Is Huntington Ingalls Industries (HII) Among the Best Mid Cap Defense Stocks to Buy According to Analysts?

We recently published a list of the 10 Best Mid Cap Defense Stocks to Buy According to Analysts. In this article, we will take a look at where Huntington Ingalls Industries, Inc. (NYSE:HII) stands against other best mid cap defense stocks.

Defense stocks have surged over the past week after President Trump unveiled plans for a $1 trillion defense budget for fiscal 2026, representing a 12% increase from the current year. Here is what he told reporters on April 7:

“Nobody’s seen anything like it. We have to build our military and we’re very cost-conscious, but the military is something that we have to build. And we have to be strong because you’ve got a lot of bad forces out there now. So we’re going to be approving a budget and I’m proud to say actually, the biggest one we’ve ever done for the military.”

READ ALSO: 10 Best Performing Defense Stocks So Far in 2025 and 10 Best Large Cap Defense Stocks to Buy Now.

This is an encouraging development for America’s defense sector, which had a subdued start to the year due to uncertainty around budget cuts. The creation of DOGE had also reshaped investors’ views of the industry.

Stocks got another boost last week after market chatter that tariff negotiations to address trade imbalances could include commitments from foreign countries to buy weapons from the US. On April 7, Vietnam’s prime minister issued a statement, asking for a 45-day delay in the imposition of tariffs and stating his country would buy more American goods, including arms, to tackle the trade gap.

Defense stocks have soared in Europe this year, as regional capitals unlocked billions to supercharge their militaries. While a steep selloff in response to the tariffs sparked a major plunge in shares last week, this has been a year to remember for several European defense companies that have seen double-digit returns so far in 2025.

Analysts at Citi believe defense stocks are poised for outperformance due to minimal tariff exposure, increased military budgets, and rising geopolitical tensions. Jason Gursky stated the following in a detailed preview to clients on April 10:

“We materially change the rank order of our stock picks, moving our defense coverage to the top of the list given our positive view on the outlook for global defense spending.”

Investors are also buoyed by the unveiling of a new next-generation fighter jet, the F-47, to replace the F-22 Raptor. President Trump has also announced that he will resurrect America’s military and commercial shipbuilding industry, which he sees as vital to national security, given the strategic competition with China.

Methodology

For this article, we sifted through screeners to identify mid-cap stocks in the aerospace and defense industry. These stocks have a market cap between $2 billion and $10 billion. From there, we picked the top 10 defense stocks with the highest positive share price upside potential. All data is as of the close of business on Friday, April 11, 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Huntington Ingalls Industries, Inc. (NYSE:HII)

Market Cap: $8.47 billion

Share Price Upside Potential: 7.12%

Huntington Ingalls Industries, Inc. (NYSE:HII) is an American all-domain defense provider, with expertise in shipbuilding, unmanned systems, cyber, ISR, and synthetic training. It is the country’s sole builder of aircraft carriers and a major contractor for most nuclear submarines. With a share price upside potential of 7.12%, it is one of the best mid cap stocks to buy.

The stock surged 17% during the week of April 7 in response to President Trump signing an executive order to revive American shipbuilding, aimed at reducing China’s grip on the industry. On Friday, Goldman Sachs upgraded Huntington Ingalls Industries, Inc. (NYSE:HII) from Sell to Buy, and also raised its price target for the stock to $234 from $145.

Another positive during the week was Huntington Ingalls Industries, Inc. (NYSE:HII)’s delivery of the initial two Lionfish small uncrewed undersea vehicles to the Navy under a multi-year program, which could scale to 200 vehicles, with a contract value of $347 million. Late last month, the company also launched the USS Jeremiah Denton (DDG 129), the third Flight III Arleigh Burke-class destroyer for the US Navy.

Huntington Ingalls Industries, Inc. (NYSE:HII) recently signed a memorandum of understanding with HD Hyundai Heavy Industries to collaborate on accelerating ship production for defense and commercial projects. The strategic agreement reflects HII’s commitment to expand shipbuilding capacity in support of national security.

Overall, HII ranks 10th among the 10 best mid cap defense stocks to buy according to analysts. While we acknowledge the potential of defense companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than HII but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.