When a company’s stock price depends on how many people it can keep locked up.
Wall Street’s valuation of private prison companies has always tracked occupancy rates. In 2025, that relationship stopped being theoretical: record profits, driven almost entirely by immigration detention contracts.
Correctional facilities run for a profit margin
Private prisons emerged in the U.S. in the late 20th century, pitched as a way to relieve overcrowding and cut government corrections spending through private-sector efficiency and competition.
The core critique has never really changed: when a facility’s revenue depends on how many people it holds and for how long, its financial incentives point toward more incarceration, not less — and toward cutting costs on healthcare, food, and rehabilitation programs to protect margins. Private facilities also operate with less public oversight than government-run prisons, making conditions and abuses harder to independently verify.
The research on cost savings is genuinely mixed: some studies find modest efficiencies, others find no savings or even higher costs once you account for how private facilities can select healthier, lower-cost populations. There’s limited evidence that private prisons do any better than public ones at reducing recidivism or improving safety.
Every administration has undone the last one’s move
DOJ announces a phase-out
The Department of Justice said it would stop using private prisons at the federal level, citing safety and cost-effectiveness concerns raised in its own Inspector General’s findings.
The phase-out is reversed
The incoming administration rescinded the 2016 memo, restoring the Bureau of Prisons’ ability to contract with private operators.
Biden’s EO 14006
President Biden signed an executive order directing the DOJ not to renew contracts with privately operated criminal detention facilities, citing findings that private prisons are less safe and more likely to rely on practices like solitary confinement. At the time, about 14,000 federal prisoners — roughly 8% of the Bureau of Prisons population — were held in private facilities.
Rescinded on day one
On January 20, 2025, President Trump rescinded EO 14006 via EO 14148, reopening the door to new federal private-prison contracts. Neither Biden’s order nor Trump’s reversal ever applied to ICE contracts, which continued throughout.
Four flips in under a decade. Whatever the policy merits on either side, that instability is itself part of the story: it’s exactly the kind of political volatility the industry’s own investors have learned to price in and plan around.
What “occupancy rates drive valuation” looks like in practice
Both of the country’s two dominant private prison operators just posted their most profitable year in company history — almost entirely on the strength of immigration detention contracts.
GEO Group
CoreCivic
By mid-2026, the two companies were reporting a combined $1.4 billion in quarterly revenue, with both explicitly building toward the administration’s stated goal of 100,000 people in immigration detention at once — up from roughly 70,000 at the time. On recent earnings calls, some investors have expressed frustration that detention numbers weren’t rising fast enough to satisfy growth targets.
Attorney General Pam Bondi previously lobbied on GEO Group’s behalf before taking office.
David Venturella, a former GEO Group executive, is the current acting director of ICE. He has stated he divested his GEO Group stock after taking the role.
Private facilities are a minority of the system — and the fastest-growing part
Contrary to a common assumption, most of the roughly 2 million people incarcerated in the U.S. are not in privately-run facilities. But the private share is where nearly all of the recent growth is happening.
Per the Prison Policy Initiative’s most recent national data, expanded immigration detention accounts for virtually all of the growth in U.S. mass incarceration since their prior report — and across all federal agencies, the number of people held for immigration-related reasons grew by nearly a third in the first year of the current administration.
