President Donald Trump has ordered nuclear submarines to reposition near Russian waters after a fiery exchange with former Russian President Dmitry Medvedev. Trump called Medvedev’s remarks “very foolish” and warned that the Russian official was “entering very dangerous territory.” He added that his administration would not sit back if threats escalated. “Words are very important and can often lead to unintended consequences,” Trump posted. “I hope this will not be one of those instances.”
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That hope came with action. Submarines are already moving into what Trump called “the appropriate regions.” And now, investors are turning sharply toward the two U.S. shipbuilders responsible for building and maintaining America’s underwater nuclear arsenal: General Dynamics (GD) and Huntington Ingalls Industries (HII).
Submarine Builder Stocks Rally as Market Bets on Bigger Orders
Huntington Ingalls moved higher in Monday’s pre-market as traders began pricing in potential expansion to submarine programs. If this turns into a longer-term military posture, contracts are likely to follow. Submarine builders profit at every stage of the process. They earn from maintenance contracts, material procurement, and new boat orders, not just from launching a vessel.
General Dynamics’ Electric Boat division makes both the Virginia-class and Columbia-class submarines, which are the backbone of the Navy’s strategic deterrence. Huntington Ingalls shares production duties and handles overhaul work. These companies don’t just deliver submarines. They build them from the ground up, supply the nuclear fuel, handle upgrades, and manage all ongoing maintenance. Once a submarine enters service, they stay on the job for decades.
Even a small uptick in deployment can unlock years of future revenue. The government pays these contractors not just for vessels, but for staffing, supply chains, tech upgrades, and long-term support. In a rising threat environment, those line items grow fast.
Geopolitical Flashpoint Ignites Pentagon Momentum
Huntington Ingalls already raised its guidance last quarter, citing momentum in its submarine program. Its shipbuilding division jumped 12% year-over-year, driven by progress in submarine delivery schedules., and Navy officials have publicly praised its performance. That was before the Kremlin spat. With Trump now turning up the pressure, Wall Street is starting to see those earnings as the start of a bigger trend.
If this sub deployment holds, or even expands, the Pentagon will need more budget flexibility. That means early procurement funding, backlog acceleration, and program renewals. This is exactly the kind of activity that puts shipbuilders into overdrive.
Politics Align for Defense Spending Surge
Trump’s public comments have changed the mood in Washington. Republicans will back bigger defense budgets, especially with Trump leading the charge. Democrats, already facing pressure on national security issues, will find it hard to oppose submarine funding during an election cycle.
That rare bipartisan opening almost always benefits the defense sector. With both sides bracing for foreign policy to dominate headlines, defense primes like General Dynamics and Huntington Ingalls are perfectly positioned. They don’t just benefit from contracts. They thrive when Congress has a reason to say yes.
Traders Now Expect Multi-Year Upside
One must remember that with Defense stocks, it isn’t a one-day story. Defense stocks tend to rally slowly, but when military posture shifts and programs grow, they run for months or even years. General Dynamics and Huntington Ingalls are among the few pure-play bets on nuclear submarine spending. They already had momentum, and now they have a geopolitical tailwind behind them.
Investors can compare how General Dynamics and Huntington Ingalls stack up side-by-side based on various metrics using the TipRanks Stocks Comparison Tool. Click on the image below to find out more.
