon and Washington’s global allies.

Raytheon notched its largest-ever order for the AIM-120 Advanced Medium-Range Air-to-Air Missile (AMRAAM) at the end of July, a $3.5 billion multinational contract covering the USA and 19 of Washington’s partners in Europe, Asia and the Middle East.

Several key geo-strategic players were among buyers, including Taiwan and Ukraine.

That award came 11 months after Raytheon landed what had previously been its largest AMRAAM order, in September 2024. That contact was valued at $1.2 billion – one indicator of the pace of growth in demand for air-launched weaponry.

To put the dollar figures into practical context, a January regulatory filing from the US Defense Security Cooperation Agency valued a package of 1,000 AMRAAMs and associated support items at $3.6 billion.

On the same day as the July AMRAAM deal, the Pentagon inked an even-larger contract with Lockheed Martin to expand orders for the AGM-158B/C Joint Air-to-Surface Standoff Missile (JASSM) and Long Range Anti-Ship Missile (LRASM).

That deal adds some $4 billion to Lockheed’s existing AGM-158 production contract, which is now valued at more than $9 billion and includes foreign military sales to Finland, Japan, the Netherlands and Poland.

The development comes after Lockheed made significant investments to establish a second JASSM/LRASM production line – with the expectation Washington would follow through with additional orders.

That bet paid off, with the two lines expected to churn out around 1,100 of the low-observable long-range missiles annually. Fiscal year 2026 budget documents indicate the bulk of that capacity will be devoted to air-to-ground JASSMs, with some 1,734 units listed for procurement under multiple contracts between 2024 and 2026.

A 2023 report on the missile programme indicates the Pentagon has established an inventory target of at least 10,250 JASSMs.

During that same 2024-2026 period, 237 ship-killing LRASMs are listed for purchase in US Navy budget documents. The LRASM and JASSM are highly common and produced at the same two production sites in Troy, Alabama.

A 2022 wargame conducted by the Center for Strategic and International Studies found that air-launched LRASMs would be a key component of any US-backed effort to repel a cross-strait invasion of Taiwan by China.

The latest budget documents confirm the US Air Force has been expending JASSM cruise missiles during operations throughout the Middle East over the past year, meaning those quantities will need to be replaced.

Surging demand for long-range precision munitions, combined with constraints to expanding production for existing designs, have drawn new entrants.

Anduril and L3Harris are both bringing new modular cruise missiles to market, with emphasis on lower prices and faster rates of production – Anduril with the Barracuda and L3Harris with the Red Wolf and Green Wolf.

The designs are expected to have 200-500nm (370-926km) of range – compared to JASSM’s 1,000nm range. But they could be available in greater volumes and offer advanced autonomy technologies, enabling swarming and modular payloads.

Lockheed has also joined the rush for low-cost medium-capability weapons with its Common Multi-Mission Truck, alternatively called Comet.

And Anduril has brought to market its Altius family of “loitering munitions” – a new class of short- and medium-range aerial weapons with modular payloads. These are meant to provide ground troops and rotorcraft pilots with increased flexibility in the form of swarming capabilities and more range.

Anduril recently delivered a first batch of Altius-600M munitions to Taiwan, with chief executive Palmer Luckey making a rare in-person appearance in Taiwan with defence minister Wellington Koo. The Altius-600M boasts a loitering time of 4h.