US Target Drones Market Size, Share & Forecast (2025-2035)
The US Target Drones market is experiencing robust expansion, driven by rising defense investments, rapid technological advancements, and growing adoption across military and commercial applications. Target drones are unmanned aerial or surface vehicles designed to simulate enemy threats for training and weapon testing, essential for modern defense strategies. The market includes aerial, ground, and naval target drones, integrated with the latest autonomous, semi-autonomous, and remote piloting technologies. As the demand for advanced training tools intensifies, the market witnesses innovation in AI-driven drone operations and increased procurement by defense agencies. Key players like Kratos, Northrop Grumman, and Boeing offer scalable solutions, and supportive government initiatives accelerate adoption. Distribution primarily occurs via direct sales and defense contractors, with the commercial segment showing growth. Despite significant opportunities, challenges including budget constraints and the need for rigorous regulatory compliance persist. The market is projected to achieve significant revenue milestones by 2035, reflecting ongoing investments and modernization efforts.
Latest Market Dynamics
Key Drivers
Surge in Defense Spending and Military Modernization: The US government’s increased defense budgets directly fuel target drone procurement for enhanced training and weapon system validation. For example, Kratos Defense & Security Solutions secured multi-million-dollar contracts with the US Air Force in 2024 to supply advanced aerial target drones, driving segment growth.
Technological Advancements in Autonomous and Hybrid Drones: Continuous innovation in drone autonomy, sensor integration, and AI-based navigation boosts the adoption of target drones. Boeing’s development of AI-enabled target drones in the past year exemplifies the shift towards more sophisticated and realistic threat emulation.
Key Trends
Integration of Artificial Intelligence and Machine Learning: Companies like Northrop Grumman are embedding AI/ML in target drones to simulate unpredictable enemy behavior, providing more dynamic and challenging scenarios for armed forces.
Expansion into Commercial and Homeland Security Applications: Beyond traditional military uses, target drones are seeing rising demand for security simulation and commercial testing. In 2025, Lockheed Martin expanded offerings to support critical infrastructure security training, highlighting broader application horizons.
Key Opportunities
Growing Demand for Combat Readiness Training and Live-Fire Exercises: Agencies seek advanced, realistic target systems to fully train personnel and validate new defense technologies. Textron’s new contracts with the US Navy in 2025 underline this opportunity.
Rising Adoption in Aerospace R&D and Testing: Aerospace manufacturers are increasingly leveraging target drones for aircraft and weapon systems validation. Airbus S.A.S. collaborated with US entities in 2025 to test innovative flight systems using target drones.
Key Challenges
Stringent Regulatory and Compliance Requirements: Compliance with evolving FAA and DoD regulations complicates rapid deployment. QinetiQ Group PLC reported project delays in 2024 due to new certification requirements.
High Operational and Maintenance Costs: The significant resources needed for maintenance and repeated drone operations limit small or mid-sized organizations from scaling up. Griffon Aerospace noted increased lifecycle costs impacting smaller buyers in the current year.
Key Restraints
Budget Constraints in Non-Defense Segments: Despite overall market growth, limited budgets in homeland security and commercial sectors restrict large-scale acquisitions. In 2025, some projects by AeroTargets International LLC were postponed due to funding challenges.
Concerns over Security and Data Protection: As AI and connectivity grow, target drone operations face increased cyber-security threats. Northrop Grumman and others have invested in hardening drone systems to address these concerns.
In 2025, aerial target drones dominate the US target drones market, reflecting the preeminent role of realistic air-based threat simulations for military and defense purposes. The rapid expansion of advanced aerial targets is driven by higher investment in live-fire training exercises and missile testing. Ground target drones follow, serving vital roles in armored vehicle and land-based weapon system training. Naval target drones, though comparatively smaller, have seen increased adoption with the modernization of naval training programs. Fixed-wing target drones represent the largest sub-type for aerial missions, while rotary-wing types cater to specialized simulations. The market landscape reveals a strong focus on innovation, autonomous features, and operational flexibility to address evolving defense priorities.
