Huntington Ingalls Industries HII is positioned to benefit from growing cooperation among the United States, the United Kingdom and Australia to strengthen undersea defense capabilities. The AUKUS partnership is creating opportunities for submarine design, engineering, technology development and supply-chain cooperation among the three nations.
HII’s Newport News Shipbuilding division plays an important role in these efforts, drawing on its experience in designing and building nuclear-powered submarines. On Oct. 13, 2026, the company announced a $56 million U.S. Navy contract for shipbuilding engineering and design support for AUKUS. An option could increase the contract’s cumulative value to $91 million.
The work includes technology integration, engineering, supply-chain development, workforce support and digital transformation. HII engineers and designers will also contribute to the design of the SSN-AUKUS nuclear-powered submarine, which is planned for construction in the United Kingdom and Australia.
Beyond this contract, HII is supporting the development of an allied submarine industrial base. Its Mission Technologies division helps Australian suppliers qualify to participate in the U.S. submarine supply chain, creating opportunities for broader industrial cooperation.
The AUKUS partnership could provide long-term work across submarine design, production support and supplier development. HII’s nuclear shipbuilding expertise and involvement across multiple parts of the initiative position it to benefit as the participating countries advance their submarine capabilities. Execution, workforce availability and supply-chain readiness will remain key to translating these opportunities into sustained growth.
Defense Stocks to Keep on the Radar
Growing investment in nuclear-powered submarines and allied naval capabilities could also benefit other defense contractors.
General Dynamics GD: General Dynamics’ Electric Boat business builds Virginia-class and Columbia-class submarines for the U.S. Navy, supporting demand for nuclear submarine construction and related engineering.
BAE Systems BAESY: BAE Systems is a major supplier to the U.K. defense sector and is developing advanced submarine capabilities, positioning it to participate in the United Kingdom’s broader naval modernization efforts.
The Zacks Rundown for HII
Shares of HII have lost 4.5% in the past year compared with the industry’s 17.9% decline.
Image Source: Zacks Investment Research
The company's shares are trading at a discount on a relative basis, with its forward 12-month Price/Sales being 0.75X compared with its industry’s average of 2.11X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HII’s 2026 and 2027 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
HII stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report
General Dynamics Corporation (GD): Free Stock Analysis Report
Bae Systems PLC (BAESY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).