“Jim Cramer’s recent endorsement of Huntington Ingalls Industries (HII) as ‘the best thing we have when it comes to the Navy’ underscores the company’s dominant position in U.S. naval shipbuilding. Amid rising geopolitical tensions and increased defense spending, HII benefits from a massive backlog, key contracts for aircraft carriers, submarines, and surface combatants, and a track record of reliable execution. The stock has delivered strong gains over the past year, trading near record levels despite recent volatility, with analysts optimistic about sustained growth driven by Navy priorities.”
Huntington Ingalls: The Cornerstone of America’s Naval Strength
Jim Cramer, the longtime market commentator, recently fielded a question from a viewer about Huntington Ingalls Industries during one of his segments. His response was unequivocal: Huntington Ingalls has been a solid buy for a long time, reasonably valued, and positioned to stay strong because, as he put it, it is the best thing we have when it comes to the Navy. This statement captures the essence of why investors continue to gravitate toward HII in an environment where naval modernization is a top national security priority.
Huntington Ingalls Industries stands as America’s largest military shipbuilder, exclusively focused on the U.S. Navy and Coast Guard needs. Through its Ingalls Shipbuilding division in Mississippi, the company constructs non-nuclear vessels like amphibious assault ships, destroyers, and national security cutters. Its Newport News Shipbuilding facility in Virginia handles the complex work on nuclear-powered aircraft carriers and submarines, including refueling, overhauls, and inactivation. The Mission Technologies segment adds capabilities in C5ISR (command, control, communications, computers, cyber, intelligence, surveillance, and reconnaissance), artificial intelligence applications for battlefield decisions, electronic warfare, uncrewed systems, and nuclear operations support.
The company’s strategic importance cannot be overstated. The U.S. Navy faces persistent challenges in fleet size and readiness, with demands for more submarines to counter undersea threats, additional carriers for power projection, and modern surface combatants to maintain sea control. Huntington Ingalls is deeply embedded in these programs. It is the sole builder of Ford-class aircraft carriers and one of the primary contractors for Virginia-class submarines, alongside General Dynamics Electric Boat. Recent developments highlight this entrenchment.
In late 2025, Ingalls Shipbuilding secured the contract to design and build the Navy’s future small surface combatant (SSC), adapting the proven Legend-class national security cutter design. This award provides a pathway for serial production of a new class of ships, promising steady, long-term revenue with lower execution risk due to the mature baseline design. Earlier contracts include advance procurement for the next amphibious assault ship (LHA 9) and ongoing work on multiple amphibious warships totaling billions in value.
The company’s backlog reflects this strength. Huntington Ingalls consistently reports a record or near-record funded backlog, often exceeding $40-50 billion, providing multi-year visibility into revenues. In recent quarters, the firm has raised its medium-term shipbuilding growth target to around 6%, supported by record revenues and expanding demand from the Department of Defense. Analysts have responded positively, with upgrades and price target increases citing the surge in Navy spending and improved sector outlook.
Financially, HII has shown resilience. Recent earnings demonstrated revenue growth in the mid-teens year-over-year in some periods, with segment margins holding steady or improving as production snags from prior years eased. The company has initiated forward guidance emphasizing continued expansion, even as it navigates occasional headwinds like negative free cash flow in certain quarters due to timing of investments and contract milestones. Despite these, the overall trajectory points to sustained profitability and cash generation over the long term.
Key Performance Metrics (as of late February 2026)
Current stock price: Approximately $440 (recent trading range $430-$442, with intraday highs near $449)
52-week range: $167.70 – $451.86
Market capitalization: Around $17 billion
P/E ratio: Approximately 28x
Dividend yield: Around 1.2%
One-year performance: Up significantly, with gains exceeding 140% in some trailing periods, reflecting strong momentum in defense stocks tied to naval priorities
The stock has experienced volatility, including a recent pullback of over 2% in a single session, but it remains near all-time highs achieved following major contract wins. Institutional interest appears robust, particularly after catalysts like the SSC award, which sparked volume surges and upward price movement.
Why Cramer’s View Resonates Now
Cramer’s comment aligns with broader market recognition of HII’s moat. Unlike diversified defense primes, Huntington Ingalls is a pure-play naval shipbuilder with limited direct competition in its core programs. This specialization, combined with the Navy’s urgent need to recapitalize the fleet amid strategic competition in the Indo-Pacific and elsewhere, positions the company for durable demand. Bipartisan pressure on the Navy to finalize large submarine contracts further underscores the industrial base’s criticality, benefiting key players like HII.
Innovation efforts add to the upside. Partnerships to integrate AI welding technologies aim to boost efficiency and reduce costs in ship construction, potentially improving margins over time. These advancements complement traditional strengths in nuclear expertise and large-scale integration.
For investors focused on defense and aerospace, Huntington Ingalls represents a compelling way to gain exposure to U.S. naval priorities. Cramer’s endorsement reinforces what many in the market already see: in an era of heightened maritime challenges, HII is indispensable.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial recommendations, or endorsements. Stock prices fluctuate, and past performance is no guarantee of future results. Investors should conduct their own research and consult professionals before making decisions.
