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General Dynamics Wins $642M Deal to Support Virginia Class Submarines

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Key Takeaways

  • General Dynamics won a $642M deal for design and support of Virginia-class submarines.
  • GD's Electric Boat unit leads all U.S. Navy nuclear-powered submarine programs, including the Virginia-class.
  • GD's advanced submarine capabilities drive consistent contract wins.

General Dynamics Corp. (GD - Free Report) business unit, Electric Boat, has secured a modification to a previously awarded contract, a $642 million deal for Lead Yard Support and Development Studies and Design efforts related to Virginia-class submarines. 

The deal was offered by the Naval Sea Systems Command, Washington, D.C. The majority of the work related to this deal will be executed in Groton, CT, and is anticipated to be completed by April 2026.

GD’s Involvement in Virginia-Class Submarine Program

General Dynamics’ Electric Boat division serves as the primary contractor and lead shipyard for all U.S. Navy nuclear-powered submarine programs. This division oversees the entire design and engineering process, as well as the construction of Virginia-class attack submarines. It also manages the Virginia-class’ combat systems and weapon launchers.

Virginia-class fast attack submarines are among the world’s most advanced. They are engineered from the keel up to handle the full spectrum of 21st-century missions, including anti-submarine and surface warfare, as well as support for special operations.

Such sophisticated features must have driven significant demand for the company's Virginia-class submarines, as reflected in recent contract wins.

Growth Potential

The Rising demand for advanced submarine technologies such as stealth, underwater monitoring and long-range strike capabilities, along with the increasing complexity of modern naval warfare, is driving growth in the submarine market.

This has likely led Mordor Intelligence to project a CAGR of 4.17% for the submarine market during the 2025-2030 period. Such strong growth trends indicate ample opportunities for GD, a prominent contractor in the submarine market.

Considering the solid growth opportunities of the submarine market, other defense primes like BAE Systems plc (BAESY - Free Report) , Northrop Grumman Corporation (NOC - Free Report) and Huntington Ingalls Industries (HII - Free Report) , with a strong presence in this space, should also benefit.

BAE Systems has been a trusted supplier to the U.S. Navy’s undersea fleet for over 30 years. The company is building the Dreadnought-class submarine to uphold the United Kingdom’s continuous at-sea nuclear deterrent.

BAESY boasts a long-term (three to five years) earnings growth rate of 14.5%. The Zacks Consensus Estimate for 2025 sales stands at $40.80 billion, which calls for an increase of 63.4%.

Northrop Grumman is a leading supplier of missile launch systems for naval submarines. The company continues manufacturing Launcher Subsystem hardware to support the Columbia and Dreadnought common missile compartment programs.

NOC boasts a long-term earnings growth rate of 3.9%. The Zacks Consensus Estimate for 2025 sales stands at $42.15 billion, which calls for an increase of 2.7%.

Huntington Ingalls delivers global fleet support for submarines, including modernization, repairs and installation services. Its Newport News Shipbuilding division designs and constructs nuclear-powered submarines for the U.S. Navy.

HII has a long-term earnings growth rate of 11.9%. The Zacks Consensus Estimate for 2025 sales stands at $11.97 billion, which calls for an increase of 3.7%.

GD Stock’s Price Movement

In the past three months, shares of General Dynamics have risen 13.3% compared with the industry’s 10.4% growth.

Zacks Investment Research
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GD’s Zacks Rank

General Dynamics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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