General Dynamics Corporation (GD): A Bull Case Theory

We came across a bullish thesis on General Dynamics Corporation on Stay Invested’s Substack by Denis Gorbunov. In this article, we will summarize the bulls’ thesis on GD. General Dynamics Corporation's share was trading at $313.76 as of August 5^th. GD’s trailing and forward P/E were 21.07 and 20.70 respectively according to Yahoo Finance.

General Dynamics (GD), one of the largest U.S. defense contractors, operates through four major segments: Aerospace, Combat Systems, Marine Systems, and IT & Mission Systems. Its Gulfstream business jets dominate the private, corporate, and government markets, while its Combat Systems division provides tanks, armored vehicles, and advanced weapons systems. Marine Systems builds submarines and surface ships, and the IT & Mission Systems unit delivers secure communications, cybersecurity, and IT services to critical defense agencies, including the Department of Defense. With over 110,000 employees worldwide, GD is deeply embedded in national security infrastructure, making it a strategically vital player.

Financially, the company remains strong, posting 11.8% revenue growth over the last four quarters, generating $4.1 billion in free cash flow, and holding long-term debt of $7.3 billion. Its most recent quarterly earnings of $1 billion, reported on July 23, exceeded expectations and drove the stock higher. The shares have been in an intermediate-term correction since November 2024, but technical signals suggest a potential breakout. Investors are watching for the stock to sustain a move above $318 for a couple of weeks, which could mark the start of the next upward leg.

With solid fundamentals, strong cash generation, and a leading position in mission-critical defense and aerospace markets, GD offers both stability and growth. The combination of a positive earnings surprise, an improving technical setup, and its role as an indispensable defense contractor creates a compelling entry point for long-term investors seeking exposure to a resilient and strategically important industry.

Previously we covered a bullish thesis on General Dynamics Corporation (GD) by jagger in September 2024, which highlighted Gulfstream’s strength, a solid defense backlog, and disciplined capital allocation. The company’s stock price has appreciated approximately by 3.75% since our coverage. This is because the thesis played out with continued defense demand. The thesis still stands as structural drivers remain intact. Denis Gorbunov shares a similar view but emphasizes recent earnings and breakout potential.

General Dynamics Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held GD at the end of the first quarter which was 46 in the previous quarter. While we acknowledge the potential of GD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.