US Target Drones Market Share by Application, 2025
Military applications comprise the largest share of the US target drones market in 2025, representing the industry’s core demand segment. Training, live-fire exercises, and weapon system calibration activities drive consistent investment from defense agencies. Homeland security and defense segments continue to expand as drones are increasingly employed for counter-threat operations, border surveillance, and infrastructure protection. Commercial and aerospace applications, though less dominant, are experiencing steady growth propelled by demand for product testing and R&D. Key players are responding by customizing platform offerings for diverse user needs, accelerating the integration of target drones in new domains beyond traditional military environments.
Market revenue for the US target drones sector is on a steep upward trajectory, spurred by sustained government defense allocations and rising deployment in commercial and research applications. In 2020, market revenue stood at $700 Million, climbing to $1,100 Million in 2025 as modernization initiatives and procurement activity intensified. Forecast trends point towards continued double-digit CAGR, with revenue expected to surpass $2,500 Million by 2035. This growth underscores the centrality of target drones in future-oriented training and simulation strategies, supported by robust investments in AI-driven and autonomous solutions. Stakeholders anticipate further acceleration owing to technology convergence, export opportunities, and diversified demand across both public and private sectors.
The US target drones market shows healthy year-on-year growth throughout the forecast period, averaging between 7% and 10% annually. The period from 2020 to 2025 experienced an uptick in growth rates due to major modernization projects and increased procurement activities, especially across the defense sector. YOY growth is projected to stabilize at slightly lower rates post-2030, reflecting market maturation but still remaining robust by historical standards. Investment in next-gen drones and persistent requirements for defense preparedness sustain momentum, even as commercial applications gradually supplement core defense demand.
In 2025, the Western US emerges as the most active region for target drone deployment, led by significant defense installations, aerospace hubs, and ongoing federal contracts. The Southern US follows, driven by military bases and aviation R&D, while the Eastern and Central regions continue to participate robustly via homeland security and defense procurement programs. Regional demand dynamics are shaped by federal funding distribution and proximity to leading drone suppliers, resulting in nuanced but persistent nationwide growth across diverse applications.
The competitive landscape in 2025 is led by Kratos Defense & Security Solutions, which holds the largest market share owing to its established defense contracts and diversified drone portfolio. Northrop Grumman and Boeing follow, each leveraging advanced technologies and broad customer bases to maintain substantial shares. Lockheed Martin, Leonardo S.p.A., QinetiQ Group, and Griffon Aerospace also retain significant market footholds. Ongoing M&A activities, tech partnerships, and investments in AI-driven platforms enable leading players to sustain competitive advantages and fuel market expansion.
Federal defense agencies account for the highest share of target drone purchases in 2025, underpinning their central role in driving market demand. Homeland security agencies, private defense contractors, and large research institutions also represent substantial buyers, reflecting the diversification of target drone applications. The distribution landscape is further broadened by commercial and aerospace enterprises engaging in R&D, product validation, and infrastructure testing. These trends confirm that while defense remains core, buyer profiles are quickly evolving as new operational use cases emerge.
June 2024 – Kratos Defense secured a $50 Million contract extension to supply high-performance target drones to the US Air Force for advanced weapons testing.
July 2024 – Northrop Grumman announced successful testing of next-gen autonomous target drones equipped with AI-based threat simulation.
August 2024 – The Boeing Company partnered with the US Navy to deliver unmanned naval target drone platforms with enhanced endurance capabilities.
September 2024 – Lockheed Martin unveiled a new rotary-wing target drone line tailored for homeland security and border surveillance training.
October 2024 – Griffon Aerospace opened a state-of-the-art manufacturing facility in Alabama to expand production capacity for aerial and ground target drones.
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About the Author
Lena
Senior Research Consultant
Lena is a Senior Research Consultant specializing in market research, industry analysis, and business consulting across Aerospace & Defence. Lena brings a commercially grounded perspective to sectors shaped by changing demand, innovation, and competitive dynamics, helping turn complex market trends into clear strategic insights for business decision-makers. With 10+ years of experience across research, analytics, and strategic advisory roles, Lena has helped organizations translate data into actionable growth strategies.
