Boeing's Resilience and Growth Potential Outweigh Near-Term Headwinds

The Air India Flight 171 crash involving a Boeing 787-8 Dreamliner has cast a temporary shadow over the aerospace giant, but investors would be wise to look beyond this single incident. Jim Cramer's bullish stance on Boeing—rooted in its strategic advantages and cash flow turnaround—aligns with a growing consensus that the stock is primed for a long-term rebound. Amid geopolitical tensions, regulatory probes, and AI-driven infrastructure expansion, Boeing's fundamentals and catalysts for growth suggest this is a compelling buy at current levels.

The Air India Crash: A Transient Risk?

The June 2025 crash of Air India Flight 171, which marks the first fatal accident involving the 787 Dreamliner, has drawn scrutiny. However, the investigation by India's AAIB and the NTSB is still ongoing, with critical data from the flight recorders pending analysis. While geopolitical tensions in the Middle East and heightened safety protocols have temporarily disrupted Air India's operations—canceling 18% of flights—the broader impact on Boeing's commercial division remains limited.

Key points to note:
- Engine reliability: Both engines on the crashed aircraft had “clean” maintenance histories, with the right engine newly installed in March 2025. Life-limited parts (LLPs) in the Genx-1B engines are closely tracked, reducing long-term risks.
- Safety measures: Air India has cleared 26 of its 33 Boeing 787s for service after enhanced inspections, and the fleet's grounding is temporary.
- Investigation timeline: A preliminary report is expected within three months, and while misinformation has circulated, Boeing's cooperation with regulators underscores its commitment to transparency.

This incident, while tragic, is unlikely to derail Boeing's long-term prospects. The Dreamliner's safety record—zero fatal crashes before June 2025—remains strong, and the AAIB's focus on technical data rather than systemic flaws suggests Boeing's design and maintenance practices hold up.

Boeing's Fundamental Strengths and Cash Flow Turnaround

Boeing's recent financial performance signals progress toward its goal of positive free cash flow (FCF) by year-end . In Q1 2025, FCF narrowed to a $2.29 billion outflow, a 42% improvement over the prior year, driven by higher commercial deliveries (130 aircraft, up 57% YoY) and cost discipline.

Rothschild & Co. Redburn's upgraded “Buy” rating and $275 price target reflect confidence in Boeing's trajectory. Their analysis highlights:
- Production ramp-up: Boeing aims to increase 737 MAX production to 38/month by late 2025, with plans to reach 42/month. The 787 line is also scaling to 7/month.
- Long-term cash flow: FCF could surpass $14 billion by the end of the decade—exceeding its 2018 peak of $13.6 billion. Analysts project $1.7 billion in incremental after-tax cash profit from higher 737/787 deliveries.

Cramer's cautious optimism centers on CEO Kelly Ortberg's progress in stabilizing operations. Despite near-term headwinds like tariffs on Chinese deliveries and FAA certification delays, Boeing's focus on scaling production and reducing costs positions it to capitalize on strong commercial demand.

AI-Driven Aerospace Demand: Boeing's Strategic Advantage

The aerospace industry is undergoing a digital transformation, and Boeing is well-positioned to benefit. AI-driven infrastructure—spanning predictive maintenance, advanced air mobility (AAM), and defense tech—is creating tailwinds for Boeing's core businesses.

1. AI in Aftermarket Services (MRO):

2. AI tools are revolutionizing maintenance, enabling predictive analytics to reduce downtime. Deloitte notes 81% of aerospace firms are adopting AI/ML, with MRO a key focus. Boeing's partnership with the FAA on AI-driven safety analytics exemplifies its leadership here.

3. Defense and Unmanned Systems:

4. U.S. defense spending on hypersonic research ($163.4 million in FY2025) aligns with Boeing's expertise in solid rocket motors and missile systems (e.g., Minuteman ICBMs). The global unmanned aerial systems (UAS) market is projected to reach $20.2 billion, with Boeing's ScanEagle drones in high demand.

5. Advanced Air Mobility (AAM):

6. While Boeing has yet to launch an eVTOL product, its legacy in aviation safety and engineering could allow it to enter this $8.2 billion (by 2033) sector later.

Investment Considerations and Risks

Near-Term Challenges:
- Regulatory hurdles: The Air India probe and 787 seat certification delays could prolong operational headwinds.
- Supply chain risks: Tariffs and geopolitical disruptions (e.g., Panama Canal bottlenecks) may constrain delivery timelines.

Long-Term Catalysts:
- Commercial demand: Airlines are replacing aging fleets, with Boeing's narrow- and wide-body aircraft remaining in high demand.
- AI integration: Boeing's ability to apply AI across supply chains, training, and customer service could boost margins.

Conclusion: A Compelling Buy Despite Volatility

Boeing's valuation is currently depressed, but its path to positive FCF, coupled with multi-decade demand for its aircraft and defense systems, makes it a compelling long-term investment. While the Air India crash and geopolitical factors pose near-term risks, they are outweighed by Boeing's strategic advantages and the AI-driven tailwinds reshaping aerospace.

Investors should consider adding Boeing to their portfolios, especially if shares dip further on short-term news. Cramer's “multi-year runway” thesis holds water: Boeing's recovery is not a sprint but a marathon, and those who stay the course may reap significant rewards.