In this article, we look at the 15 largest weapon manufacturers in the world and discuss the impact the volatile situation in Europe has had on global defense spending. If interested, you can also read our recent piece on NATO Spending by Country Per Capita: Top 15 Countries.
The latest figures released by the Stockholm International Peace Research Institute (SIPRI) in April this year estimated the global military spending in 2023 at a record-high of $2.44 trillion, up 6.8% compared to 2022. The year witnessed the steepest rise in defense expenditure since 2009, and was the ninth successive year in which defense spending had increased worldwide.
The United States continued to remain the largest spender on military expenditure in 2023 as well, having incurred a whopping $916 billion in defense bills during the year, growing 2.3% from last year. Washington’s spending represented 37.5% of the world’s military expenditure and accounted for 68% of all NATO spending. $588 billion was spent by countries in Europe, which was equivalent to 24% of the global share. Of this amount, an overwhelming 69% was expensed in Central and Western Europe. Both Russia and Ukraine substantially increased their military expenditure during the year, whereas other countries in the region actively racked up their defenses as well with war having returned to the continent after decades of peace.
Another report by SIPRI highlighted that arms imported by countries in Europe between 2019-2023 were 94% higher than the monetary volume in 2014-2018. The United States was the origin of an estimated 55% of all weapons received by Europe, making the country the largest exporter of arms in the world.
The spike in defense expenditure has resulted in a boom in the defense industry. Lockheed Martin Corporation (NYSE:LMT)’s stock price has surged 29% since the start of the war in Ukraine. Several countries in Europe are eying the company’s famed F-35 fifth-generation fighter, while the production of HIMARS is also in full swing to replenish stocks of allies arming Kyiv. This month, the US Army awarded a $861 million contract to Lockheed Martin Corporation (NYSE:LMT) for the supply of additional HIMARS, believed to be linked to military assistance for Ukraine. According to the Defense Post, the contract did not specify the number of launchers ordered, but is expected to be around 288 based on previous solicitation documents that were seen.
RTX Corporation (NYSE:RTX)’s numbers have also been promising, having posted $68.9 billion in revenue in 2023, with a year-on-year growth of 3%, aided by the ongoing conflict in Europe. Between February 2022, when the war started, and October 2023, the company had received orders worth $3 billion for its AMRAAM rockets alone to assist Ukraine in pushing back advancing Russian troops. Earlier last year in March, RTX Corporation (NYSE:RTX) also won a $1.2 billion contract from Germany to build Patriot air and missile defense systems for the country and boost its air defenses, while in November, Hungary received the delivery of two units of the NASAMS air defense system it had ordered from Kongsberg Defence & Aerospace and RTX Corporation (NYSE:RTX).
The beginning of the conflict in the Middle East with Israel invading Gaza against Hamas has also bolstered the financials of defense manufacturers. According to a recent report by Reuters, both Lockheed Martin Corporation (NYSE:LMT) and RTX Corporation (NYSE:RTX) are set to profit big after President Biden last month announced to provide $61 billion in aid to Ukraine and $26 billion to Israel. Defense analysts expect much of these amounts to go into the procurement of pricey military equipment from these two companies.
Moreover, General Dynamics Corporation (NYSE:GD) has also reported an increase in its artillery production from 14,000 rounds per month to 20,000. The company’s 155-millimeter artillery replacements have played a vital role in Kyiv’s fightback against Russia, which has been regularly provided to the country as part of military assistance by the United States. In 2023, General Dynamic Corporation (NYSE:GD) recorded the highest revenue in its history of $42.3 billion, which was up 7.7% from the previous year.
Methodology
The largest weapon manufacturers in the world are ranked in ascending order of arms revenue in 2022. This is the latest year for which revenue breakdown is available for all major defense companies in the world. Data has been sourced from the Stockholm International Peace Research Institute (SIPRI).
By the way, Insider Monkey is an investing website that uses a consensus approach to identify the best stock picks of more than 900 hedge funds investing in US stocks. The website tracks the movement of corporate insiders and hedge funds. Our top 10 consensus stock picks of hedge funds outperformed the S&P 500 stock index by more than 140 percentage points over the last 10 years (see the details here). So, if you are looking for the best stock picks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
With that said, let’s now head over to the list of the largest defense manufacturers in the world.
15. China Aerospace Science and Industry Corporation
Country of Origin: China
Total Revenue in 2022: $37.36 billion
Arms Revenue in 2022: $11.77 billion
Share of Overall Revenue: 32%
We begin with the China Aerospace Science and Industry Corporation (CASIC), which is a state-owned Chinese enterprise that manufactures a wide range of launch vehicles, spacecraft, and missile systems for the country’s military. It is the largest manufacturer of missiles in China. Despite a drop of 6.7% in its arms revenue compared to 2021, CASIC is among the largest weapon manufacturers in the world.
14. Airbus
Country of Origin: Trans-European
Total Revenue in 2022: $61.8 billion
Arms Revenue in 2022: $12.09 billion
Share of Overall Revenue: 20%
Next up is Airbus. About one-fifth of its overall revenue is from defense-related sales, and that still makes up for a significant volume of over $12 billion. The company was awarded a $1.2 billion contract in 2022 to provide logistical and engineering support for the US Army’s UH-72A and UH-72 B Lakota fleet of helicopters.
