General Dynamics Corporation

General Dynamics Corporation is an American aerospace and defense conglomerate that designs, manufactures, and services business jets, nuclear-powered submarines, surface combatants, land combat vehicles, weapon systems and munitions, and defense information-technology solutions, generating $52.55 billion in revenue in fiscal 2025. The company operates through four segments — Aerospace (Gulfstream and Jet Aviation), Marine Systems (Electric Boat, Bath Iron Works, NASSCO), Combat Systems (Land Systems, European Land Systems, Ordnance and Tactical Systems), and Technologies (GDIT and Mission Systems) — and ended 2025 with a record $118 billion total backlog that had grown to $131 billion by the end of the first quarter of 2026.

This is a story about a management team that invested against the cycle for two decades and is now harvesting. While peers debated capital return, General Dynamics poured roughly $10 billion into an all-new Gulfstream family and expanded its submarine shipyards to meet Navy demand that was visible on no spreadsheet. The reward is a business where every segment is growing, backlog is at an all-time high, and free cash flow — $3.96 billion in 2025, a 94% conversion rate — is accelerating toward a 100%-plus target in 2026. The file turns on a single question: whether the market, which prices GD at roughly 20.5–21.0 times forward earnings, adequately discounts the durability of this backlog and the margin runway still ahead, or whether it is correctly pricing a conglomerate reaching the limits of its growth cycle.