General Dynamics Secures a $988M Deal to Modernize C5ISR Networks

General Dynamics’ GD business unit, General Dynamics Information Technology, recently secured a $988 million contract to support the modernization of the U.S. Navy’s Ship and Air Command, Control, Communications, Computers, Combat, Intelligence, Surveillance and Reconnaissance (C5ISR) systems.

A Brief Note on GDIT’s New Contract

Per the terms of the contract, GDIT will modernize and integrate advanced C5ISR systems to improve the operational readiness and effectiveness of U.S. naval forces. The company will deliver end-to-end support services, including systems integration, engineering, procurement, logistics and installation.

These services will be provided across all classes of surface combatant ships, such as guided missile vessels and aircraft carriers, as well as Coast Guard ships, manned and unmanned aircraft and shore-based facilities. The upgrades are designed to help the Navy maintain current platforms, ensure mission continuity and improve overall fleet performance without disrupting ongoing operations.

Growth Prospects for General Dynamics

According to a report from the Mordor Intelligence firm, rising global security concerns and the increasing complexity of modern warfare are driving strong demand for advanced C5ISR capabilities. Militaries worldwide are prioritizing integrated, network-centric systems that improve situational awareness, decision-making speed and operational coordination across domains. Mordor Intelligence also forecasts that the global C5ISR market will witness a compound annual growth rate of 12.2% during the 2026-2031 period.

Such strong growth projections indicate solid opportunities for General Dynamics. General Dynamics Information Technology’s deep expertise in systems integration, cybersecurity and mission-critical technologies positions the company well to benefit from sustained defense modernization efforts, particularly within the U.S. Navy and allied forces. The recent contract is an example of that.

Opportunities for Other Defense Stocks

Other defense companies that are likely to enjoy the perks of the expanding C5ISR market have been discussed below.

BAE Systems BAESY: The company provides expert systems engineering, integration and sustainment services for C5ISR systems, as well as enterprise information technology, to improve mission effectiveness. The company's technologies are used in the Army, Navy and federal civilian agency systems and networks in the land, air, sea and cyber domains.

BAE Systems boasts a long-term (three to five years) earnings growth rate of 14.6%. The Zacks Consensus Estimate for BAESY’s 2026 sales implies an improvement of 54.9% from the previous year’s level.

Kratos Defense & Security Solutions, Inc. KTOS: The company has more than 50 years of expertise in supplying extremely complex solutions for C5ISR applications. Kratos is a leading provider in the packaging and integration of electronics and other sensitive C5ISR equipment.

Kratos delivered an average earnings surprise of 29.17% in the last four quarters. The Zacks Consensus Estimate for KTOS’ 2026 sales implies an improvement of 19.9% from the previous year’s level.

Airbus Group EADSY: The company offers the most comprehensive C5ISR portfolio and accompanying services. Its solutions provide a complete situational awareness picture across various domains, assisting decision-makers at the strategic, operational and tactical levels across land, air, sea, joint and intelligence domains.

EADSY boasts a long-term earnings growth rate of 21.3%. The Zacks Consensus Estimate for Airbus’ 2026 sales implies an improvement of 11.6% from the previous year’s level.

GD Stock’s Price Movement

Shares of GD have gained 22.9% in the past six months compared with the industry’s 12.8% growth.

GD’s Zacks Rank

GD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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