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General Dynamics Wins a $1.9B Contract to Aid Virginia Class Submarines
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Key Takeaways
General Dynamics won a $1.85B contract to support Virginia Class Block VI submarine construction.
GD's Electric Boat unit will supply materials and begin preliminary work across several U.S. sites.
Rising global defense demand and submarine upgrades are boosting GD's role in naval modernization.
General Dynamics Corporation’s (GD - Free Report) business unit, Electric Boat, recently clinched a modification contract involving Virginia Class Block VI submarines. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of GD’s Deal
Valued at $1.85 billion, the contract is expected to be completed by September 2035. Per the terms of the contract, the company will provide long lead time materials and support with preliminary construction efforts associated with Virginia-class Block VI submarines.
The work under this contract will be executed in Sunnyvale, CA; Tucson, AZ; Chesapeake, VA and several other locations across the United States.
What’s Favoring GD Stock?
With countries worldwide enhancing their defense capabilities, spending on advanced military systems, including submarines, has been rapidly rising. General Dynamics, a renowned manufacturer of submarines that provides yard support and associated solutions for these submarines, thus enjoys a steady stream of contracts for submarine manufacturing and associated services, like the latest one.
Notably, Virginia Class submarines are built for modern missions, including anti-submarine warfare, surface combat, special operations and intelligence gathering. Effective in coastal and deep waters, the stealthy design and compatibility of these submarines with other military systems make them vital to the U.S. Navy, strengthening national security and surveillance capabilities.
Such notable features of the aforementioned submarines are likely to have boosted their demand.
GD’s Growth Prospects
Increasing demand for advanced submarine technologies like stealth capabilities, underwater surveillance and long-range strike systems, as well as the growing complexity of modern naval warfare, has been boosting the growth opportunities of the submarine market.
This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 7.6% for the global submarine market during the 2025-2030 time period.
This is likely to benefit General Dynamics, with its Electric Boat business division responsible for all aspects of design and engineering of Columbia-class ballistic missiles and Virginia-class attack submarines.
Opportunities for Other Defense Stocks
Other defense companies that are likely to enjoy the perks of the expanding global submarine market have been discussed below.
Huntington Ingalls Industries (HII - Free Report) : Through its Newport News Shipbuilding division, HII is involved in producing the Columbia-class and Virginia-class submarines, two key assets of the U.S. Navy. The company provides fleet services to its submarines around the world, offering modernization, repair and installation services.
Huntington has a long-term (three to five years) earnings growth rate of 11%. The Zacks Consensus Estimate for HII’s 2025 sales indicates year-over-year growth of 3.3%.
BAE Systems (BAESY - Free Report) : It plays a vital role in the production of advanced submarines, particularly in the United Kingdom’s defense sector. BAE Systems is the primary manufacturer of the Astute-class nuclear submarines, which are integral to the Royal Navy's fleet.
BAE Systems has a long-term earnings growth rate of 13.4%. The Zacks Consensus Estimate for BAESY’s 2025 sales indicates year-over-year growth of 62.6%.
Northrop Grumman Corporation (NOC - Free Report) : It is a renowned provider of missile launch systems for naval submarines. The company manufactures Launcher Subsystem hardware to support the Columbia and Dreadnought common missile compartment program.
Northrop has a long-term earnings growth rate of 3.3%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 2.8%.
GD Stock’s Price Movement
Shares of GD have gained 6.5% in the past month compared with the industry’s 2% growth.
Image: Bigstock
General Dynamics Wins a $1.9B Contract to Aid Virginia Class Submarines
Key Takeaways
General Dynamics Corporation’s (GD - Free Report) business unit, Electric Boat, recently clinched a modification contract involving Virginia Class Block VI submarines. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of GD’s Deal
Valued at $1.85 billion, the contract is expected to be completed by September 2035. Per the terms of the contract, the company will provide long lead time materials and support with preliminary construction efforts associated with Virginia-class Block VI submarines.
The work under this contract will be executed in Sunnyvale, CA; Tucson, AZ; Chesapeake, VA and several other locations across the United States.
What’s Favoring GD Stock?
With countries worldwide enhancing their defense capabilities, spending on advanced military systems, including submarines, has been rapidly rising. General Dynamics, a renowned manufacturer of submarines that provides yard support and associated solutions for these submarines, thus enjoys a steady stream of contracts for submarine manufacturing and associated services, like the latest one.
Notably, Virginia Class submarines are built for modern missions, including anti-submarine warfare, surface combat, special operations and intelligence gathering. Effective in coastal and deep waters, the stealthy design and compatibility of these submarines with other military systems make them vital to the U.S. Navy, strengthening national security and surveillance capabilities.
Such notable features of the aforementioned submarines are likely to have boosted their demand.
GD’s Growth Prospects
Increasing demand for advanced submarine technologies like stealth capabilities, underwater surveillance and long-range strike systems, as well as the growing complexity of modern naval warfare, has been boosting the growth opportunities of the submarine market.
This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of 7.6% for the global submarine market during the 2025-2030 time period.
This is likely to benefit General Dynamics, with its Electric Boat business division responsible for all aspects of design and engineering of Columbia-class ballistic missiles and Virginia-class attack submarines.
Opportunities for Other Defense Stocks
Other defense companies that are likely to enjoy the perks of the expanding global submarine market have been discussed below.
Huntington Ingalls Industries (HII - Free Report) : Through its Newport News Shipbuilding division, HII is involved in producing the Columbia-class and Virginia-class submarines, two key assets of the U.S. Navy. The company provides fleet services to its submarines around the world, offering modernization, repair and installation services.
Huntington has a long-term (three to five years) earnings growth rate of 11%. The Zacks Consensus Estimate for HII’s 2025 sales indicates year-over-year growth of 3.3%.
BAE Systems (BAESY - Free Report) : It plays a vital role in the production of advanced submarines, particularly in the United Kingdom’s defense sector. BAE Systems is the primary manufacturer of the Astute-class nuclear submarines, which are integral to the Royal Navy's fleet.
BAE Systems has a long-term earnings growth rate of 13.4%. The Zacks Consensus Estimate for BAESY’s 2025 sales indicates year-over-year growth of 62.6%.
Northrop Grumman Corporation (NOC - Free Report) : It is a renowned provider of missile launch systems for naval submarines. The company manufactures Launcher Subsystem hardware to support the Columbia and Dreadnought common missile compartment program.
Northrop has a long-term earnings growth rate of 3.3%. The Zacks Consensus Estimate for NOC’s 2025 sales indicates year-over-year growth of 2.8%.
GD Stock’s Price Movement
Shares of GD have gained 6.5% in the past month compared with the industry’s 2% growth.
Image Source: Zacks Investment Research
GD’s Zacks Rank
GD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.