Morgan Stanley’s Best Stock Picks: 15 Stocks To Own For 2025

9. General Dynamics Corporation (NYSE:GD)

Number of Hedge Fund Holders In Q2 2024: 48

Share Price Target Upside: 13%

Share Price Target: $345

General Dynamics Corporation (NYSE:GD) is one of the biggest defense contractors in the world. It operates across most military domains, namely land, water, air, and cyber. This provides General Dynamics Corporation (NYSE:GD) with a wide moat, as its military systems such as the M1 Abrams tank and Virginia class nuclear submarines are long standing products of US national defense. Defense contracts remain stable even during turbulent economic times, and General Dynamics Corporation (NYSE:GD) might also see additional catalysts in the future if the conflict in Ukraine does not die down or if tensions between the US and China flare up. The firm also has a strong presence in the civilian aviation industry through its Gulfstream subsidiary, which commands a 13.6% market share of the business jet market. Additionally, General Dynamics Corporation (NYSE:GD) is one of the few defense contractors with a strong position in the cybersecurity market. It sells cybersecurity hardware and software capabilities, for a high margin business that complements existing hardware sales.

General Dynamics Corporation (NYSE:GD) did face some troubles with its business jets recently. Here’s what management shared during the Q2 2024 earnings call:

“So very late in the certification process, we had a requirement to bind together some wires in the tail of the airplane. So relatively simple fix. For those airplanes that we had already built, we took the tails off. For those that we were building, we just didn’t put them on. So this is largely behind us. And contributed to a bit to the cost impact on lot one. But I would note that it’s extremely hard to discern anything meaningful looking from the outside in here. This is, as I said, largely behind us and was pretty late in the process. And not particularly difficult to do.”