We recently published a list of Why These Defense Stocks Are Gaining This Week. In this article, we will take a look at where Huntington Ingalls Industries, Inc. (NYSE:HII) stands against other defense stocks gaining this week.
According to The International Institute for Strategic Studies (IISS), global defense spending soared to a record high of $2.46 trillion in 2024, amid major budget increases in Asia, Europe, the Middle East, and North Africa due to deteriorating security environments and threat perceptions. Easing inflation in different parts of the world also allowed countries to invest in and bolster national defense.
The world has been rocked with deadly conflicts over the last few years, with Ukraine and the Middle East being the most affected regions. While the human impact of these wars has been tragic, the defense industry has profited by luring investors into piling up their stocks, with several of the world’s top contractors seeing their shares book all-time highs in 2024.
Defense stocks across the world are continuing to witness an unprecedented bull run as European capitals unlock billions to supercharge their militaries. Stocks in Europe have rallied this year, with several companies in the sector registering double-digit returns. Asian contractors in South Korea and India are also benefiting from the splurge.
In contrast, American defense stocks have been subdued this year and have failed to capitalize on the global rally due to concerns about budget cuts under the new administration. Last month, President Trump hinted at significantly reducing future military spending if things settle down with China and Russia. The creation of DOGE has also reshaped investors’ views of the industry.
Despite a shaky start to 2025, analysts at UBS are optimistic about the sector as they believe the downside is shrinking. Here is what the firm recently stated:
“Consensus estimates have moved higher since the election despite the 40% sell-off. The downside potential seems increasingly smaller. We believe that the current environment is markedly different from Sequestration and do not believe a similar outcome is likely.”
Citi analyst Jason Gursky, in a note to clients on March 5, also urged investors about this being the right time to buy American defense stocks. While the analyst acknowledged the world may be heading toward a multi-polar order, he argued that it was no less dangerous to decrease the need for tools of deterrence.
Two recent developments are reinvigorating investor interest in US defense stocks. Trump has unveiled a new next-generation fighter jet, the F-47, to replace the F-22 Raptor. He has also announced to resurrect America’s military and commercial shipbuilding industry, which he sees as vital to national security, given the strategic competition with China.
With that said, let’s now head over to the list of defense stocks that are gaining this week. Please note that the stocks listed are based on one week’s performance. Our analysis does not reflect the prospects of the company. Their share price could go high or low in the future, depending on the external market conditions, industry-specific challenges, and the company’s capabilities. Additional research and caution are advised before making investment decisions.
Why Huntington Ingalls Industries, Inc. (HII) Is Gaining This Week?
A towering military warship off the shore, its hull representing the companies commitment to the defense sector.
Methodology
For this article, we went through screeners to see how stocks in the aerospace and defense industry performed over the past week (March 24-28). From there, we picked the top 10 defense stocks with the highest percentage gains in share price during this period. All data is as of the close of business on Friday, March 28, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Huntington Ingalls Industries, Inc. (NYSE:HII) is an American defense company with expertise in shipbuilding. The stock has surged 17% in March after Trump announced plans to resurrect the shipbuilding sector.
The stock has continued its rally this week, with returns of 1.91%. On March 25, Huntington Ingalls Industries, Inc. (NYSE:HII)’s Mission Technologies division was awarded a contract to build an open architecture High-Energy Laser (HEL) weapon system for the Army’s Rapid Capabilities and Critical Technologies Office (RCCTO). The company will develop and test a prototype of unmanned aircraft systems used in multi-domain operations.
During the week, Huntington Ingalls Industries, Inc. (NYSE:HII) also launched the USS Jeremiah Denton (DDG 129), the third Flight III Arleigh Burke-class destroyer for the US Navy.
Overall, HII ranks 5th among the defense stocks that are gaining this week. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HII but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
