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Key Points
- The White House Maritime Action Plan could unlock hundreds of billions in funding aimed at restoring U.S. shipbuilding capacity.
- Defense contractors like Huntington Ingalls and General Dynamics are positioned to win large naval contracts tied to submarines and destroyers.
- BAE Systems offers international diversification, benefiting from rising European defense spending alongside potential U.S. shipbuilding demand.
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When President Trump signed an executive order calling for the restoration of America's maritime dominance, it set off a chain of events that should have caused investors to pay attention. The executive order has many layers, but the highlight is titled America’s Maritime Action Plan (MAP), a sweeping blueprint to rebuild domestic shipbuilding through hundreds of billions in federal financing.
Before this gets dismissed as frivolous spending, there are some hard truths to consider. First, less than 1% of new commercial ships are currently built in the United States. Second, China has aggressively dominated global shipbuilding for years. The MAP is Washington's answer to that imbalance.
But the MAP isn't the only money on the table. The Pentagon's proposed fiscal year 2026 (FY2026) budget and a separate reconciliation package together earmark tens of billions specifically for naval shipbuilding. This includes new Virginia-class submarines and guided missile destroyers. The MAP and the defense budget are separate programs, but they're pulling in the same direction.
For investors, that creates an interesting setup. A handful of defense contractors sit squarely in the crosshairs of this spending wave. Some are pure-play military shipbuilders. Others bring a mix of defense and commercial exposure. And at least one adds a European defense tailwind on top of any U.S. upside.
Below, we break down three aerospace and defense stocks that stand to benefit, and what investors need to know before adding any of them to a portfolio.
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The Pure-Play Leader in U.S. Naval Shipbuilding
Huntington Ingalls (NYSE: HII) stands to be one of the clearest beneficiaries of new maritime spending. The company is the nation’s largest military shipbuilder. Prior to this announcement, Huntington Ingalls was already forecasting expectations to secure up to $50 billion in new government contracts over the next 24 months.
In its most recent earnings report, Huntington Ingalls reported full-year revenue of $12.5 billion, which was 8.2% higher year-over-year (YOY). Included in that was a 14% YOY increase in shipbuilding throughput, which is expected to increase to 15% in 2026.
But HII stock trimmed its 2026 gains after the report on some short-term margin concerns. Analysts expressed concern that next year’s earnings might not support the stock’s price after its surge of over 100% in the past 12 months.
The Trump administration’s MAP ambitions must have been an open secret to institutional investors.
HII stock saw a surge in institutional investment in the fourth quarter of 2025, which corresponded with a surge in stock price starting in December 2025.
That said, Huntington Ingalls' stock trades slightly above its consensus price target as of mid-March. However, since the start of the year, analysts have been raising their targets, with the highest price being from Citigroup, which raised its target to $465 from $450 on Feb. 12.
A Combination of Shipbuilding Strength and Dividend Growth
If Huntington Ingalls is the primary beneficiary, then General Dynamics (NYSE: GD) would be a close second. The company is involved in shipbuilding through its Bath Iron Works and Electric Boat divisions.
GD stock is only up over 30% in the last 12 months, but gained about 4% after the plans for MAP funding were announced. That came on the heels of the company’s January earnings report in which General Dynamics delivered a double beat.
Revenue was up 10.1% YOY, and earnings were up 13.4% on a YOY basis.
GD stock also trades slightly below its consensus price target. However, as with HII stock, analysts have been raising their price targets. Susquehanna has the highest price target for the stock at $420.
General Dynamics plays to income and growth investors. The company is a dividend aristocrat that recently increased its dividend for the 34th consecutive year. That raised the attractive annual payout per share to $6.36.
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A Choice for Global Defense and Maritime Exposure
BAE Systems (OTCMKTS: BAESY) is headquartered in London, which may limit its exposure to MAP funding. However, it does have a U.S. subsidiary focused on shipbuilding. If the U.S. fleet upgrade becomes a full-court press, there could be room for BAE Systems to capture some of those dollars.
That would be in addition to the boost the company is getting from increased spending in European countries. The company is the largest defense contractor in Europe with a maritime segment that represents over 22% of its 2024 revenue, which was up 10% on a YOY basis.
BAESY stock is up more than 40% in the last 12 months and is up more than 30% in 2026, with strong growth in the last three months. That’s pushed the stock near its 52-week high. However, analysts still rate the stock a consensus Buy.
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