US Navy's New Battleship Costs Exceed Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 18 2026
0mins
Source: Fool
- Battleship Cost Analysis: The first USS Defiant battleship is projected to cost $17 billion, significantly higher than initial estimates of $9 billion and $14 billion, indicating pressure on defense budgets.
- Budget Allocation: The Department of Defense's fiscal year 2027 budget requests $1 billion for long-lead equipment for the first ship, with an additional $2.5 billion for the second and third ships, highlighting the substantial funding requirements of the project.
- Total Spending Estimates: Building 15 Defiant-class battleships may exceed $200 billion, and while initial costs are high, the average cost is expected to decrease as more ships are built, reflecting long-term investment potential.
- Investment Opportunities: General Dynamics and Huntington Ingalls, the primary contractors, face significant revenue opportunities, and while maintenance and upgrade costs may surpass initial purchase costs, effective budget management could ensure congressional support for the project.
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Analyst Views on GD
Wall Street analysts forecast GD stock price to rise
15 Analyst Rating
7 Buy
8 Hold
0 Sell
Moderate Buy
Current: 348.960
Low
360.00
Averages
386.85
High
410.00
Current: 348.960
Low
360.00
Averages
386.85
High
410.00
About GD
General Dynamics Corporation is a global aerospace and defense company. It offers a portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions, and technology products and services. Its segments include Aerospace, Marine Systems, Combat Systems and Technologies. The Aerospace segment produces business jets and is the standard bearer in new technology aircraft, aircraft repair, customer support and custom completion services. The Marine Systems segment designs and builds nuclear-powered submarines and is engaged in surface combatant and auxiliary ship design and construction for the U.S. Navy. The Combat Systems segment manufactures land combat solutions worldwide, including wheeled and tracked combat vehicles, weapons systems and munitions. The Technologies segment provides a full spectrum of services, technologies and products to a range of military, intelligence, federal civilian and state customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Funding Allocation: At the time of the award, $16.6 million (FY25 procurement funds) and $1.7 million (FY26 O&M funds) were obligated, demonstrating government commitment and financial backing for the project.
- Location of Work: The work will be performed in Scottsdale, Arizona, highlighting the company's operational capabilities in the region and its contribution to the local economy.
See More
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- Defense Spending Requirements: Hegseth stated that the U.S. demands allies to increase defense spending to 3.5% of GDP, promising to prioritize cooperation with these 'model allies' to expedite arms sales and enhance intelligence sharing, thereby strengthening collective defense capabilities.
- Warning to China: He warned China against disrupting the status quo, asserting that concerns over China's military buildup in the Asia-Pacific are 'rightful' and reaffirming America's longstanding position in the region, emphasizing that the U.S. is a Pacific nation.
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- Platform Integration: GDIT has incorporated CLEAR1 into its hybrid multi-cloud products and tools program supporting the Centers for Medicare and Medicaid Services, ensuring efficient and secure identity access in complex mission environments while reducing identity-driven fraud.
- Enhanced User Experience: This collaboration not only strengthens CLEAR's position as a trusted partner to government agencies but also improves user experience by enabling agencies to operate smarter with modern identity tools that provide seamless service delivery.
- Market Impact Expansion: With over 41 million members on CLEAR's identity platform and GDIT's extensive service network, this partnership is expected to further enhance the security and seamlessness of digital identity solutions, bolstering government agencies' confidence and security in delivering critical services.
See More
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- Strategic Collaboration: CLEAR and GDIT have entered into a strategic collaboration agreement to deliver secure digital identity management and verification solutions for federal health and civilian agencies, enhancing secure access for civilians, providers, and employees by integrating GDIT's expertise with the CLEAR1 platform.
- Technological Integration: GDIT has incorporated CLEAR1 into its hybrid multi-cloud products and tools program supporting the Centers for Medicare and Medicaid Services, ensuring efficient identity management in complex mission environments while reducing identity-driven fraud and abuse.
- Enhanced User Experience: CLEAR's CEO Caryn Seidman Becker stated that this collaboration will strengthen the protection of sensitive information and provide more reliable access, helping agencies better serve patients and public servants while improving user experience.
- Market Potential: With over 41 million members, CLEAR's partnership with GDIT leverages deep industry expertise to drive more secure and seamless digital identity solutions, further expanding market share and enhancing customer trust.
See More
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- Rare Earth Supply Chain Risk: Each drone relies on rare earth magnets, with approximately 98% of production controlled by China, posing a potential supply chain crisis that could impact U.S. defense capabilities.
- Strategic Position of REalloys: REalloys holds the only non-Chinese 'mine-to-magnet' heavy rare earth supply chain in North America, ensuring no reliance on Chinese inputs at any stage, and is expected to become the largest Western producer of heavy rare earths by 2027 to meet defense needs.
- Defense Budget Support: The 2026 defense budget allocates $13.6 billion for autonomous systems, reflecting the U.S. government's commitment to drones and related technologies; however, resolving the rare earth supply chain issue will require time and technological development, with REalloys positioned at a critical juncture in this transition.
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