(Reuters) - Lockheed Martin on Monday said the U.S. Army had awarded it a contract worth up to $4.94 billion to produce Precision Strike Missiles (PrSM).

Defense companies are seeing a surge in weaponry demand, driven by conflicts across the globe.

The Pentagon has been prioritizing purchases of the PrSM, which is to replace the Army Tactical Missile (ATACM).

PrSM is Lockheed's next-generation long-range precision strike missile, capable of neutralizing targets beyond 400 kilometers.

Shares of the defense giant rose more than 1% in afternoon trade.

The news of the company securing the army's indefinite delivery/indefinite quantity contract comes after U.S. President Donald Trump earlier this month awarded the U.S. Air Force's fighter jet contract worth more than $20 billion to Boeing replacing Lockheed's F-22 Raptor.