13. Leonardo
Country of Origin: Italy
Total Revenue in 2022: $15.03 billion
Arms Revenue in 2022: $12.47 billion
Share of Overall Revenue: 83%
Italian aerospace company Leonardo, is a key player in the global defense industry, especially because of its active role in the Global Combat Air Programme that is aimed at building a sixth-generation fighter jet to replace the Eurofighter Typhoon. The company generated over $15 billion in revenue in 2022, a large majority of which came from arms sales.
12. L3Harris Technologies, Inc. (NYSE:LHX)
Country of Origin: United States
Total Revenue in 2022: $17.06 billion
Arms Revenue in 2022: $12.63 billion
Share of Overall Revenue: 74%
L3Harris Technologies, Inc. (NYSE:LHX) was formed in 2019 as a result of a joint venture between L3 Technologies and Harris Corporation. It is one of the largest weapon manufacturers in the world, known especially for its night vision and wireless military equipment. In December 2022, L3Harris Technologies, Inc. (NYSE:LHX) announced plans to acquire aerospace propulsion systems maker Aerojet Rocketdyne for $4.7 billion.
11. China Electronics Technology Group Corporation
Country of Origin: China
Total Revenue in 2022: $55.84 billion
Arms Revenue in 2022: $15.08 billion
Share of Overall Revenue: 27%
Established in 2002, the China Electronics Technology Group Corporation has expertise in manufacturing communication equipment, electronics, computers, software development, networks, and other IT-related products and services. It is a state-owned organization that provides civilian electronics for use by the People’s Liberation Army. With over $15 billion in arms revenue in 2022, it is one of the largest defense manufacturers in the world, despite arms revenue only accounting for 27% of its overall sales.
10. Rostec
Country of Origin: Russia
Total Revenue in 2022: $30.29 billion
Arms Revenue in 2022: $16.81 billion
Share of Overall Revenue: 55%
Rostec is a Russian state-owned conglomerate that has 15 holding companies, of which eleven are in the defense sector, and manufacture aircraft, drones, tanks, and artillery. The company earned $16.81 billion in revenue in 2022, which made up over half of its overall revenue.
9. China Aerospace Science and Technology Corporation
Country of Origin: China
Total Revenue in 2022: $44.46 billion
Arms Revenue in 2022: $19.56 billion
Share of Overall Revenue: 44%
The China Aerospace Science and Technology Corporation manufactures tactical missiles, launch vehicles, and ground equipment for the People’s Liberation Army (PLA). It is also the primary contractor of China’s space program. The company generated over $19.5 billion in defense-related revenue during 2022. It is among the largest weapon manufacturers in the world.
8. Aviation Industry Corporation of China
Country of Origin: China
Total Revenue in 2022: $82.5 billion
Arms Revenue in 2022: $20.62 billion
Share of Overall Revenue: 25%
According to SIPRI, the Aviation Industry Corporation of China, abbreviated as AVIC, generated $20.62 billion in arms revenue in 2022, which amounted to one-fourth of the company’s overall sales during the year. The state-owned Chinese corporation is credited with building the J-20 – one of the most advanced fighter jets in the world, as well as the JF-17 Thunder, which was built in collaboration with Pakistan.
7. NORINCO
Country of Origin: China
Total Revenue in 2022: $82.54 billion
Arms Revenue in 2022: $22.06 billion
Share of Overall Revenue: 27%
On the seventh spot is NORINCO, which does business internationally by the name, but is officially the China North Industries Group Corporation Limited. The company has expertise in the manufacturing of unmanned aerial vehicles, aircraft, missiles, rockets, radars, tanks, firearms, and artillery. The US government led by President Trump in 2020 placed sanctions against NORINCO and banned American citizens and corporations from owning shares in the corporation.
6. BAE Systems
Country of Origin: United Kingdom
Total Revenue in 2022: $27.71 billion
Arms Revenue in 2022: $26.9 billion
Share of Overall Revenue: 97%
Next on our list of the largest weapon manufacturers in the world is Britain’s BAE Systems, which earned nearly $27 billion in arms revenue in 2022, which was equivalent to 97% of its overall sales, according to the Stockholm International Peace Research Institute (SIPRI). The company has a market cap of £41.68 billion ($53 billion), making it one of the most valuable companies in the United Kingdom.
5. General Dynamics Corporation (NYSE:GD)
Country of Origin: United States
Total Revenue in 2022: $39.41 billion
Arms Revenue in 2022: $28.32 billion
Share of Overall Revenue: 72%
General Dynamics Corporation (NYSE:GD) posted a revenue of over $39 billion in 2022, of which 72% was represented by defense related sales. It is credited for building the Virginia-class submarines for the US Navy and is also the primary contractor for the Columbia-class. The company also has a combat unit, whose sales figures have surged amid the war in Ukraine, as the United States and allies procure tanks, armored vehicles and artillery from General Dynamics Corporation (NYSE:GD) to arm Kyiv.
Hedge Fund Resource Center