$HII (Huntington Ingalls Industries): The Simple Bet on Taiwan Tensions

Positioned to Compound Through Persistent Taiwan Strait Tensions and Multi-Decade Fleet Expansion

HII is America’s largest military shipbuilder and the sole builder of nuclear-powered aircraft carriers. It also builds nuclear submarines (Columbia-class, Virginia-class), destroyers, and amphibious assault ships, the backbone of U.S. naval power.

Why the Next Great Power Conflict Is Naval

The Taiwan Strait is the most dangerous flashpoint on earth. China claims Taiwan as sovereign territory and has stated it will use force if necessary. Taiwan sits 100 miles off China’s coast, separated entirely by open ocean. There is no land bridge, no border to cross. Any Chinese attempt to take Taiwan requires an amphibious invasion or naval blockade across one of the world’s busiest shipping lanes. Defending Taiwan means controlling the Western Pacific: carrier strike groups projecting air power, submarines denying Chinese naval movement, and surface combatants protecting supply lines. This is a war fought and won at sea.

Why HII

The U.S. Navy is already undersized relative to China’s fleet, which is now the world’s largest by hull count. Closing that gap requires exactly what HII builds: carriers, submarines, and surface combatants, all of which take 5 to 10 years from contract to delivery. Nuclear carriers take roughly 7 years to build. Columbia-class submarines take 5 to 7 years. Defense spending decisions made today lock in revenue streams deep into the next decade. HII’s near-monopoly on nuclear-powered platforms makes it irreplaceable in any sustained naval rearmament cycle. As Taiwan tensions escalate, the pressure to expand and modernize the fleet only compounds, and every dollar flows through HII’s shipyards.

Conclusion

Long-term thesis: HII builds America’s key warships, nuclear carriers (only one who can), Columbia & Virginia subs, destroyers.

Core driver: Taiwan/China tensions aren’t going away. China’s navy grows huge and fast. Any war = fought at sea.

U.S. stays committed to naval dominance → decades of big contracts for HII.

Boosted by Trump’s Executive Order 14269 (April 2025) on “Restoring America’s Maritime Dominance” + follow-on Maritime Action Plan (Feb 2026) to counter China and rebuild shipbuilding.

Result: HII gets massive backlog (~$53–57B), steady revenue, improving margins, and reliable cash flow for years.