Why Are Huntington Ingalls Shares Jumping? Navy Contract Drives Gains

Huntington Ingalls Industries, Inc. (HII) shares are trading significantly higher in premarket trading on Tuesday, December 23, 2025, continuing the momentum from Friday’s announcement that the U.S. Navy selected the company to design and build a new class of small warships.

The stock opened at $370.29 in premarket trading at 7:24 AM EST, up $16.77 or 4.74% from Monday’s close of $353.52. This follows Monday’s impressive 5.01% gain after the Navy’s contract announcement and President Trump’s unveiling of plans for new “Trump-class” battleships.

U.S. Navy Selects Huntington Ingalls for New Frigate Program

Secretary of the Navy John Phelan announced Friday that the military branch will acquire a new frigate class based on HII’s Legend-Class National Security Cutter design. The new FF(X) “small surface combatant” ship received approval from President Donald Trump and Defense Secretary Pete Hegseth as part of their effort to build what officials are calling a “Golden Fleet.” While the Navy and HII did not disclose the contract’s dollar amount, the announcement has sent the stock soaring to fresh record highs.

HII CEO Chris Kastner expressed confidence in the company’s Ingalls Shipbuilding division to execute the program. The stock has now gained 87.1% year-to-date, significantly outperforming the S&P 500’s 16.95% return over the same period.

This marks another milestone for the Virginia-based shipbuilder, which previously scored its biggest one-day percentage gain ever on March 5, 2025, when Trump announced efforts to boost domestic shipbuilders.

The company’s market capitalization now stands at $13.87 billion, with a trailing P/E ratio of 24.38. Analysts have responded positively to the news, with Citigroup recently initiating coverage with a “Buy” rating and a price target of $376. The average analyst price target sits at $344, suggesting the stock’s recent surge may have pushed it ahead of consensus expectations, though the high price target reaches $384.

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Trump Administration Signals Expanded Shipbuilding Push

President Trump announced Monday afternoon in Palm Beach, Florida, alongside Defense Secretary Pete Hegseth and other officials, that he had approved plans for the Navy to construct new “Trump-class” warships.

These large vessels, which Trump called “battleships,” would weigh 30,000 to 40,000 tons and could be equipped with nuclear cruise missiles, hypersonic weapons, electric rail guns, and laser technology. The ships will be constructed with steel rather than aluminum and are designed to be more powerful than their predecessors.

Trump emphasized that the initiative aligns with his “peace through strength” philosophy and would create jobs while reviving America’s shipbuilding capabilities. He also announced plans to meet with prime defense contractors in Florida next week to discuss production schedules, criticizing them for being “too slow” on production. The president indicated he would discuss spending plans, executive compensation, and investor payouts, encouraging contractors to build new plants.

According to a Wall Street Journal report, the Navy will launch a competition to select a vendor for the new large warships, which are separate from the small warship class announced Friday. The “battleship” designation refers to an upgrade to the Arleigh Burke-class destroyers.

With HII’s Ingalls Shipbuilding division having secured the frigate contract, the company is well-positioned to compete for additional contracts as the Navy expands its fleet under the new administration’s ambitious shipbuilding agenda.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.